HomeMy WebLinkAbout10-03-1989
i
e a
AGENDA
CITY OF DENTON CITY COUNCIL
October 3, 1989
Word Session of the City of Denton City Council on Tuesday.
Oct,)Ler 3, 1989, at 5:30 p.m. in the Civil Defense Room of City
Hall, 215 E. McKinney, Denton, Texas at which the following
items will be considered:
Note: Any item listed on the Agenda for the Work Session may
also be considered a, part of the Agenda for the
Regular Meeting.
5:30 p.m.
1. Receive a report on Coopers 6 Lybrard's Management
Study and Actuarial Audit of the Clty's Employee
Health Insurance Program anal thy: preliminary
recommendations on the Employee Ilealth Insurance
Program.
i
2. Hold a discussion of proposed wastewater treatment
rates.
3, hold a discussion concerning the telephone study
interim report.
4. Hold a discussion on suggr,sted schedule for budget
review for summer 1990.
5. Hold a discussion of the Done Star Gas Contracts.
4 6. Executive Session:
A. Legal Matters Under Sec. 2(e), Art. 6252-17
V.A.T.S.
1. Consider action in Dentun County__ vs} City
and In Re: Flow
2. Consider action in H.D. Martin vs. City.
6, Real Estate Under Sec. 2(f), Art. 6252-17
V.A.T.S.
C. Personnel/Board f,ppointments Under Sec. 2(q),
Art 6252-17 V.A.T.S.
i
1, Consider .+ypotnt,uent of a nominee to the
Denton Central Appraisal District.
i
~k«>4s
City of Dentor. City Council Agenda
October 3, 1989
Page 2
Regular Meeting of the City of Denton City Council on Tuesday,
October 3, 198;, at 7:00 p.m. In the Council Chambers of City
Ha 11, 215 E. McKinney, Denton, Texas at which the following
items will be considered:
7:00 p.m.
r 1. View the Denton economic development filr, produced by
/ GTR.
2. Public Hearings
A. Hold a public hearing and consider approval of an
ordinance providing for a change in zoning 1i
classification ;rom single-family 7 to planned
development and approval of a detailed plan for
1.054 acres located at the northwest corner of
Welch and Fannin Streets. (Planning & Zoning
Commission recommends approval.)
B. Hold a public hearing on the petition of
Metroplex Engineering requesting a variance of
Article 111, 4.04, 0, sidewalks to the Denton
Subdivision and Land Development Regulations for
the Endres Addition. (Planning & Zoning
Commission recommends a partial variance.)
3. Consider recommending approval of the preliminary
replat of Endres Addition, Lots 2, Block 1 into Lot
1R, Block 1. (Planning & Zoning recommends approval.)
4. Receive a citizen report from Jos Dodd concerning
Cable Subscriber Bill of Rights.
5. Consent Agenda:
Each of these items is recommended by the Staff and
approval thereof will be strictly on the bdsis of the Staff
recommendations. Approval of the Consent Agenda authorizes the
city manager or his designee to implement each item in
accordance with the Staff recommendations.
Listed below are bids and purchase orders to be
approved for payment under the ordinance section of the
agenda. Detailed back-up information is attached to the
ordinances (Agenda items 6.A). This listing is provided on the
Consent Agenda to allow council Members to discuss any item
prior to approval of the ordinance.
I
i
I
I
4
E
i
t
City of Lenton City Council Agenda
October 3, 1989
page 3
A. Bids and Purchase Orders:
1. Bid 141001 - Malone Street Drainage
2. Bid 141011 - Dania Park
B. Plats and Replats
1. Consider approval of the preliminary replat
of the Wattam Addition, Lots 7 and 8, Block
2 into Lot 7R. Block 2. (Planning & 7oning
recommends approval.)
6. Ordinances
A. Consider
competitive dbids o ando providing ordinance nthe award accepting
contracts for public korks or improvements.
UB
B SConsider chedule adoption
Ratesf for oSewerncservice.ing (Pthe
k recommends approval.)
v C. Consider adoption of an ordinance awarding a
contract for the purchase of spot gas from
i Enaerch 7as Company. (PUB recommends approval.)
i
D. Consider adoption of an ordinance awarding a
contract for the purchase of gas from Lone Star
Gas Company. (PUB recommends approval.)
L. Consider adoption of an ordinance awarding a
f contract for the transportation C of Basapproval. Lone
Star Gas Company.
N execute Consider a adoption
Lone h start st Company r and
contract of
or
the the transfer o of Bryan, gas. (PUB recommends approval.)
th
0. Consider adoption of an ordinance authorizing
publication of Notice of Intention to issue
Certificates of Obligation of the City of Denton,
Texas.
it. Consider adoption of an ordinance of the City of
Denton, Texas, approving
laims a for compromise
and release of all pending litigation
between the City of Denton and Matthew 5truble
and Rosemary 5truble.
I
j
I
i
I
f
City of Denton City Council Agenda
October 3, 1999
Page 4
1, Consider adoption of an ordinance establishing
classified
the City ofp Uonton8 ryexashand iprovidingt fort the
number of persons authorized for each classified
position.
J. consider doption classifieds positionsf ins the Police Departmenthlof
the City of Denton, Texas and providing for the
number of persons authorized for each classified
position.
J
7, Resolutions
certain Airport authorizing
A Consider
Manager to execute resolution
for pad sites and T-hangars at the Denton
Municipal Airport under certain circumstances.
B. Consider approval of a resolution in support of
Proposition No. 8 for funding construction of new
correcticnaa facilities.
C. Consider approval of a resolution nominating a
member to the Hoard of Directorb of the Dentor.
{ Central Appraisal District.
4
g Miscellaneous matters from the City manager.
9, Official Action on Executive Session Items:
A. Legal Matters
B. Real Estate
C. Personnelnts
D. Board Appointments
10. New Business:
This item provides a section for council Members to
suggest items for future agendas.
tt. Executive Session:
Act, 6252-17
A. Legal Matters Under Sec. 2(e),
V.A.T.S.
h, Real Estate Under Sec. 2(f Art. 6252-17
V.A.T.S.
C. Personnel/Board Appointments - Under Sec. 2(g),
Art 6252-17 V.A.T.S.
a
t
i
F ~
I
~Ytl'aYJ n, ,y
City of Denton City Counci) Agenda
October 3, 1989
Pago 5
C E N T I F I C A T E
I cettify that the above notice of meeting was posted on the
bulletin board at the City Hall of the City of Denton, Texas,
on the day of 198 at o'clock
r (a.m.) (p.m.?
CITY SFCRETARY y V
i
4717M
i
j
I
i,
1
1
I i
N 4
F
rj
`~I ~wrva F; ~~vF
I
~1L aMav
i
30 p.m.
CITY OI DENTOM / 215 F. McKinney / Dentc n, Texas 76201
r
MEMuI1AN R A
To: Putty McKean - l'.xecuLlye Diractur - MAD
1
From: Tom Is linck - UIrecto r of Personn=el/Employee Relations
Date: September 21, 1989
~I Subject: Preliminary Recummrndations on the Pity's Fmpluyea health
Insurance Program
petty, this memo is to outline the results of the Employee Insurnnce
Committee's recommencinlion to the Executive Committee an the City's Employee
Health Insurance Program.
It is the staff's r"cvmmendation that the City Cuuncii nulhorize the staff
to finalize con! racts with Sauna/New York Life to pravido for the City's
Employee Health Insurance Prugrnm to offer two options:
I
o EIMU Unly
i
o Sanuy PIn9
{
With the 1989/90 linket, the Council appruied fnnds to conduct .a study of
the insurance fund in order to provide alternatives and recommendations to
provide a health insurance program for city cmployecs. In Jununry, 1189,
the Council awarded a rout rnet to Coopers As Lybrand and the study commenced.
In May, 1989, Couper.s 6 Lybrand piojvutrd that by Sept. 30, 1989, the
insurance fund would experience a SLA million deticit. Thy City Council
approved a Strategy to instiI M a "Iimiterl" hiring freeze and other
budgetary measures to "eraae" the deficit in Iho current budget year,
research alternatives fur a now, re-structured insurance program, end
Involve employees in solving this problem.
During June, July and .August, the fclluwiug actions occurred:
o conducted 25 two hour meetings with over 700 ompluyece communicating to
over 92% of the empluyee workforc-.
I{ i
o gained employers feedback on their nweds for insurance through a surrey
questionnaire and W aired a 71% response rate
0 dev.lohed mad Seat ou' 17 requvsts fur hide on the Insurance program from
private carries 131,e IML, Blue Cross/Bluo .shield, etc. and tacelred I
viable rr llousev.
i
11
t
I
I
i
',~1i1 rmbrr 21 , 198'!
M,mr> 1„ E+. hicRr•an ,au Emplulor Insruanco Program.
ihtSr 2
u cundneted )7WALnriry mcrtings with 1oCa. 6-10n1s anti Wtor4 in
ruNjrmction with Ali UNI, and IalSll rrprescntatives (:he 1,CHo Grcup)
Out of this prorevs, two major snlutluns for a health insuranre program wire
clevulhpod for conshd,rntiun We ttnchment In and lb for compnrisc,n):
o ::a-Slructured City Walth Insurance Plan that u"uld include the full"wing
options:
3. tAustrophlr Only flap {In-hospltnl enverage only; no doctor
coverage)
2. Exclnsivr Prodder Plan (Designated only Hoctors and
Wpitals)
E 3. comprahrnsive pion (All, complete coveroqu)
n Sanus/Kew Turk Life Plan that would include the following options:
1. HMO Only (Designated doctors and hospitals; same voverage
limitations)
j 2. CumprehenmW e Plan (rhoi(e of full, complete coterage OR HMO
€ option)
i
In an initial k plu)ec Insurance CummiLtec mooLinq considering Lhnrsc
alternatives, the opinion tly thv members was "split" - roughly half the
members favored the City Plan, the ether half the Sanus/Kew York LiN
program, Howev"r, utter informally discussing the options further with
j employees, the weight shifLed toward the Srrnuw/.h'ow Sark Life I'rupusal,
primarily Wansp of cost. Harr I'alatierv wr,s ashen to nmsirt us in
I negotiating with the local doctors and hospitals. Ce was also asked to
check the actuarial accuracy of the Sanus rates quoted and other contract
provisions such as service area restrictions contract
quirnntros, Ac.
Sanus/.Kew York Life was also instructrrl to determine if it could produce it
more favorable list of local' physician prodders.
Sinee January, the members of the fmployre Inscrranee Committee have mat. 18
different times representing aver 8O hours of time. In addition, individual
members have spent many hours meeting with their respective employees
discussing details of the insurance niternatives under consideration,
clarifying qur-stions, and determining how employees felt about each major
proposal. There has been a signifrAnt cummitrenl or time and W rorl to
unsure we were properly responding to empluyecs' needs and concerns in
reaching a final uot.mmeudatlcnr,
In September, we finalized nvgutiations with the local doctors and
hospitals for possibly re-structuring or the rily Plan. bncurrvntly, we
nlso finalized research in'o nil issues concerning the Sanus/Sew Yuri. Life
pripusnl, The Kmployeu lusurancc tommittre met on Supt. mher lit, IDN9. ,al
V%Wnted bglh programs „n the fallowing criteria:
I
I
i
9
Scptembc°r 21, 198Et
Memo to I1. Mcheatt ort Fmpl,.! lusurance E'rugran:
Page
o Quality
o Affordability
o rtcceasibil ity
o Stability
o City's Finauclal Liahility
FACh of the above criteria vas first wPighlcd by the committee a!K to its
iml,ortance, Then, each major alternative, the He-struclured City Flan and
Sinus/Acv York Life, was rated oil it scale of I to 10, The final res,ilts of
this scoring gave the Santis/.Yew York Life alteruativc More than double the
total points as the Re-structured City Plan Idetails of the complete ls,oring
,tnd rational n.e included in the Coopers d L.ibrand final report (It pnges
21.231, In addition, an informal pollinq of employees by tilt, Committee
m(mhe.s showed that the majority of employees m "call are is favor jf the
Santis/New York Life proposal. The overriding consensus of the Employee
Insurance Committee and Dave Palaliere (Coopers k L)hraad) was that the
Santis/Sew York Life Progrnm was the best alternative for all city empJoJec
and the program they wanted to recummend to the Executive Committee. 6u
Wednesday, September 20, the Fxecutive Committee met with Dave and discussed
the recommendation and r+ttionaie behind the Employee lnsnranco Comm)ttee's
docIsion,
Iit the final analysis, the key fnctora in staff's Iecommon,latloil to (:sty
Council that. the SanUA/New York Life 11rogram I; the appropriate decision
are:
u the Fmployee Insurance Committee, it majority of ('it), employees, and
Coopers A Lybrand are endorsing the Snn+,s/New York Life proposal (even
J though we know there are some disndvantages)
the Clty's financial linbility will b,- I:oteatcA and the City tI, art 9fet4
It's potential ''risk" to another party
Thus, it is the staff's recommendation that the City:
o contract with Santis/S'ew 'fork Life to provide a,nalth insurance coverage
for city employees and their dependents,
o proceed with employee menlings to c,\plain the options available to them,
o conduct open enrollil l during th-- month of November,
o implemenL the new health Insurance pregr,km with au effective date of
December 1, 1989
~ f
I
I '
i
I~
l
LM
Ulm]
September 2l, 1489
Memo to IL McKean on EmploYe~~ Itrinrauce Program
page A
With the City Council's sppro,al ue. are preparc~l to procre~l with the
attached schedule. and implement the new £mploy'Fe Health Insurance Program.
rP~estion4 or need additional clariticatic~n.
, se let mgr know' if you We
PI
Shank you.
Thomas w'. K ck
bmtnslR-prn 9/21189 12:00 noon
i
I
I
i
i
i
i
it
it ,
f~
ATTArHMEST 1a
EMPLOYEE hFALTH INSURANCE, JSOCRAM
ALTERNATIVNS
COMPARISON OF ADVANTAGES/DISADVANTAGES
(X)OPERS iE LYBRAND SELF-INSDRANCE PLAN RE-STRUCTURE:
Y9.
ii
SANUS/NF;W YORK LIEF: I11140/}LILLY-I3SUHEU PLAN ~
CITY PLAN RE-STRUCTURE SANUS/NEW YORK LIFE
PLAN DESIGN
i Three Employee Options: -----1'xo Employee C)ptions:
i
1. CaLaslrophic Only I. HMO Only
-80X/20%; $250 Indv Deduct/$2000 -$15 co-pay Doctors;
Out-of-pocket Maximum $100 co-ply Hospital
-Covers Hospittlizatiou, -Cotters most medical care;
Emergencies and W-patient NO Prescription Drugs, Vision
Surgery ONLY or Counseling
-NO DOCTOR COVERAGE; IL'sc only drsignitcd ho(Lnrs
and Hospitals)
IT. Exclusive Provider Organization
-$I5 Co-pay Doctors; $100/dap HosPitaL
$100 Surgical procedure
-All other medical services - 80%/20% ll. SANDS PLUS
$250 Indv Deduct/$5000 On-of-pocket
Maximum -Indemnity Plan - 0X;
5100 Indv Dciucl./5/$;500i000
-Current We9crLption Drug and Vision out-of-pocket maximum
Benefits (Use ANY Doctor or Hospital)
-W-ST USE PROVIDER NETWORK Prescription Drugs-$10 Deduct
Lit. Comprehensive Plan ANT)/OR
j -AO%/20%; $250 ludo DeducW 200) -HMO Plan
j Out-of-pocket Maximum Si l':+-pay Doctors;
I $275 co-ray Hospitals
I -Current PrescripLluu Drug and Vision (use only designated Doctors
and Hospital l
I
i
i
CITY PLAN kE-STRUCTURE: SANUS/NER YORK LIFE
1'h(IY I L's'RS
I)(X1,049/II0SPITALS
Denton Ares Do<tors and Limited Drnt"n/L wi...'lie
Hnsp!tals - Lids m urnble and D"Ptors - currvntls 10
within Coopers actuaricl rate
projections Denton Murmurlty &,spitIl
Dallas/Fl Worth Doctore beilam/Fr, Uarth Drc wo
-Non-network
-Extvtu;isV Nctwurk
I
Dallas/Ft. %orth Ilospilnis Dallas/Fr, Perth Dospitalu
Ali ICA Facilities
CITY (X)N'rk0l.
Full Control within Finnacial - CoNtia,KU provisions
Limits; flexibility
I
PER CENT (N)ST/RATE: CHANGE FROM UURkENT kAUS -
We Attachments 2 and 3)
i ~ I. Catastrophic Unl--•-- T-.- if 520 -
y' 1. HMO only* I
Employee only 0% All Qd
Employee only UX 6%
Employee & Spouse +26% Employer & Spouse +I1% -11%
Employee & Lhtldren +30% Employee & Child= -11% -17%
{ Employee & F4m,ly +2rt Employee & Family + 11 - i%
II. Fu:Iuyive Provider Organization
Employee Only 4 11. S%S1S Ftl'S« If $21)
Employee & spouse +63% hi 4!1-ic•d
Employee & Children +80% Indemnity Flan and/or NK
Employee, & Family +61%
F,mployre Only S 18 - 8%
III. Comprehensive Plan Employee & Spouse 485% 463%
Emplu,Yee & t'hiLdren 4524 +18r
E%pluyee Only 73 E'mployee & Family +16% +72%
Employee & Spouse +212%
Employee & Children +272% *E20 Its, .4APPI, to "KNEW prom
Employee Family +178% increase or "pocketed'
Other Costs: Other Costs:
City "At-Risk'"; protected ity "uut" of rink Wrce,ss
Individual/Aggregate Stop-loss
Insurance; potential plan deficit Scuond ychr's rate increase
"r.app-d" At miximum of 22%
No Ineulatlon future rate 1hcrr•asrH;
my race Same financial dilcmmn uoxt
year
I I
I
_ _
14"*~ [46~
BANKS/NEW YORK LIFE
C11'Y PLAN RE-STRUCTURE
_ OTRER (X)NSIDF'RATiONS -
Doctors and Hospitals bids favorable provides "sumo" doctor coverage
to actuarial projections by for City's proposed
Coopers k Lybran Catastrophic. Plan
Catastrophic Plan Wks Doctor
Ready to proceed; cute iuitial,
coverage
open ,nrollmcnt much sooner
HMO - negative image
Rates do not build surplus Above Limited Doctors in local area
claim reserve
i
Fav~orablc rates that would
hot affordable to rank and file., lower allow more employees a rate
paid employees reduction and therefore it
~r higher net pay increase
Affordability; rate reduction
FPO cheaper than SASt15 PLUS, except for basic employee and
in Employee 6 Children Category dependent health care needs
Preventatixe Health Are
Catastrophic Only - increased rates, provided
reduced benefits J
SAStS experienr_e and
1 I Provides three options references - cutstandinq
~r %nA Huspitalale emposnmlofoyleeocs al are familiar farmlaiaar r wills Fmployecm Must learn and
{l '
practice "managed care" or
City employees continue to "fight" pay A001ti90gl lremium
the need for education and importance Uegree of Lrcunvenience to
of "managed care"; re: conclude that ensure cost effectiveness
we will be in sam: "crisis" next year
Control mechanisms and
procedures established and
enfurced
I` I
k ,
I
i
1nyeltA prn 811U M 1:1011
I
I
r mr:r+ra mentor. t+:r-Mrt,
a a e a a s a" a a a a a
N .^^xro 7 fir. >c K ~ m
v, r 5 O I
C r0.V •-CLN r .~.~j 0 1
-I ft
\ L•1 4-. 1[~ [ ~ L'. .1 • G •'1 LI .l C i, 17 •~1t}.•/
00 11 • • 1W 1 M1 C
Y O C' 1 V Y ,rl '1
tL M
n ,n L
11 CO
'J~ C9 ul r• ¢ L i. it rw f CI C• r..1 CJ ID
r
I/ OOOO1(A hOUQ ~'I 000 (r N
I ^ 0 0 0 GOO U o C'7 O O ~
j + !.-.ly b N
Y
L. + + + N r. + ! + rn ❑ A d i 1 -f
N N n •1 Ot S O• n ^1 K 1= C.` N n 1 y
N N J n I • U t0 i. n r' -1 rJ Ci n
wrJ r~C-1 t7A N N N C It at le rD
N At at Y ;.1 rr Its rr
r r7 H E 0 9 j 71 C 'aU ~7,' '75+~~~ r
ILI
n
1 7 crra`o L~ rr a xo
r,ln«-
pry t^ b y c~1
H y r r
Iy, , \ N i
9 r to
C v
T m
H ! n ;
I C-1
v rn N In H O pC •C x S
r > m
7 :y Vi •D TC < '7 •~::tJ AG r~
ft 1.1
0 13 O N ~-0 N 7 N y
'r m
r4 1,
H O-d to CCIr A I C.~Cn A
r7 CC N VI C1. rJ -1 •1-
0 I.. I.: I '7 4
n.Z= + 1 + r ^1
+ + + tx n _ • r
dt t,: CO
ul AY C /e at at 11
r+
of ?4 10 1
y
C n
r, O ~ cl fl O
L, 0 (A CD V7
G 1o4 U,++ t OA O2. ~a, r
g P7 i-• t t1S1 n .OL
r r
N CO W CZW >t ?1 i~11: Ji A
at It It 1! T ILO A O ;
f
1
I
1
i
✓f.Fi t ie. ,.n
S(,HELH1i.ls
F]AI'1.0YEF. HEALTH INSURANCE PROGRAM
SANDSjN_yW k'ORK 1.IF'F PROPOSAL
SMFLI':MENfATION
SEPTEMB}-R TARGkf DATE
I. Complete bid spec1ficatio3s, 1. Receive H ds - Solt. 11, 1539
publish, receive bids and nrral.ze
i
2. Analyze sufficiency of
local medical providers; 2. Anal s: week of Sept. 25 -29
i
-Doctors
HUFpitals
j I
3. Analyze sufficiency of
Dallas and Ft. Worth medical
providers
Finalize Plan Design details 3. ComO ete Plan COcument.s -
(cutereges, deductillcF, cr.'Iays, week of Oct. 2 - 6
documents
5. I)(,velop and finrilize contracts 1. Prepare back-up nod (l[rcuss
with Sam e/tiew York Iii'e r.ith Exeuitixe Curmittee
Oct. 3, 1989
OCTOBER TARUT i)A'fE -
6. Work Study SesRiOn with City I, Present Preliminary
Council on Preliminary Recommendation to City
Recommendation Ccmncil - Oct. 3, 1989
1 7. Ohtaln Legal Rccie'W
8. Recemmeu+lation to City Council 1. Present Recomoeadation to lily
Cuuncil - Oct. 17, 1d80
9. Arrange exten%ion cc»tracts with 1. Extenr.ion COiltr'aCt9 for each
- August International insurance service - 30 da?s:
(TPA, lR, viv Access; Ur t. 18 - 27
- IPA
Stop- loss Insnranre
I ~
~'Jl p
YifYS'~
IJ+ Ci SY.:4r., S'~
I
d% I
I
10. Arrange contracts with August 2. 'Ruu-off" Claims Preces~,in;
International for "run-off'" for claims incuri,d by riot
claims pr+id Sept.,
oct. 18 - 2-r
11. C'ummunicute ca rice IIAt ion of 3 tct,ililt ion of Cnnlracts -
Controets with
- August 111ternatior„tI l1ct. 18 - 27
- 1 PA
- Stup_loss Carrier - -
12. Ueeelop employee coarmuric•ttion 1. Finalize Emplryev Olmn
mati~riala Fnrollment Meetings and
%lateriats - Oct. 16 - 20
-Memo to F'mplogees
-Materials (Vide it^.~riouts,
Sign-up forms, etc.l
-Schedule of Feelings and
LocAlion
II III
NOV1248ER TAHCE"f DATE W ~
I
13, Conduct open enrollment with 1. Fmployea Open FnrollmenL
employees and assist Meetings
with selected optlons.
890 employees
30 employees per mooting
approx. 30 mceLings
1 1/2 lours each
ti {v. 1, 2, 3
- 50i,. 13 - 11
- sov. 20 - 22
14. Complete administrative details 2. input and finalize chnnge~s to
(deduction changes and input, computer - rfiv. 2i - Dec. 1
produce new employee/dependent,
identification cards, etc.1
DECEMBER TARGET DATE -
Complete Implumt-lntAtion 1. New Insurance deduclious on
payroll checl.s - ireu_15, 1989
i
i
i
inssrh2.prn 9/i/89 'i;15p
I
I
I I
1
i
i
TENTATIVE SCHEDULF:
E:MPi,oYE:E; 11EALT11 INSURANCE PROGRAM
CITY PLAN 407:gT11UCTURE
] MPLE;MFNTA'f ION
-
SEPTEMBER TARGET DATE
1. Finalize negotiations with the - 1. Receive Bids - Hospitals
loca] medical prodders: Sept. 6, 1959
i '
-Doctors 2. Receive Hids - Doctors
-Hospitals Sept. 20, 1959
2. Finalize negotiations with J. Analysis: Week of Sept., 25 -29
I Dallas and Ft. Worth medical
providers
j
3. Fin:cliz.~ Plan Uosign details t. Finalize Hospctnl/Doctor
C'untracts - week of Oct. 2 - 6
(coverage,, deductibles, coo-pays,
rates, etc.) and write plan 5. complete Alen Documents -
documents week of Oct, 2 - 6
S, Develop anc finalize contracts 6. Prepare flack-+rp and discuss
with medical providers. with 'executive committee -
Oct. 3, 1989
i
7. Evaluate/continue with August
International
OCTOBER TARGET DATE: ji
6. Work Study Session with City 1. Present Preliminary
Council on preliminary Recommendation to City
Vecommendalfun council - uct. 3, 1989
r~ 7. obtain Legal Review,
8. Recommendation to City t'ouncil ! I. pre,ent Recommendation to City
Council - Oct. 17, 1989
I 9. Ensur.• L']an Design and procedural 1. communicate Plan Design changes
changes are in place with C'lnims to Stop-Loss Carrier
processor, Stop-loss r'arriet,
etc. 2. Comnr.utic;ctr/AccompLitih chnnaes
with Claims Pr9cessor, etc.
I`
6
P
w= n'xw
I
I
1. Finali:te irtipIayee Upon
10, DeveloP Employee_ Communication Enrollment Meetirn,{s and
materials 4,kLerinls - Oct. 16 - 20
-Memo to Ismplo~ees
-MAteria:s (Video, Handouts,
Sign-up forms, et.c.I
-Schedule of Meetings cited
IccnLion
NUVr;MItEl1 'CARCF:T DA'1'F'
11 - Conduct open enrollment with 1. F:mplo~ee Open Enrollment -
employees and assist I Meetings
with selected options,
85+0 employees
30 employees per in eeting
approx. 30 meetings
1 112 hours eacti,
i
- Nov. 1, 3
- Nov. G - 10
- Nov, 13 - 17
- Nov. 20 - 22
j 12 Complete adminlstratlve details 2. Int~uL and finalize changes to
(deduction changes and inpul., comb+uter - Nov. 27 - Dec. 1
produce new employee/lepe!denl
identification cards, etc.!
1.3. Develop and conduct. meetings ;i. Schv(lnle and conduct meetings
with selr-t.teef local hospitals with doctors and hospitals -
j and doctors. i,;ov. 13 - 27
DECEMBER TAIiOET DATE
14. Complete Implementation ~ -1. New lnsitrance deductions on -
pnyrol l cheers 15, 198'3
i
i
I
i
insschl.prn 9/8/89 2301,
i
I
a (W'Rg1'.a.y■■■Y r,x,r. vrp
piSti'M~
THE CITY OF DENTON
i
i
I i
i
ACTUARIAL AND MANAGEMENT ANALISIS
OF BENEFIT PROGRAMS
I
' I
a
1
PRESENTED BY:
COOPERS & LIBRAND
i
OCTOBER, 1989
~ t
i '
I
rw: sa~
Ociober 3,1989
Mr. Thomas Klinck
Directc,r of Personnel
City of Denton
324 East McKinney
Denton, TX 76201
/ RE: ACTUARIAL AND MANAGEMENT AN,UASIS OF BENEFIT PROGRANIS
Dear Mr. Klinck:
+I We Slave completed our evaluation of the City of Denton's (the City) benefit plans. This
report describes our scope, approach, observations and recommendations.
OBJECTIVE
Thcre were two primary objectives of our engagement. The initial objective was to perform an
eva,ur.tion of the employee benefit programs to place at the City of Denton. The second
objixtive was to assess the strategic options before the City relating to the future of its Medical
Plan.
SCOPE AND APPROACH:
We reviewed specific areas of the City's benefit programs as outlined in our proposal dated
December 22, 1988.
Th.- following areas were reviewed:
E o Plan Design
The current City plan and PPO plan were reviewed from a plan design
perspective.
o Clam Administratii a Management
i
An on-site operations review was rformed on the City's claims administrator,
August International Corpotation (AIC).
o Financial Management
The Plan's financial condition was reviewed. We develo; ed a plan projection
model to estimate the financial status of the plan, and which can be used to
model plan design alternatives.
I
I
i
Mr. Thomas Klinck
Director of Personnel
City of Denton
October 3, 1989
Page Two
o Section 125 plan ( lta Phnl
i - I
We reviewed the City's Delta Plan from the perspective of participation levels,
and City and employee savings estimates.
o Section 89 Compliance Review
We reviewed the affected plans in terms of the Qualification Requirements as I
stated by the most recent guidelines.
o Stratel.>icc Plan Aternatim
We assisted the City in reviewing strategic plan alternatives. Proposals for a
fully-insured plan, HMO options and retaining the current self-insured plan were
reviewed. Our analysis consisted of negotiating with Sanus/New York Life in
f pproviding an HMO only and a fully-insured/HMO plan and negotiating with
Jocal area hospitals and physicians to provide services to the City's current self-
insured plan.
h OSSERVAT1oN1
i
Our key observations are summarized below. A more detailed discussion is presented in the
Wy ofthis report. i
o As recognized by the City, the year-to-date (10/88 - 8/89) deficit of the Medical 1
Plan is $486,995). The pro*ted deficit of the Medical Plan as of September
30, 1989 is approximately ($600,000). The cumulative projected deficit of the
l l Insurance Fund as of September 30, 1989 is ($1,400,000). We understand the
City has funded the plan deficit.
o The medical plan alternatives before the City are summarized below.
Alternative 1) Move to an insured program under Sanus/New York Life
Sanus/New York Life proposed an HMO only plan option and a fully
Insured/HMO Plan option (Sanus Plus Plan) to the City. The HMO plan offers
selected physicians and a standard HMO-type plan design. The sec,)nd option,
the Sanus Plus Plan allows employees to utilize either the HMO physicians and
plan benefits, or any physician of their choice with more comprehensive benefits.
Employees would sign up for one of .he two options.
i
Alternative 2) Retain the current self-insured program with a modified plan
design and Implement contractual arrangements with selected
hospitals and physicians.
,i
i
M
Mr. Thomas Klinck
Director of Personnel
City of Denton
October 3, 1939
Page Three
I
The current City plan was completely redesigned and segmented into three
options, °ach offering specific rstes and a plan of benefits. The three options
are:
Catastrophic Plan, which covers employees for inpatiet, 'in-hospital
costs, +
- Ewclusive Provider Plan, which offers significant benefits, however,
employees are required to utilize selected hospitals and physicians;
• Compprehensive Plan, which provides the most comprehensive level of
benefits and which allows employees to use any provider.
t Employees would enroll in one of these options.
o in reviewing these alternatives, and working closely with the City's Employee
Insurance Committee (EIC), five criteria were considered;
• Quality of Providers /Services
• Affordability of Plans
• Accessibility of Providers
Stability of Plans
Citys Financial Liability
From a quality perspective, the EIC perceived little difference between the
options. This perception is based upon the fact that under the Santis Plus Plan
option, employees can utilize HMO doctors or non-HMO doctors. A concern
that we have regarding the HMO physicians, is that members of the Emplo}ee
Insurance Committee had little experience with any of the HMO identified
doctors. Hence, quality of these doctors is an unknown factor. It should also be
stated that, however, these physicians are duly licensed professionals and should
be considered the same level of quality as non-HMO physiclaiLt.
With respect to affordability, the Sanus/HMO option is the preferred alternative
from the employee perspective. Based upon the rates presented by Sanus and
those which were actuarially developed for the City's plans, the savings to the
employee is significant.
We would like to note, however, that the City will continue to have the financial
responsibility of those disabled employees and do ndents who are coot actively
at work on the date on which SanuslNew York Life assumes the plan
(December 1, 1989). 'The actively at work issue is discussed further in this
section.
I
Mr. Thomas Klinck
Director of Personnel
Cityof Denton
October 3,1989
Page Four
From an r.ccessibility perspective, the EIC believed that although the Sanus
HMO option offers a limited number of physicians, it was preferred to the City's
Catastrophic Plan option, which covers services on an in-hospital basis only.
Regarding stability of the Plan in terms of providers/services, the Committee
believed the edternativo of retaining your current plan is more appropriate to the
HMO alternative. Their belief was based upon their knowledge of local, non-
HMO physicians.
With respect to the criteria of he City's financial liability, given that the Sanus
alternative is a fully-insured program, and that a not-to-exceed second-year rate
increase of 22% has been contractually agreed to, the Citys future financial
liability under the Sanus alternative is reduced when compared to is current
self-insured arrangement. It should be noted that the Sanus not-to-exceed rate
increase can be modified depending upon the State legislating additional
benefits.
o The Sanus/New York Life contract covers employees and dependents who are
actively at work. Hence, those employees/dependents who are disabled and are
not actively at work remain the City~s financial responsibility for up to 12 months
after the termination of the City's current medical plan, or longer defending
{ upon the City's LTD policy. Based upon documentation developed by the City,
there are several employees and dependents who will continue to be covered by
the City. The estimated costs for cure of these individuals is still being
G developed by the City's Personnel department.
The Santis contract does, homver, cover the City's c,irrent COBRA
beneficiaries and retirees. That is according to discussions wi;`- Sanus, the 14
current COBRA beneficiaries will (e allowed to elect either the Sanus HMO or
Sanus Plus Plan and will be covered for the duration of their COBRA eligibility.
Upon completion of their COBRA eligibility they will be offered a conversion
option, Also 12 retirees Mll be transferred into either of the Sanus plans and
covered accordingly. i
o The City initiated a Reoucst For Proposal (RFP) for a :ullyinsured plan from
traditional insurance carriers. Insurance companies iuch Lc Mutual of Omaha,
The Prudential, Blue Cross/Blue Shield of Texas and Lincoln National were
requested but declined to bid given the state of uncertainty in underwriting
employee healthcare plans.
o Overall, the City's claims administrator (AIC) has the proper administrative j
practices in place which are Lnnsistent within the Indus,ri. Their strongest point
is in the area of management reporting, however, we did note that AIC should
improve their responsiveness to the City in addressing questions.
;
l
09i29/e9 12; 12 t$)' 359 M03"003
Mr. Thomas IClicc
Director of Persoruke+
City of Denton
October 3, 1989
Page Five
seoos D W Plan (Section 125) is low given the, it is in the
o Pailt)':' etio>} In the City
ear o[ operation. In revkwin the Citys c13gibili date to
partatters is at ]796. In Itionbased upon pet employee
the Is entl Sevin !7, ,March 1989 enrollment data,
' 8 500e.nd employees are Saving $94,900, As a
result the its In icetes t t although a smra percentage of employees are
partiepatingl in the Delta PI , those employe .s are Saving a significant amount
of dollllllllllllans,
0 Rat Sect;on 89 eompll Be we did runt perform no ndiscrlm(notion testa
AS th aS t+ In the race of rokaslne new re rte
perfo the QualifICA on R view of the affected plans A d noted deficiencies
Vhdch a City is requlred to rrect prior to their next plan year.
MOaACMIAIn=
Based upon ourrevit% ot# recommendad*4 ere as follows- nt of 0 Re
ultfma ^1Y upon b eefor tthetfirtarnl v1blHty of tthle Plains w+ether it is insured
or selfH"Jur
In perttra), wp belIeIm mane Ant of the Plan under a self insured arrang8c~mem
Is
Mang mo be flciAl In that a pbyan have maximum control And flexibility in
the I tnt~~ th1 Plan. Further, a e3erue associated with nlanaging a plan under
the se •fitau>Ance errangame t Is lover due to elimination Of the margin costs
e8socl teed vvkh fullrins ued Aria.
Short. Appears that a Senus/New York Life Alternative b the more
appro Hate 1lternative give the competitive pricing of their proposal, we
belle Senuti/New York Ufe mmpetidve rates are Indicative of their desire to
estAN h the elves in the ton market area.
In SU ary !arid in oonluncd n with the We It appears that selection of the
Santa/ ew York Life prop t' 7 is the most appropriate alternative for the city
At this time. It should be air sled however, that eve view this Alternative as a
short•t rm fin to the City$ Me 'cal NAn expenses. Should Sanus/New York Life
expert nee $i nificanl losses d ng the first two Yvan of their contract, the City
cane ot a 1I $nlficant rate in aye.
o Should the City continue its nt Medical Platt pro am, it should require
AIC iritiete ' formal fr; ern Audit pro em Irnmedately, and that claims
Nirlimplic ng '!curacy ra ts inoorporate~ Into the contract, Further, an
xdent dAlms uit Sh d be performed to ensure AIC is processing
uralely and in confo erica with the Cltys plan design.
1
1
Mr. Thomas Klinck
Director of Personnel
City of Denton
October 3, 5939
Page Six
o The City should strive to further educate employees regarding the financial
benefits obtained through pining in the Delta plan. Given the rate increase of
the new plan, employees have more incentive than ever to join in this plan.
o Employee communicatIon regarding the benefit plans is critical to the success of
the plans. Based upon the data we reviewed, communication is, overall,
comprehensive. We noted that the Summary Plan Document should be
redeveloped to provide ease of reading by the City's employees. Another area of
concern is the manner in which the City has communicated the status of the
Medical Plan to all employees. The City should consider continuing the EIC
meetings to educate employees about the financial condition of the Medical
Plan, discuss alternatives available to control costs, and obtain their feedback
regarding those alternatives. By utilizing this process, the employee; could share
in the responsibility of controlling medical plan costs.
i
i
I We appreciate the opportunity to serve the City of Denton and look forward to reviewing our
recommendations with you at your request. Please contact Mr. Dave Palatiere at 214/754-
'12D4, to nddress your questions.
Sincerely,
~I
COOPERS & LYBRAND
I
I
I' ~
n.rv A
11 ~wTABLE OF CONTENTS
l ~e
i L PROJECT BACKGROUND 1
H. SCOPE AND APPROACH 1
Ill. OBSERVATIONS 4
Phase 1 Analysis oI Existing health Insurance Progra A Plan Design 4
B, Claims Administration Review 6
C. Section 125 Plan Review(The Delta Plan) 14
D. Emplo)vc Communications 15
E. Benefit Plan Comparison 17
F. Statistical Analysis 18
G. Review of Other Plans 19
Phase II Strategic Etan Op ns and Fun 1inQ
Arrangement 20
Phase III AsluarialAnalysfq for Pro Lions of
Insurnnce Fund 23
Ph ue IV Review and Agalysis of CNirrent
SCinl?113nSt ailh Federal I Bv%c 24
I
I
I
I
F
PJWJECT ACKGROUND
The City of Denton implemented a self-insured Medical plan in 1978. Over the years,
the financial position of the Medical plan has been relatively stable. However, over a
period of the last 18-24 months the claims paid amounts have increased significantly
due primarily to the occurrence of individual "shock" claims and an overall higher
medical inflation rate that has reoccurred over the last tan years throughout the
medical industry.
The financial position of the Medical plan vas recognized and addressed by the Cityy's
upper management as early as Sept=r 1987 with a reported deficit of $13,000. To
encourage participation in the self insured plan and generate potential savings throu&h
favorable rates, the City contracted with Southwest Preferred Health Network to
October 1987 to implement a Preferred Provider Organization. In addition, the City
increased its contribution for employees' insurance 15%, and employee rates for souse,
children and family coverages were increased effective November 193710%, 10%, and
179o' respectively. This was a difficult decision as no salary increases had been granted
due to restricted budget dollars.
In April, 1988, the City re-assessed whether to consider a midyear salary increase.
Again, because of budget constraints, the decision ;vas to delay any salary increases
until the next budget year. It was during this same time-bame that with the onset of
additional "shock claims", management addressed the feasibility of an additional
increase in health insurance rates. Based upon documentation we reviewed,
management analyzed the situation, developed financial models illustrating the effect of
rate increases, increased administrative charges, and Ci', contributions. As financial
projections indicated an apppfo)dmate deficit of 5300,OW in May, 1988, management
proposed rate Increases of 50% to 100%. The City reviewed its options and decided
not to tmplcptent a rate increase as it thought employee morale problems would result.
Howev11, the Cit% dt l implement a three-step approach to further deal with rising
medical plan costs. 1 This approach included increasing rates 2030%, based upon
level of coverage, at the November 1988 plan year; 1) contributing $170,000 into the
insurance fund; and 3) funding a study to further anrdy7e medical plan issues.
Another factor impacting the City's Medical plan is the fluctuation in the medical
community existing to the Denton area. In goner al, the provider community has not
been stable over the last two years as evidenced by the restructuring of the Southwest
Health Plan in late summer, 1988. This restructuring caused the City to negotiate
directly with its primary physician group unde- less than favorable conditions. In
addition, the closing of Flow Memorial and t'ne more recent Chapter It filing of
Maxicare have contributed to provider unstableness. Ills Instability In the marketplace
does not promote employer-provider relations ubich are critical for managing
employee health care costs.
H. SCOPE k APPROACH
As outlined in our proposal of December '1, 1988, we performed a comprehensive
review of the primary areas Involved in the management of the City's benefit plans.
II I
i
C y
i
I
II ,
r
f In performing our review, we performed the following tasks:
Interviewed key City of Denton management personnel to obtain an
historical perspective of the plans.
Met numerous times with the City's Employee Insurance Committee
(EIC) throe&hout the entire process in order to ensure employee
participation to the recision-making process.
Reviewed pertinent contracts and plan documents,
Performed an on-site review of the City's claims administrator, August
International Corporation.
Obtained and processed the City's medical claims history tape to develop
relevant statistical data.
Obtained and processed the City's eligibility tape to review Section 125
Plan participation.
• Developed actuarial model to project claims costs.
The scope of our services included:
j 1. Phase I • Mat a of t?b_ sting Health Incnr~nce Fr~eram
A. Plan Design
We reviewed the current PPO plan and City plan In terms of:
Deductible and cope ents
Incentives to utilize P~PO plan
IJtuization of PPO versus non•PPO providers
B. Claims Administration
We performed an on-site operational review of August International
Corporation A1C), the Citys claims administrator and Utilization
Review(UR) ~irm.
C. Section 125 Plait
We developed employee and City savings estimates, reviewed
participation levels and employee communication materials.
D. Employee Communications
We reviewed employee communications used in the day-today operation
of the Personnel Department.
II III
i
2
f
A d.. Y
E. Benefit Plan Comparison
We developed a comparison of benefit plans offered by Denton area
employers and other municipalities in terms of:
Benefit Design
Coverage Levels
Cost Containment Program
Rates and Employee/ Employer Contribution levels
F. Statistical Analysis of Medical Plan Utilization
We developed statistical/ utilization data such as:
Average cost per day by hosppital providers
Average cost per admission by hospital providers
Cost by ma)or diagnostic category
i 0. Review Other Plans
We have reviewed additional plans from the perspective of level of
benefits, costs, etc. Plans reviewed were:
Long Term Disability (LTD)
Life Insurance
Accidental Death and Dismemberment
2, Phaj l[ • St=gLc PEan iar and Funding, Axw¢SmentS
In association with the Employee Insurance Committee, we reviewed several
strategic plan options including:
All HMO plan
l Moving the Plan to a Fully-insured arrangement
J Retaining the current Self-insured Plan with significant plan design
changes
't'hese primary options were reviewed using the following evaluation criteria:
Qualityof Providers/Services
Affordability of Plans
Accessibility of Providers
Stabilityof Plans
Citys Financial Liability
Based upon our analysis and numerous meetings with City management and the
EIC, we developed a recommended course of action.
I
i
i
3
I
I
1
3. Phase III - DeyeIQp_MnarialAnaIygjs for ctions Of Insurance Fttnd
A. Development of a 5-year forecast.
We developed a 2-year forecast of plan financial activity utilizing Specific
assumptions. This projection model was provided to the City for further
refinement. We also analyzed the current plan rates by coverage level
and the City/Employee contribution levels.
4. Phase IV - Perform R .ew of Clement Compliance with Section 89 Rely tlatjOM
We performed a review of the City's plans affected by Section 89 legislation and
provided recommendations as appropriate. Our re%iewconsisted of:
A. Qualifications Standards
Ili. OBSERVATIONS
Based upon our review, our observations are as follows;
Phase I -ANALYSIS OF EMSTIN = P.A .TIf INSURANCE PROGRAM
I j
A. Plan Desiv
The current medical program is classified as a "po&a-of sale" program in that
employees can decide to utilize the network providers at the time care is
required. If employees utilize network providers, they are offered a different
plan benefit than if they utilize non-network providers.
The major characteristics of the PPO plan and the City plan are presented in
Attachment 1, Benefit Plan Comparison. Generally, they are as follows;
Under the PPO plan, the employee pays a $0 deductible, a $10 oo-pay for
office visits, $200 per hospital confinement and 10% of charges to a
maximum of $1,500 in total charges for the year. The $200 per
confinement charge does not count toward the yearly ma>amum out-of-
pocket amount.
Under the City Plan, the employee pays an annual $250 deductible and is
responsible for 20% up to $2,000 in maximum out-of-pocket expenses.
The City's PPO Network consists of the follmving local hospitals and
physicians;
Dei=
AM[ Denton Regional Medical Center
Parkside Lodge/Westgate
Denton Independent Physicians Association
i
I
4
1
fl
f
ti
~ Dallas
Humana Hospital Medical City
Baylor••Parkside Lodge
L Dallas Memorial Hospital
St. Paul Medical Center
i
I Le,ssVille
L wAisville Memorial Hospital
Fort Worth
Ft. Worth Osteopathic Medical Center
Harris Methodist
Harris Hospital-Southwest
Huguley Memorial Hospital
Comment
The CUys current PPO flan is Jexdble and convenleni. For example, for a
flivIclan's office visit, the employee pit~s a low co-pxu vent, and no claim nn Is
required to be filed by the employee. Hovvrvcr in reviewing the PPO and the City
Plan from a covered services "pective, our overall observation ie that the PPa
plan offers less bene is or at best, comparable benefits to the City plan. This Is
contrary to most N. Non- PPO plans in that most em~1o)crs provide hider
co►ero r addNonal bene s under the Pf10 an to rovide an
j ~e levels andlo
i incentive for empio)ees to ut8lm the PPO or netxnrk providers. In so doing, the
network poviders gain markelshare and the City is in a bciter position to negotiate
with the providers diving subsequent contract neVXW!ons. The success o the PPO
plan assumes of course that those providers under contract (i,e„ in the NO plan)
are cost efJi c(Ne and efficient In serving the Cityns emflo)ces.
The $10 copy nent fi)r office vlslis is arprolriate and comparable with other flan
designs ogred !n the Denson area, It sRould be noted that thts was Increased from
a $S copay, which was utilized in the prior )car's flan design.
Skilled nursing care services are tot provided under the PPO Ilan, We suWst the
City contract with local providers, sprcifcally its local hospital Irovlder, and
structure an arrangement allowing em oyces requiringthese services to obtain them.
Chiropractic services and ph)stcai therapy services are excluded under the PPO
plan. It is our understanding that this is die to the fact that the Network phyciclars
derss did not pvvtde these services. To obtain a hlgt:er lanicipallon level of focal
+nals to the PPO flan, the City should look Into covering these services
the PFO flan and restricting them under the Cityy#an. tn, to so doingthe {
Ciiyshould have grater control over costs and taNization ofserv ces.
Hospital outpatient surgery services are covered at the same level for the City flan
and the PPO plan. Hence, there is no Incentive to utilize the local PPO hosplral {
(,All Denton Regional Alcdical Center). In addition, the Plans do not require any
deductible and payat 100% of Usual & Customary, Based upon our exprdence,
it
1
S
i
a
I
outparlern services are becontin& more expensive as they are not subkct to sbndar
price controls in place f tr in item services. As a result, the City should obtain a
contractual we gguuarantt,e outpatient services join the network hospital, and
modifythe plan design to encourage employres to iodize, the network facility,
Regarding Menial & Nervous, Alcohol and Drug services, wr believe the i,tpailera
plan design limitations are appropriate. (see Attachment 1).
Regarding outpatient coverage, we suggest increasing the benefits to encourage
pnniciparus to ratitiae outputlent services more and Inpatient services less. Funher,
we suggest providing a more comprehensive level of benefits to your network mental
and nervous facility (Ba)lor Parkside and Parkside LodgelWesigwte) wuh whore
you have negotiated rates.
We are also aware o the Crty~s efforts In establWiing an Empioyre Assistance
Program SAP) usl~glocal ychologisis and psychiatrists. The establishment ofa
sound E program shoul contribute signlfncant to better ntanagement of these
servces. Further, participating profemlonals should enable the City to direct more
participants Iwo network facilities,
l
Re rding the nally for failure to precertify prior to a hospital admission, we
believe the 309benefit reduction is appropriate. This benefit reduction is
comparable to penalties f>>tnd It other plans (see Attachment 1).
The City plan off es vision benefits, white the PPO plan does not. We surest that
these benefits be negotiated with locale care pi and offired in order to Sive the City more control over co cosats. . enh t the
the P}1D plan fether~h local iders, This would ld also o enTtance
The cwrern dan requires a separate deductible for lenses and fiarries. This design is
approtadate In that the City tt of)@ring a unique benefit (i.e., U is not ofAmd by the
ntajorr?lltyofmunkipalkles)) y~et b rerbitgan up font deductible It is ensuring that
partklparns "I utalae this bene fl with sortie discretion.
B. Claims Adminigmelon Renew
Bound
An on-site claims administration operations review of CBS/Aupst International
Corporation was conducted for the City of Denton. The participants involved in
the review included:
Audi I lternatIQnal CD pOjAtion
Roberta Moreno - Group Claims Manager
George Nelson - Data Services Manager
Bernard DiFiore - Executive Vice Piesident
CoO rs & ybrand
Dave Palatiere
Joella Forester
6
I
I
w
The analysis consisted of a review of the following aspects of A1Cs claims
administration functions;
Organizational Structure
Staffing, Training and Quality Reviews
Claims Processing Flow
Claims Pa)znent Demonstration
I Security Provisions
Data Storage
Reporting Capabilities
Financial Procedures
Utilization Review Procedures
An organizational chart (see Attachment 11) is attached for )our review.
O send=
Our observations regarding the claims administration review are as follows:
i
Organizational Structure
CBS, Inc. of Dallas, Texas merged with AIC of Orange, California in
November, 1988. Mr. Bernard DiFiore, formerly President of CBS, Inc.,
became Executive Vice President upon the merger, In merging these
organizations, CBS primarily performs the claims administration
functions, AIC performs the Utilization Review activities.
CBS, Inc. became the Citys claims administrator In November, 1987.
Currently, Cynthia McCord, Unit L:ader & Trainer, Norma Powtil and
Beverly McCord are the principal ch Ims processors for the City, Roberta
Moreno manakkes the claims processors. Ms. McCord has five (5) years of
claims processing experience Ms. Pc well has four (4) years end Beverly
McCord has six b) years of claims experience.
Our specific observations include:
i
AIC assigns one processor per 1,700 employees for medical claims '
processing and one processor per 1,900 employees for dental
claims processing.
AIC targets 85 claims/day per processor after six months
employment. Claims arc counted on a per provider basis.
- The target accuracy rate for claims paid transaction and dollars is
97%. It is monitored by a daily exception report, customer service
calls and a monthly claims productivity report. These are
monitored by the Claims Manager on an informal basis.
- AIC assigns six customer service representatives to handle P.11
Texas accounts. At least three )ears Customer Service in an
Insurance Company Is required.
7
F
7771
t
r
a
Each customer service representative receives approximately 70
phone calls per day. The average length of each call is 6 - 7
minutes.
There arc two eligibility processors that update eligibility and
provider (hospital said phys:cian) information only. The eliFibiiity
processors cannot update claims history (see Security Provisions).
Utilization Review services are provided by Augmed located in
Orange, California through a 1.300 telephone number.
There is $100,000 of professional liabili!y coverage provided by
National Union Fire Insurance Company.
Commence
The number of pocessors assigned to the CU Vs account Is a ppopiale ven the number of
emlio)ees. Hovvevcr, vir believe AICs standard for the number o f emlto)res jrr pncessor
!s hlgit. The indusirystandard Is 1,00 -1,200 emfia)ces per processor for medical plans.
AIC has lmliemerued an Informal internal audit pogrant for the 0ys claims ptx-essors.
That is, a high level review is performed regarding claims pocesse hoxrver, under the
current btemal audu progam, the City cannot detennlru Us claims accuracy rate wirhotd
conducting aformal claims atui+t.
I
Ftuiher, the Ctys contract with AIC does not Include pcrfbnnance criteria sllpulating
claims pocessing accuracy rates. We recommend accuracy roes of 99% (claims paid
j dollar basis) and 98% (claims transact/grt basis).
Wthou : 4 is assumed that claims are being pucessed at an aplropiate accuracy level,
given that the City experiences $1,800,000 claims per )car, a S% error rate could result In
$90,009 of •nispald claims. As a result, we sic st that ivrlonnance criteria be added to the
contact and that an Independent audit be lvermwd.
Based upon our experience, the fees paid for claims adrninistratlon and Wizatlon review
services arc Kuhin an a ppopi'ate range.
SLITm g,Training and Quality Reviews
Our observations include:
The formal training program for new hires is approtomately three months
in duration. Before a processor is hired a minimum of three years Group i
claims e)q ericnced is required.
• Processors are provided with System Manuals, Client Master Plans and
Medical and Anatomy Tcrminololy Manuals for reference purposes.
E
• During the first month of employment Medical and Anatomy tcrminoingy
is reviewed. The second month Is divided info training on the specific
client Master Plan, eligibility verification and claims processing stem.
The first two weeks of the third month is devoted to claims process ng on
test claims. which are reviewed on a daily basis by the trainer.
S
i
1
1
Processors are eligible for salary increases after six months.
Promotions and salary increases are based on a rating system consisting
of the following areas:
Job Knowledge
Quality of work (error rate)
Production
Attendance
Overall Cooperation
comments:
Ch,erall AICs rocedures and I policies relative to staJ)frrg and training apyrar to be i
app olylate and within industry standards.
CC;ILmS Processing
The diagram describing claims processing procedures is shown in Attachment
Ill. Our specific observations are as follows.
Claim forms are uniquely colored for the City. Anew daim form m,;t be
completed each time a claim is filed. A UB-82 will be accepted without a
claim form from the hospital.
• /dC utilizes the Southwest Medical Data System software for claims
processing. The hardware is a Unisys 1900 system and is located off-site
in Orange, California. This system maintains master files, eligibility files,
group contract files, and medical coding procedures (ICD•9 and CPT4).
Claims can be submitted by either employees or providers to AIC for
processing.
4h Eligibility is updated monthly, from hardcopy provided by the City, by
designated individuals at AIC. The claims processors cannot update
eligibility files.
Claims are returned to the participant if incomplete or to the City if it can
not be determined who the claim is for. Also, a letter referring to
required data is sent to the participant.
Claims are processed on a First-in, First-out basis.
• No formalized internal auditing is performed for the City as it is not
stipulated in the contract.
• Detailed plan design parameters/maximum edits are hard coded into the
system.
i
Benefit provisions for Second Surocal Opinions, Pre-certifications and
• non-covered charges are not hard coded. These have to be verified
through plan documents.
{I
9
i
s
i
Usual and Customary allowances for physician charges are calculated
using Health Insurance Association of America (HIAA) at the 90th
percentile.
Based upon a review of the March 3, 1989 Claims and Lag Summary
report, the average turnaround time for a claim is 23 calendar days.
Comments:
Overall, the clarets processing piwedures in place appear to be appropriate. However, the
average turnaround One of 2 calendar dada is not In accordance with the Citys contract
with A1C. According to paragru#i 4.2.2f, the average turn-around time specified is 15 da}a.
This is consistent within the industry average of 12-18 calendar days.
Given the City1s high level of automation and data processing capabilities, we su&est
eligibility be updated electronically, via tape. This should provide for a more effclent,
timely and accurate process.
It should be noted that while detalled plan desigri parameters, edits, and provider data are
hard coded in the system, the processor is required to stop processing a manually review
hardeopy documentation to determine if second surgical opinions and pre-certification
requirements have been iigloxed.
Also, essors niust be knowledgable of all non-covered benefits as these are not hard
codeduroal; the syatern. This can bccome difficult as the City has digrent non-covered
charges for the City Plan and PPO plan. We sug&rst that this area be reviewed and
automated so that processing will be less dependent on an individual processor's ability!
Security Provisions
Our specific observations are as follows
I
- Claims processors have access to claim files, but do not have access to
eligibility or provider riles. The eligibility processors have access to
eligibility and provider riles, but not to claim riles.
The Claims Manager and Data Processing Manager have access to the
claim files, eligibility files and provider files/
The Claims Manager and Data Processing Manager have access to checks
and the production of checks and FOBS (E)planation of Benefits).
i
i
i
I
10
I
1
T
Individual claim payment authorization limits are as follows:
Up to $5,000 for processors after six months
$5,000 to $14,949 Umt Leader
$15,000 to $50,000 Claims Manager
Over $50,000 Vice President
System passwords are changed every 90 days.
AIC employs unique passwords for each processor. The individual
password is a four digit password, the first two digits indicate the access
level and the last two digits indicates the authorization level. The access
level part of the password allows specific processors access to specific
screens. The authorization level restricts the processors to certain start-
stop times and days of the week.
Twv invalid password tries will block the processor from the system. This
can be overridden by the Claims Manager or Data Processing Manager
only.
AIC has procedures regarding an override of payments. If a payment is
greater than $100 in excess of the Usual and Customary charge, it
requires a Claims Manager authority for payrnent. The overrides are
noted on the Exception Report which is reviewed by the Claims Manager
on a daily basis.
- AIC maintains a blanket bond for the personnel in the claims
administration department.
! commew
1 The security provisions In place are appopiale and are standard within the Industry. This
includes system passwords, override abilityr nd access to specific frles by job classification.
However, we believe that the individual ilaUns pawnent levels are h1#t especially for
processors with as little as six months on-the- job experience.
Data Storaee
Our specific observations include:
A hard copy of the claim is retained wi,hin the administration department
for two years and then is returned to the City.
The claims are not microfilmed or microfiched. j
Procedures for off-site disaster storage, procedures for storing data off-
site and recovery in the event of a power outage are outlined in I
Attachments IV and V.
AIC indicated that a disaster recovery plan is in place. A copy of that
- plan has been requested but has not yet been received.
i
11
j
I
I
f
The s}atem backup procedures are appropriate and are standard within the industry. We
suggest the City review AICs disaster recovery plan as soon as possible to ensure
appropriate procedures are in place.
TlonthlyRg~rtinyC~mbifiti c
Our observations are as follows:
According to the Cits contract moth AIC, the following addresses
whether or not required reports are provided:
Per Contract &Qvided
- Check Register (Weekly) Yes
- Claims Paid Report (Monthlyy) Yes
- Lag SummaryReport (Momhly) Yes
- Claims Incurred But Not Reported Report No
. (Annually)
P an Petformance Report (Annually) Yes
• Claims Exceed Report (Monthly) Yes ($8,000)
- Top 50 Prodders Report (Quarterly) Yes
In addition, AIC also provides the following reports:
- Eligibility Report Monthly)
Physician Report ((Quarterly)
- Diagnosis Report (Quarter] )
Outpatient Activity ReportQuarter] )
Check Exceeding $10,000 (on request
~ dents.
According to a review of the Cys r Wract with AIC and reports provided by AIC, one
s;vcifuc management report is not being provided, however AIC does W
p~v additional
teparts beyond what is requM by the contract. In general, wve believe the City is recenoing
management reports comrarable to and consistent within the industry.
Overutllization of the medical plan is usually not noticed or r+ealt +s*h toad after the end
of the plan dear. Given the financial condition of the Plan, we suggest development of
specific additional statistical report in indices which should be monitored on a monthly
basis. Thus, In terms ofmoriUoringthe medical ptan's activity, we suggest the Cltydevelop
a monthlyrepottings)stem which details the following data:
• Number of~urr4 rUs
• Target number o f patterU dais per 1,000
- Target number ofadmissions per 1,000
i
12
i
II
~l
Ir ,
- Target number of outpatient visits per 1,000
f - Actual number of pallent days per 1,000
- Actual number of admissions per 1,004
- Actual number o foutpstient visits per 1,004
Financial Proeedurec/C~ntractr+aingersicnts
Our observations are as follows:
Margaret Muse, Vice President, has authority to sign all checks.
The Cityof Denton is responsible for the funds transfer process.
A Senior Processor can initiate voids, stop-payments and refunds. Checks
are mailed to the City.
Conan r s
We did not perform an in-delrh review the fuianclallbanking lrocedives utilized by the
Cityrs hnancelaccounting depnrin:errt as this %w outside the scope of our work. However,
based upon discussions with Citys Personnel and Financial department and AIC the
established procedures appeared to conform to indusirystandards.
Utilization Review
Our observations regarding Utilization Review activities are as follows:
I
Utilization Review (UR) services are provided b Augmed of Orange,
California. The City utilizes UR services for the following programs: i
Preadmission Certification
- Second Surgical Opinion !
Concurrent Review !
j Large Case Management
Employees are required to inform their physician that they must be
precertified prior to admission to a hospital. The physician contacts the
UR firm to discuss the employees' idncss and intended treatment plan.
The UR service then authorizes the number of days the patient should
require on an inpatient basis. 3f emplo ,ees fail to receive
precertification, then their benefits are reduced (see Attachment 1). In
tho event of an emergency, anyone (family, hospital, etc.) must notify
Augmed of the admission within 48 hours.
• The initial call is received by a Medical Inquiry Technician (MIT). The
MIT obtains whatever information the caller can give. The MET will
forward the information to a nurse who calls the doctor or hospital back.
• Augmed uses their own treatment database to determine the length of
stay to be authorized.
i
13
I
I I
i
v
Z
• Pre-certification for elective procedures requires at least 10 days notice.
For urgent admissions at least 3 days notice is required and for
Emergency admissions Augmed must be called within 2 days after the
admission. Pregnancy must be pre-certified as soon as possible after
confirmation by a physician.
71,2 Orange office notifies AIC in Dallas by hardeopy of the pre-
notification. All data is collected by Augmed. The UR data is then
manually integrated by the AIC processor, with the claims processing
system.
Comments:
As the UR services are ircrbrmed in Orange, California, ;w did not p crfbrm an on-sue
review of lite policies and pwedures for staging, Ira ining etc. It should be noted that
the City initialed UR progants through Augtud in November 1988. These programs
were implemented to assist in the management ofoverall costs.
Given the significant increase in otapalient services in terns of nuntber and cost, wee
suggest the City consider expanding its Utilization Review Irogram and implement an
oulpatierusurgeryreview program.
C• Section 125 Plan Review (le Delta Plan)
T , City implemented its Section 125 Plan (The Delta Plan) in January. 1938.
Ti. Plan is administered by Employee Resources Administration Corporation
(ERAC). Our review of this area consisted of the following areas:
• Determine the estimated employee and employer savings.
• Review participation levels.
Reviewemployee communication materials.
Review plan documents.
In performing our review, we contacted the City's 125 Plan administrators,
ERAC, to obtain relevant information. We also utilized the City's employee
eligibility tape to obtain relevant data.
Comment :
. ReviewojCafEteria Plan Docwnerus
We have detailed our comments regarding the Section 125 Plan Document,
the Section 129 Dependent Care Plan Document and the Medical
Reimbursement Plan Document in Altachmsenl Vl.
Overall sve found the plan docla7tenis to be comprehensive and of
reasonable quality.
1
14
71
Y ,
We suggest the Cityinodi fytheir current docunients to ensure theycontain all
aplropnate contractual language as ldentifred in Attachment Vl.
Detennination o f C&y and F.m ployce Savings
We reviewed the Cityof Demon's March 1989 eligibility tape to detennine the
Ciiyand emplo)ce savings amounts obtained through the implemerlation of
the Delta Man.
Based upon March, 1988 data, the CUP estimated savings for the an )ear
will be $17,500 and the employee's savings for the flan )car will be 94,900.
_ Review Panicipztion Levels
Attachmerd VII provides a breakdown of the participation in the Cityrs
Delta ptan by divisions.
The data indicates that 130 out of 775 employees are currently participating
in the Delta Plan.
As this is the second year the Cityhas offered ins Delta Plan, the wrticipution
level is considered tow (16.9%).
Fij),seven (57) employees are currently panicilnting in the Medical
Reimbursement plan.
T%vntylluee (23) employees are currently participating in the childcare plan.
E
Lowest participation levels were In the tulicel patrol group where only one
(1) o fthe 75 empl o)ees elected into the Plan,
The fire operations group was one of the hner participation groups with 10
employees o f68 total electing into the 1252 n.
Although we believe the participation level is below our expectations, the
data Indicates that those Individuals who are particippaatin are doing so to a
sgnif fan. event and taking advantage of the tax benefits ogred through
h
D. Employee Communications
Given the multitude of changes and complebty of benefit tans, employee
communication is critical to the success of employee understanding and
acceptance of their benefit plans. This is especially true in regard to the City of
Denton as it has implemented its PPO plan as an alternative to its City plan for
medical coverage. In the FPO plan, physicians associated with the Denton
Independent Physicians Association are considered as providers and thus
employees utilizing these providers have different plan benefits. We understand
that the City communicates benefit programs using the Employee Insurance
Committee.
15
I
i
t
i
r.~s
Our analysis is this area consisted of reviewing current communication materials
(i.c., employee orientation information) and a walk through of the Personnel
Department's employee records processing area.
CQM
L4:
The Cis Employee Orientation package Is contfrehersive in detailinglhe benefits of red
bythe CUy. Communication materials reviewed included:
Medical Plan
Schedule of benefits for the City and PPO plans and a comparison with the
HAfO arts.
Identification of all PPO hospitals and pVtysicians.
Pre,:eniftcatton and Utilization Review progam.
The Cftys Phamracy Card program and idetui fication of all panicip sting
pharmacies.
A samlie Medical Clairn form.
Retirement ftrams
Texas Municipal Retiremew Syslem
LTD Plan
i
Affrmative Action Program and Equal Entployrnent OpponunityPlan.
The City ofDenton Policy on Harassment.
j Sa fetyand Emergency Policies.
Information on Emplo)ve Discounts.
Denson Area Teachers Credit Union Special Services. j
1 General
Cityo Denton Organization Chan
Bcne sSummary{SChary ofallbonefitsofkred)
Em ogre Orientation Chtecklist
Evaluation ofEmpio}ce Orientation Program
Departmental Policies reviewed include. The emplo>ce follow up form used to
document response to employees questions regrrdingtheir insurance claims.
PersonnellEmflo)rr Relations Inquiry f9om which documents all inquires to
Personne! for any benefit area (emptoynent, classification, benefits, rompensadin
or training
I
I
1 11l
i
16
I'
i
i
l
Summary Plan Document (SPD)
The SPD is utilized to present the medical Tian bene fits to employees. It is the most
commonly used document by employees when they have a question regarding then
medical prog. ams.
Overall, wr lbund the SPD document to be poody organized, which makes it more
difficult to read and comprehend. Further, we urre unable to find the prescribed
coverage levels for Alcohol & Substance Abuse services.
We recommend the Plan Document be re-dt.veloped to ensure all major services are
stated and to present material in a more understandable format. Developing an
caster to read l understand plan document will bene fit the Cuy m that employees will
not have to call the Personnel department as much regarding benefu issues.
The orientation package did not include information about the Ctys Delta Plan, by
which employees can pruchase health insurance, dependent care services and
medical care services on a pre-tax bass. We suggest this inionnalion be included.
E. Benefit Plan nmpariso
As per our proposal, we developed a Benefit Plan Comparison (Attachment I )
which compares the primary characteristics of the plan desig and the
employer /employee contributions among the following organizations:
• City of Denton - Richardson 1SD
City of Lewisville City of Arlington
• City of Carrollton City of Dallas
Denton !SD City of Ft. Worth
City of Richardson City of Grand Prairie
• City of Garland City of Mesquite
City of Plano
As noted previously, At surveyed several Denton-area employers and other
1 municipalities regarding their medical plans. This information is summarized in
Attachment I.
Based upon our surrey, the following observations were noted:
A lifetime maximum of $1,000,000 per employee was provided by all
respondents.
The deductible levels ranged from $100 per individual to $250 per
individual. The City's non•PPO deductible was found to be the highest of
the respondents.
The City's annual out-of-pocket maximum of $2,000 for the City plan and
$1,500 for the PPO plan %ere found to be the highest of respondents.
The City's use of UR provisions and cost containment provisions wore
similar to programs in place at other employers surveyed.
i
I
I
17
II
R
1
l
The City's coverage for Mental & Nervous, and Drug abuse programs
were generally more generous than programs in place at other emplohers
surveyed.
With the exception of the City of Carrollton, the employees' contributions
for coverage was similar to those of other municipalities surveyed.
With the exception of the City of Carrollton, the City's stated contribution
of $87.80 per employee per month wa:: generally lower than the
contributions of other employers surveyed.
The City is only one of two municipalities which offers a Vision program.
Comments:
Although the $87.80 monthly per eniploy<e contribution fom the Cityap ars loxrrthan
the other plans swve)ed, since claims and administrative expenses eareeds the emplowd
deductions Pius Citycapitation, the Cr yls implicitly funding the Plan's shonfall.
Also, althougfi the CUys deductible and annual out-ofpocket maximum amounts are
hiew than those at other municiptilrties, »r believe they are appropriate given pian
Id Uizalion.
F. Statistical Analysis
We obtained a medical claims history tape from AIC to perform statistical
analysis. The data received from AIC consisted of paid claims from November
1, 1987 through October 31, 1988. This inform ation is contained in our Standard
Report package, which was previously presented to management.
Our observations are as follows:
Total paid claims during this time period (11 months) amounted to
$1,268,580.
Hospital based services accounted for - 660,000 or 52%-
Physician based services accounted for - 390,000 or 31°fo;
While other services (x-ray, prescription drug) accounted for 170/10.
The City's prescriptions drugs amounted to $77,000 or 6% of total paid
claims.
In reviewing paid claims activity byy patient class (active, spouse and
child), the data indicated that 50% of the claims were incurred by
children. This is significantly higher than industry norms and can be
explained by the City's experience with a single child dependent.
s
18
III,
i
t
We renewed the inpatient hospital charges by diagnostic category and
determined that the top 3 health problems include:
1. Nervous System Disorders 33%
2. Heart Problems 16-Yo
3. Cancers 7%
The top 5 hospitals serving the City's employees are:
AM' Denton Regional Medical Center 32% of total charges
Dal'as Re habilitation Institute 2440 of tots' charges
VA Medical Center 75". of total charges
Humana Hospital 5% of total charges
Baylor University Medical 4% of total charges
In Lbnsidering the distribution of paid claims, 4 patients accounted for
$48C,OU3 or 38% of total paid claims.
Comments:
The distribution of charges betxren hospital, ph)aician and other is consistent with industry
norms. Also.. the pr,ucriprion drug charges are lower than exprcted. We anticipated that
these charg; wvull be higher due to the City's prescription card program which lererally
increases overall villimilon and costs.
G. ReyiewA_Qftr Plan
We performed a summary level review of the City's Life Insurance, Accidental
Death and Dismemberment (AD&D), and Long Term Disability (LTD) plans.
The Life Insurance and AD&D plans are fully-insured plans through
Washington National Insurance Company. All employees are eligible for these
benefits, however for active, fill-time employees the City pa Vie entire cost,
while for part-time employees the cost is shared between the City and employee.
i
Employees designated as executives can obtain insurance to a maximum of 2x
annual salary. For all other employees, the max mum level of insurance is one
times annual salary within a minimum of $15,000.
The cos of the Life insurance progrart is $.23/$1,000.
The AD&D plan is a standard industry plan with the same eligibilityy and cost
sharing methodology as the Life plan. The cost of the AD&D plan is
5.03/$1,000.
The LTD Plan is currently undervzitten by Mutual of Omaha. It is the C.ty's
intention to change carriers 9nd contract with North American Life effective
April 15, 1989.
The Plan's benefit is 60% of base salary to a maximum benefit of $3,500/month.
The cost of the LTD Plan under North American is 0.46% of payroll.
it
19
t
s
4
omm r`•
The Li lns!rance, AD&D and LTD flans are standard trans. The costs ojthese Banc
are $0.231$1,0001brthe Lik Insurance Plan and $0.031$!,000 firthe AD &D plan, which
are within ithl stry nornis. We also understand that North American Life has agreed to
incorporate rowractual language favorable to the City to assist with discussions with the
Citys Fite Fighters.
PHASE Il • STBATEGIC PL. N OP Q.NS AND aINDIN ARRANC~F^_, IENT$
In assessing strategic plan options, working with the Citys Employee Insurance
Committee, we identified several alternatives and developed the criteria for ~
evaluation of each of the alternatives. I
The identified alternatives included:
1
An All HMO Plan
Moving the Plan to a fully-insured basis.
A rr Structuring of the Citys current plan
Data was reviewed from several sources including employee surveys, bid
proposals from insurance carriers, and HMO bid proposals. With respect to
proposals received from traditional insurance companies, the City developed a
Request For Proposal (RFP) for insurance plans and submitted it to seventeen
(17) insurance companies, third-party administrators, and insurance brokers.
T7hie list of companies wits received an RFP included Lincoln National Life,
General American Life, h'uiual of Omaha, The Travelers, Blue Cross/Blue
Shield of Texas, The Prudential, Sanus, Cigna, and 'Me Hartford, The City
received proposals from The Travelers, Sanus and the Hartford only. Based
upon the City's review -he proposals received were found to be inappropriate
either due to level of rates, benefit design, or failure to meet the bid
specifications.
I
t Based upon the results of the initial RFP, the City re•initiat-.d the RFP process
and received bids from Sanus and Aetna/Soui,hArst Health HMO. Based upon
the City's analysis, the Sanus alternative emerf;ed as the most appropriate for
further review as the Aetna proposal did not include a Major Medical
component.
As a result of the analysis, two primary alternatives evolved:
Sanus/New York Life
Restructuring of Current Medical Plan
The rates and plan design for these alternatives are shown in Attachment Vlll.
The Sanus/New York proposal consists of two options--a Sanus HMO only
option, and a combined insurance plan/HMO option (Sanus Plus). The
Sanus/New York Life alternative is a fully-insured program, underwritten by
New York Life.
The Sanus HMO only option offers the usual HMO benefits through the
utilization of selectee physicians. We understand that the Santis HMO has five
t
20
k
f
t
lr F
1
i primary care physicians located in the Denton/Sanger area. The Sanus HMO
only option offers benefits at a minimal premium increase to employees.
The Santis Pius program option offers employees the ability to utilize HMO
physicians should they desire, as well as non-HMO physicians. Thus, employees
enrolled in this Ian option can utilize any physician of their choice, under a
different benefit pp level.
As an alterative to the fully-insured arrangement, the City's current Medical Plan
was restructured into three options, each option providin$ a specific level of
benefits at a different rate structure. The three options consisted of:
1) Catastrophic Plan-Covers primarily inpatient/in-hospital services only.
2) Exclusive Provider Plan--Offers comprehensive coverage of services, but
requires employees to utilize specific providers.
3) Comprehensive Plan--Offers the most comprehensive coverage of
services and employees can utilize any provider.
I
At the City's req,iest, we initiated contract negotiations with Denton providers.
A Request for In-Hospital Services was received from Denton Regional Medical
Center and HCA, Denton Community Hospital. Based upon our anal Xsis,
Denton Regional Medical Center was selected as the most appropriate facility
(see Attachment IX - Hospital Proposal Review). We also successfully,
negotiated with the Denton IPA for physician services. This physician group
would serve as the network physicians G the Exclusive Provider Plan.
Upon completion of the review of proposals from Sanus/New York Life and
final negotiations with selected providers, we met with the Employee Insurance
Committee to develop evaluation criteria of each of the two options. The
evaluation criteria utilized was:
Quality of the Plan in terms of physicians, plan design
Affordability of the Plan
Accessibility of the Plan in terms of number of physicians, type of
pphysicians
5tabilit of the Plan
City's Financial Liability
The evaluation process consisted of developing a weight of 1-10, with 10 being
the highest indicating a significant level of importance. The two options were
then rated on a scale of 1.10 using the five criteria above.
3
,
I
I
21
I
I
f
The final results of the scoring is presented below.
Medical Plan Options Evaluation
Scoring Matrix
Alternatives
Sanus/ Proposed
Wright New York .if. S~ Citvlans I&=
Qualit 8 7 56 7 56
Affordability 9 10 490 4 2 18
Accessibility 7 4
Stability 5 4 20 5 22.58
City's Financial
Liability 7 10 70 7
49
Total 285
134
The rationale used by the Employee Insurance Committee in its evaluation of
the Options is as follows:
Q~lity:
The criteria of quality was perhaps the most difficult to evaluate, given that as
layman, the Committee simply could not assess the level of medical expertise of
nnhyth itn the t"
option, chile score the 7HMOmore hasrelevant
limi eod laph sician
representation, the Sanus Plus option allows use of any physician. With respect
to the proposed City plans, the scare of 7 indicates that although we haw. a low
cost option (Catastrophic Plan), only In•hospita! services are covered under this
plan.
A[fs~dal!ility:
l~_ J The criteria of affordability was the easiest to evaluate and given the prennlum
rates shown in Attachment VIII, the Santis HMO and Sanus Pius rograms were
clearly the most appropriate alternative. This criteria accounted for much of the
difference in the overall evaluation total scoring.
In addition, the Satnus/New York Life proposal guarantees a not to exceed rate
irc-rease of 22% from the second year, unless the state mandates additional
benefits.
b3litx
The criteria of accessibility was viewed from the perspectives of access to
physicians and plan design. It is important to consider both of these issues in
evaluating accessibility for the two plan alternatives under consideration.
Although, the Santis HMO option offers a limited number of primary care
physicians, compared to the pity's Catastrophic Plan, under which physician
22
f ~
' I
services are not covered unless you are in the Hospital or require emergency
room services, it was felt that the access to HMO physicians is preferential.
In addition, in comparing the Sanus Plus plan to the Exclusive Provider Plan,
employees are able to utilize any physician (under the Sanus plan), versus using
a specific providerlhospiti (under the EPO plan), at comparable rates.
Stability;
Evaluating the criteria of stability, the Committee found the City plans offered a
hi.~her degree of stability. However, the close evaluation score reflects the
ability of employees to use any physician under the Sanus Plus option.
Cjt~e Financial Liability.
ne Committee acknowledged the fact that the City+s current plan is in a
significant deficit and that future deficits of the same or similar size would be
intolerable. The weight given to this criteria reflects the knowledge of the
significance of this liabilityhas on overall Cityoperations.
By moving towards the Sanus alternative, the City can reduce its liability for the
second year of the contract given that the Sanus contract calls for a second year
rate guarantee. This was reflected in the evaluation score of 10 for the Sanus
alternatives.
We would like to note again that under the Sanus alternative, the City continues
to be responsible for individuals not actively at work and who are receiving
benefits under the LTD plan.
Comr»entsr
Gn-en the criteria under consideration, the consensus ofthe Conunittee was that the
Sanus alternative tms most appoplate. It should be noted that this is viewed as
short-term solution to the CUys edc'al Ran poblentt. Should Sanus incur
significant loses during their first tsvo }ears, the City can be sure to face a significant
rate increase in the future.
PHASE 111 ACTUARIAL ANALINIS FOR PROJECTIONS OF 1,61JRA\'CE FLND
We have reviewed the benefit plans financial projection model and base data prepartd
by the City of Denton. ...tachment X svmmarizes the estimated results for plan years
1987 through 1990 using CRL revised assumptions for cost, premiums, plan
anticipation, and current plan design. Based upon the revenue, expense and f id
balance amounts provided, and assuming an incurred but not reported (IBNR) claons
reserve liability of $233,937, at September 30, 1988, the plan had a deficit of ($797,066).
The year ending 9/30188 numbers do not include consideration for the anticipated
stop-loss reimbursement from Washington National of approximately $465,000.
Assuming the City of Denton and employee premium levels are maintained at the
October, 1988 level, the City receives $170,000 from Washington National and makes
an additional $170,000 Jump suns contribution, and claims paid increase at an annual
rate of 20%, the cumulative plan deficit is projected to increase to approximately
23
1
1
a
i
($1,400,000) at September 30, 1989 and approximately ($3,000,000) at September 30,
1990. These projected fund deficits do not reflect receiving the balance of the $295,000
stop-loss settlement from Washington National.
Comments
1BNR Ltabil tt v
The accrued 1BNR claims liability of $234,000 at September 30, 1988 represents
approximately 2,7 months of claims expense. Based on August International's published
average turnaround rime of 23 days, an acceptable IBNR claims liubdUy would be to the
range of 2.5 to 3.5 tnortths ofclaims. The stated reserve sins within that range.
Participation In the plan Increased dramatically during op n enrollment in Novemb:r,
1988. Therefore to recogrtlze the Increase In claims liabrhty the 198811989 claims
projections in'r& a reserve adpinient of $341,000. The estlmaled required reserve at
September 30,1989 is $575,000, or 3 months o f exprct¢d claun s.
CUIX Conn iblilio
The plan :tas been Ina defk* position since February, 1987. Based on the rate structure in
place, employees are contributing 40% of the total p wilum collected and the Cityts
contribution is the balance o 60%. However, in reality, disregarding the $170,000 pa neat
received from Washington National (VN), since m-enues are estbnated to be $980,000 less
than claims insurance premiums and a lnistratpve expenses, a atone representative ratio
of the sharin of plan costs is 220% fiom employces and 80% ended by the Cit . For the
198811989 6cal )ear,mthe ~m s h is irnl uaythe jud indth$87.81 per e emerging tplo)re o(ntnbut~.1yN
and $610,000 City) preortfal II
I PHASE IV REVIEIV AND Alh
~DFRAI.I.AWS
Part of our analysis under Phase IV of the ro cct involved reviev ing the Citys welfare
f plans as theypertain to the Qualification Standards of IRC Section 89.
'the Qualification Standards require that certain plans meet the following
requirements:
The plan must be in writing.
The employees must be notified of their rights and benefits under the plan.
The employees'rights must be legally enforceable,
h The plan must be established with the intention of being permanent.
The plan must be maintained for the exclusive benefit of the employees.
We have completed a preliminary analysis of the following welfare plans:
Group Term life plan
Medical plan
24
}
1
We Hit pi~ indudin the $Wding account and depenJent care
Educltion ~tsbtance plan
CMMtW:
r• n
BaNdIm mkcr lahwgjAj m, p
doer rm
satin wwe rwht~puaal cars rJon land is fn In a ontal
lon Stang, the 1 enUnts should be lnduded In the Plan
The an document should outline 014090y and ptrtfclpation requlnrnents
and men! Pva
"
Kft Id Stan docwnenl e,*ln the basic Ividln8 of the bene,6ts ae,,
4adAw the bent tt then a tncst eaabl hed, Tow an the p+emi~une etcj.
• ?he Phan &VUmnt shott{d btdlcate a plan yew:
• 7'hte document skouid identryy a Ptah sponsor, adrnfnlstralosr, and
T7te plan docunsent shotdd Gt kwe that the beneplrr an p the exclusive
rtehts ~fthe employees.
i
11ye *n docu»tent sh u!d address any existing condilbnal lL•nieatlons or
hWh"wPJ$ Pr cort#ukd pWicl fation.
i Ae pgan docGn w dtouid have an Octal nano. J
77te pbzn document thoald adlfte the amendment p'ocedirrw, ~
771e *n doc wwd shWd esptain a clalou appeal pmts.
With reaped tp the Section 89 ,Wxijintnatlon tentn$ legitlation is wilt pending
at the demi level and thin asp dd O fSecdon 89 tnay be repealed,
ax an thaye empdo ►s~t o~ae provided ilk fnrtt>nnce In caress o 3511,000 Fay
`I t n this be k $'50,000, and thus, thm is no egw pvetfce
f
I
u
i
i ~
1
2• t~/ed~l a!_Plan
Based on the documents we received, the dfedical plan will not sails the written
requirement under the QualiJicatlon Standards. In order to satisfy the lualification
Standards, the ibllosi ngitems should be included in the plan document:
The plan document should indicate a plan )cur,
The qan document should outline the methalology used for determining the
plans funding.
The plan document should identify the plan fiduciaries.
The plan document should be given an official name.
3. The ('a tgBSLI
Based on the documents we have recelved, the Cakleria dan which includes the
Dependent Can Han and the Spendi•ig Account would tr ire the l6llo►ving
modificalions in order to
lam' the Quali fucation Standards of /RC Section 89:
o The Plan should stale that it is established for the exclusive bene ft ofeligible
emplo)res and their dependents.
o The Plan should state that benefus are intended to be permanent.
4• Cation AscLctan o ram
As of December 31, 1988, the pnefiientid tax flavored status of Section 127(b)
Edducatlonal Assistance plans expired.
ReLtubursements made
127(b) dan are subject to Federal Income Taxes unless Congess extends the
pe rential tax treatment thtough 1989. Ater revlexin the Citys plan document, it
j aPlxars that dour plan Yq ifYas either an F~fuca for toil Assistance an under
Section 127(b) er ns a necesc~, bttsirtess, ezprrue under Section 162. The key
phrase that maydetermtne which Section ojthe code yotvbeneft dassijies, Ls:
"Courses without a degree pion on file muss be ,f~sltfued, bylhe
1 emptoyee, as beteg$ jib related to a niernorandwn to
PersonncllErnployre Kelattoru D.rpxintment.«
Under Section 162, exilenoes for education are deductible as ordinary business
expenses provided the education -
(1) Maintains or improves skulls required by the lndAIddual in his
employment or,
(2) Was the express requirements of apylicable law or regulations,
imposed as a condition to the reteni n by the individual of an
established employment relationship, status, or rate ofcompensation.
Educational expenses would not be covered under Section 162 however, If the
expenses were to meet a minimum educational requirement fir a position. An
example ofan non-deductible educational expense under Section 162 would he:
26
i~
s
f
i
' (1) If individual A was hired into a position that required a bachelor's degree
and Individual A does not yet possess his bachelor's der.e, any educational
assistance by the City towards the completion of individual As bachelor's
degree would not be deductible under Section 162.
l
If, in the above example, the City" reimburse Individual A for his educational
expenses, then these benefits would qualify under Sect ion 127(b).
Under Section 127(b), an Education al Assistance plan is used to provide jbr
expenses incurred for education and is not limited to job related courses.
The manner in which you are administenng your educational assistance program
will determine whether It is a Section 89 plan or not. Section 89 does not cover
reimbursement of educational expenses under Section 162 however, Section 89 does
cover Educational Assistance plans under Section 127(b).
If your program Is considered a Section 127(b) Educational Assistance plan and If 1
Congress extends the tax favored status through 1989, and you do not report an
educational assistance on an em oyce's W-2, )our Educational Assistance plan w9l
need to satisfy the Qualification Standards. If the plan Is classified as an
Educational pense under Section 162, then your Ilan does not have to satisfythe
Qualification Standards.
v
Based on your current docutnera, and t your plan Is considered a Section 127(b)
Educational Assistance an, ur n would not satisfy the Qualtficatlon
Standards for reasons sintfar to the Croup Term Life Plan.
1
1
I~
i
i I
27
I
F
I
f
J= LIT=
jl=
D7= E33:1=
LIZ=
LLIL=
LL= LLr-=
LIM=
Lla=
LIM=
Lrx-
I-Jzu
i
JZ=
LY~
II
i
I ~
i
I
~I
9~ ~ a Y N r
8 8 $ SL
$a a
i ~r$ Q a M
6$ a 0
a$.
e ~
s ~ ~ M
i
I
I
1
li $ $ Fb
a
y f
Ing
s
m o I
I,!
I i3[$
I~1
4
1
e fl it
i
r ~ y
l .
1 ~ N
V
i
1
`I
~~J p i
$ $
~ ~
a ~
~ ~ 0 ~ q
g~ ~ ~ a
~ ~ R
~
- -
~ t t
~ ~ ~ ~
8
! ~ ~ ~ ~ ~
~ ~ ~
~ ~ ~
~ ~ ~ ~
r
~ ~
~ ~
Q ~ A
~ ~
~ ~
I
i
.y
or
R
f
i
e
i
f
a
~ I
I I
F d- i j
$ L
F
IL
j a
I
i
ii« Q
811
I
-
I
8
i
I
V
..y
d
A
1 _ a
R
a
Y
a
fit
r
f
G
w. . a _ i:•,.~
"s~
1' ~ i ZS ' L 8 EJAp
x
~a
r 4 Q
i
'r
F
3
1
i
if
M r 1
s a
I~
1
t
ell 8#1
8
t ~
$ it
Ra it
Q
oil
~ r
M
r
i i
r
I
3 I
I
I
I
.14
h
a i 1` R t` A
a M iM1
4
I i
i
I
I
f
a~
i
e ~u
Q
~ r
1
i
tS ~I W N
N
It L
9.
a
i E
a
g ~
4
r
e
a V
i
i j
a
~ r
i
~a
I
R
9
r
tx «°M 3
~-GOP
r
I
N ~ M Y
4
i w
j
E
I,
I
r
~ ln9w+4~
V ~
~ ~ ~ t ~
~ f
P
~~r ~ ~ d ~
~ ~ ~
A ~ t`t t` ~
~
R ~ ► ~
f ~ Q'
~
i
i ~ ~ ~
~ ~
A i
' I~
I ~
V
j
i I
I
ill
a
Q Q
a
It I It
II
I
1+ N ~ p
*S
r
i ~ a O
i
~I
1
i
L41'-y'.
✓:t l.n .f. V. .V
a n
I
T f
r
~ 1
i
r
E
~ W
1 ~ ~ C ~ a e
` ~ 8p ou
I ~
n
6R
I
i
pp
~al
e
I
V A
e s lit
II QYr
I,
f
n _
666 a
k
~ye.-. yA 4 mGT
4 `Ce 4 po
~(Me(rw/' ~ C ~ {Qi
QQ
fi■] ~ a
P
i s
f
i
too
X41
i
r,
9
C ~ J ~
N~ ~ ~ O
~ ~ ~ ~
r,
a ~ ~ ~
M "
r--~ ~ ~ ~ ~
r~~ ~
~ s~~ ~ a
~ ~ ~ ~h
~ ~ ~
~ s ~ ~
~ ~
~
~ ~
~i ~ ~ a
~ ~
~ ~
E ~ ~ $
I
i ~ ~
~ ~ ;
s ~
~ ~
~ ~ ~
N N N f
~ t ~ C
~ ~ ~
.,4
~
~ ~ ~ ~ ~ Q~
6 ~ ~ 7
' N ~
i
i ~ ~
~ a
~
~ ~
~g
R~ a
i
i
~ Dt
i
i i
Y
~ J
L]
fill m m
it~I ally Oily alai
s ca IV IV
r
~ V .y V~ Q N M N pN
HIS V
S ~as~
if 4
` yy~~ ~ ~ ~ r J N r
6 O .oo pb er r @
~ ~ O O S ~ G
it oy i
~s ~4 r
~ ~VaiM'vN ,
W N ' Y ~ P
R~
t a
~ ~ a~ ~
M
R
~ s
~ ~
~1
~ ~ ~ s
i
Ik ~ ~ ~ ~
E
E
~ t n
~ ~ ~
~ ~ w a q a~
~ r~
~ ~
r-- ~ ~ ~ ~ ~
1 ~A
~ ~ ~
~I ~ ~ ~ ~
~ ~ p
~ ~
~ R
4
~
I
{ I
I
h
r O >33 N Z0 Qn _a Dp
3 N P < rp~" b
VV11 Cb
T t1
P9 'I PH
N "
(CC0_
< < < < M
N` NRI
- NMrcR N
E G ^Y Pci reaAm Zi
2 70 A n ~ P1
64
y S N
M.4
-411
R's, ~I
i
1
f
I
ATTACOMENT III
INCOMING MAIL WORK FLOW
I-38
MAIL RECEIVED
OPEN & DATE
STAMP MAIL
ATTACH
I ; SCAN FOR HINCOMPLETE ADDITIONAL RETURRN TO
UDE
COMP.ETENESS INFO FORM
I
t
i
SORT ORRESPONDENC CUSTOMER
MAIL SERVICE
CLAIMS SUPERVISOR
CURRENT
PRIOR YR
BATCH
OUANITY
CLAIMS OF 50 PER
BATCH
PLACE
FOLDERS
IN FRONT
END AREA
I ~
i
i
CLAIMS FLOW CHART
1-39'
BATCH
FOLDER
OBTAINED
CLIM SEPARATED
BY PAT! NT
ENIAL ELIGIBLE ?
LETTER
j GENIAL
LETTER PRE-EXISTING ? ADD INFO
T R
C.O B. ? ADD INFO
LETTER
SUBROGATION ? o ADD INFO
LETTER
DENIAL WORKER'S COMP. ?
LETTER
ADDITIONAL INFO. ? ADD INFO
LETTEN
INE CHARGE ITEMS
NI COVERED
CONT NEXT PAGE
1
CLAIM FLOW CHART
PAGE 2
1-40
COVERED CHARGE
ITEM
DATA
ENTRY
SYSTEM
I EDITS
CLAIM
ON-LINE
, I
1 SYSTEM
ADDS
CLAIM TO
BATCH
SYSTEM
ADJUDICATES
CLAIM
i
PEND LETTERS ED B. CHECKS
REPORT
~l
4
PENDED CLAIMS
1-41
CLAIM PENDEO
FOR ADDITIONAL
I NFO-COB,REFUND
SUBROGATION
t 15 DAYS UO~ 2ND
LETTER
GENERATED
30 DAYS
INFO 3TDLETTER
RECEIVED GENERATED
ACTIVATE
CLAIMS 45 DAYS
PROCESS INFO CLOSE
RECEIVED FILE
{ ES IETTE
i „
I
f
F
SUBROGATION/'THIRD PARTY LIABILITY
1-42
SUBROGATION LIEN
FORM COMPLETED
AND RETURNED TO
MAIL ROOM
LIEN FORM
TO CLAIMS
PROCESSOR
SUBROGATION =ABUL I i
MAIL COPIES OF LIEN AND
CLAIM TO
CLIENT ATTORNEY
SYSTEM
I NOTED
SUBROGATION
CLAIM FLAG
TO TRACK 1`07
SUBROGATION
i
' SYSTEM ADJUDICATES COMPLETE CLAIMS
FOR BENEFITS LISTING PROVIDED TO
ATTORNEY AT SETTLEMENT
7
t
I
ATTACHMENT IV
OFF-SITE DISASTER STORAGE PROCEDURES
The purpose of off-site storage is to provide for Coordinated Benefits Systems a secure location
for the computer data which would be used to recreate the operating systems, batch applications,
screen program, and data fifes in the event of a major catastrophe at the central computer site,
The off-site storage is located at One City Boulevard West, Orange, California in the Bank of
America Tower basement,
The environment is fire and humidity-proof with sufficient space for storage of 1,000 tapes,
program listings, and documentation.
THE PROCEDURE FOR STORING DATA OFF-SITE IS AS FOLLOWS:
Three generations of data file backups are maintained at the off-site storage facility by transporting
the latest generadon of data file backup tapes to the facility after the nightly backup is run.
The oldest (Fourth) generation of apes is retrieved from the off-site facility to be used as scratch
upes for future backups.
Two ggenerations of system disk backups an also maintained it the off-site facility using the
procodum described above, with a new generation being created on a monthly basis.
Current program listings and system, documentation tae also stored at the off-site facility, These
am maintained on an as-needed basis. Using the backup tapes, the system and user disks can be
it
re-loaded and fully recovered from the latest generation of upes.
The number of transactions lost in the event of a disaster would be limited to those transactions
made since the previous night's backup.
I
i
E
I
i
ii
ATTACHMENT V
RECOVERY IN THE EVENT OF POWER OUTAGES
The CBS claims pprocessing system includes an automatic auditing pro-educe for each transac don
involving the clatras database files. When an update, add or deletion of a claims record occurs,
this transaction Is immediately recorded on a special audit file which resides on a different disk
pack than the claims database files.
In the event of a power outage, voltage drop, or any interruption that causes a system: halt during
the nlghdy batch processing of the claims database, the database may be fully recovered using the
audit (files. The CPU and disk drives are first brought back on line; then a database recovery
routine is Wtiated, which uses the transactions recorded on the audit fifes to restora the claims files
to their original state before the nightlyy pprocessing began. /titer recovery, the nightly processing
may be restarted from the beginning 7?e system will not allow a re-run of the nightly processing
(or any other activity against the claims database) after & system Interrupt, until the database hs
been fully recovered.
i
~ I
I
J~
I
{
I
i
i
S
CM'OF DENTON ATTACIL'1fEN7 VI
RE VIEW OF DELTA PLAN
SECTION 125 PLAN DOMfENl'S
I. SECTION 125 PLAN DOMIENT REVIEW
Article I • jaLrQdpajM
P.1.1 Purpose of Plan
The purpose of the plan as stated does not meet Section 125 criteria. The choice
of benefit must be betneen at least one taxable and one non-taxable benefit.
Article IV • Contribjtiona
P.4.2 Participant Contributions
The tenas "aplikaNe suyplemen or constituent plan" are not defined. These
plans should be specifically named to avoid confusion.
P.4.3 Change or Discontinuance of Participant Contributions -
-There is no mention orprot%xtion of COBRA rights. iVe suggest the City modify
this paragraph to reflect employees rights under COBRA
Article 'V1 • Amendment and TerminariQn o! Plan
This paragraph should be amended to state that the amendment or termination of the
plan shall not effect past claims.
Article VII
i ~issellaneous Provisions
E
i P.7.2 Limitation of Rights
Should be amended to provide for a non•guamntee oremployment.
The following contractual issues wtre not stated:
A severability clause.
A titles and headings clause.
A %ords used" clause.
A statement that the Plan Is MI an ERISAPlan.
A statement that the plan/benefits are for the exclusive benefit of participants
and Intended to be permanent.
An anti-alienation clause.
A claims procedural/review process.
II
1
1
I
Page Two
Missing Definitions
Based upon our review, the following definitions were found to be missing.
Plan Anni~xrsary Date
Dependent
Eligible employee or covered employee
- H. SECTION 125 DEPENDENT CARE PLAN DOCUMENT
Article II j2 niTjpns
P 2.6 The definition of the Plan is not current. Qualified dependent is under
age 13.
Article IV Election to Receive Depcndent Care Assistance
P. 4.2 Maximum Dependent Care Assistance
Part C • We suggest that this paragraph be amended to include (or $2,500
in the case of the married individual filing separately).
Article V - Dependent Chre Assistance Accounts
i
P.5.3 Debiting of Accounts
Amended to reflect new regulations. The (first in, first out) approach will not
satisfy the risk shifting requirements as per the recent regulations.
~I
Article Vlli • Admi7LqLaflo
i
P.S.1 Plan Ad.-niniserator
We mould like to note that the agreement between the (qty or Denton and ERAC
provides that benefit determinations reside with ERAC. As a result, ERAC has
the tdtD tary responsibility for administering this plan. This is unusual for an
emploto enable the claims administrator the fiduciary responsibility. If the
~---1 Clip oenton desires ERAC to have fiduciary responsibili , then the Cafeteria
Plans d other Plans should delegate fiduciary status to ERAC and notify the
employees.
111. CITY OF DENTON MEDICAL REINIBURSEMENT PLAN
The general notes as made for the dependent care Flan document also pertain to the
medical reimbursement plan document.
I
3
e
1
1 ti 1 1 1 n e c r Q
' L 1 1 ~ ~ ' ~ 1 • ; ~ 1 ~ 1 Itl 1 ~ 1 ~ : ~ 1 11~ 1 ~ . Q 1 ~ ' 111 1 y . ~ 1 . ..Oi .
1 C 1 . 1 1 NN 1
w 1 ~ ; ' ~ ; ~ • ' 1~ r L '111 ' FI ; ; s, : sQ ; o ; ' : '
v 1 (sS(~ ; ~c1 1 1 y~ ; : S : ' MMM ' 8 : ~ • 1 r 1 71 . I M I j 1 ~ ; 1 ~ : ;
I T \ i ; 111 ~ 1 y ; : qy ; : j ~ I € ; ' 1 111 1 ff1111 I I . 111011 1 ~ . 1 1 1
V 44
; ; ; : o; 1 1 1 1 1 . ;
1 1 I ; ; ; ; ; ; . I 1 r 1 ; 1
1 ; 1 I 1 1 ; r 1 ' ' : • ' 1 1
+Ip;.p;p;NrN;N P O~PIY N;NIN; ;N: iN;rIN;N 1 ~
I p I .p 1 p 1 p 1 p p p I p p. p 1 p I p 1 ; I. 1 1 ; n' ~
p' 8: 8 p
. 1 ; 1 1 I 1 I 1 ; : ' : I 1 1 ~
; ~ 1 1 ; 1 I ; : ' ~ 1 ♦ 1 ; I ; T 1 7'
I I ; 1 1 1 N 1 ; y.
1 ; 1 ; 1 ; 1 I I ; 1 • i I
i +INr . ;NI pi IJI INiN;r:r;N~r ; i
, ig'gi_}_}-}8}~:8}~}8{8{g{8{8{g{g{8{8{g}gig ._.-1
1 : 1 1 . 1 1 I ; : 1 1 ; . I 1 . I 1 I 1 ` P y
. ; 1 1 I ; 1 I 1 1 1 ; . I ; 1 . . 1 1 ; Q: M:
1 1 J11 1^; . I I . 1 111 1 1 ; ' N: r: 1 . I 1 I
p 1 I o 1 N 1 N. O~ i 1 P' O i o i N I N 1 N 1+ 1 N I 1 1
I ~=}g=g}8}~}g}g}S{8~gi8i8i8~gi:.~g~8~g18~g?g S-?~ ~
I 1 ; 1 1 . I . : 1 r : 1 I . 1 I I 1 ;
1 1 1 1 ; 1 . 1 . . 1 1 . 1 1 . I 1 I 1 1
I : 1 I I I 1 1 1 1 I . ; ; . ; 1 1 ; m l
I . ; ; I 1 ; I 1 . ; I I . 1 1 1 . 111M~~11111 1 I
. N 1 r I 1 ' 1+ 1 I r I J I M; J l~♦ J;+ 1 r I r 1 r; r. r 1 I J I 1 1
1 I 1 1 I . I 1. . 1 ; 1 I 1 1 . I 1 ; 1
~ . g 1 g 1 1 1 1 . . I 1 .
1 1 . . . : ; I I I 1 I 1 , I 1 , t 1
I 1 ; I 1 . I I 1 1 I • 1 1 I I 1 . : :
I I ; 1 I I . 1 . . • I . . 1 1 1 I 1 1 . ,
1 ; I I I . . 1 . ; I I 1 . 1 I I 1 e I h 1
I I 1 1 11Vy I . 1 1 1 : ♦ ~~..II 1 ; I 1 1 1 1 I o. 'J .
I . • . . 1 . 1 . . . 1 . I . I . r I . I . 1 . . . 1 . . . r . I . I . 1 . . . . I I
1 1 1 1 : ; 1 I 1 1 I 1 1 1 . 1 I I I 1 ;
1 I 1 I 1 1 . 1 1 ; 1 I 1 1 1 I ,
I I 1 I . 1 ~ I 1 ; 1 1 ;
1 1 ♦ ♦ 1 I 1 I 1 ; 1 1 1 1 I 1 . : : : : YI ; ;
. I • I 1 1 r I I N: 1 1 r 1 . r f 1 1 r I r 1+. 1 1 I .
1 I . I 1 1• 1 I. . I . 1. I I I 1 1 1 1• . . 1 1 f
: . 1 1 1 I I 1 I I . 1 . I 1
1 1 1 ; 1 1 ; I . 1 1 I 1 1 . M
1 I 1 1 I ; I 1 . 1 1 1 ; I I . : : : ; '
, . I 1 I . 1 1 1 1 I 1 1 . 1 1 I I . I I i r'1
• I 1 I ~Ny • 1 1 1 I I 1 I . I 1 1 . I I 1 r . ;
pi
pi pi
:N;N ' I
1 . I . . . 1 . 1 I . 1 . I . 1 . . • 1 ♦ I . I . . 1 1 . 1 . I . I . 1 . I . ; 1
.
i
I
'I
I
1
k
^ i I r 1 1 a 1 0 1 ~ 1 71 w 1 71 ; Y I D I V 1 f1 1 N I N. 1• 1 1 1~ 1
~ 1 1 1 ; 1 1 1 : 1 ■ 1 f I i I 1 1 1 1~ 1 •'1 I r i •
1 H 1 1 1 1 ; 1 = 1
1 SC 1 1 1 sw ^ I ; ; •j;
y ; r ♦ . 1 1 n' 1 1 RI 1 1 1 ; 1' I•I ; I 1 1 1
w < I 1 1 ; 1• I ~~~1111 ; r 1 1 I f) ; ; H /11 ; Irl 1 1 .1 N 1 1
Cce r 1 , ; ; , r ; , ; 1 s i H y 1 I1 n I ; 1 1
1 N 1 1 ' 1 1~ 1 e 1 ~r 1 r 1 1 4 1 O 1 1x11 1 1
I 1 ; o• 1 • I I 1 QC 1 Yi : I 1 ; [tom • i • ; 1 I 1
y ' I e; 1~ t• S 1 I I I = 1 ; I I 1 r r; A l 1 •
I S • y 1~ 1 1 yD; 1 H 1 ; 1~ 1 1 rr ~ • 1 1 1
4; e;~ 1 N ~ e T. /~'J . r 111 I 1~1 1 ~
~i[ 1 H 1 c 1 " 1 r I N N; 1♦1 : : i 1°~ i i
I A 1 M 1 1 ; yI 1 1 1 ; 1 H ; ' 1 n; ;
I is 1.; 1 1 1 I S Al 1 ; r 1 : t 1 . 1_; 1 N • 111 1 ,
1 1 r ~ 1 ; 1 1 : 1 ♦ 1. 1 O; ; 1 r I ;
1 1 1 1 1 • 1 • . 1 1 I I I • 1 I 1 I
i • • 1 • I • I I 1 1 I 1 1 I 1
: : i ~ 1 • I 1 1 r 1 1 1 1 ; I 1 1 :
1 • 1 I 1 1 1 1 I • 1 . 1 1 , 1 1
. 1 I ♦ 1 1 ♦ i ,
1 1 1 ~ ~ ~ : 1 I ~ p t
1 ; 1 ♦ 1 1 1 w i 1 ; ; ; 1 ; M 1
i ; w 1 J 1 : yy11 i i V' ; •
lrid p1~ NrV.hlN1W 0.;b b tI~.YIN.d;V'01rIP ;r
1 r ; ; ; . r 1 I ~ 1 ' ;
r . 1 ; 1 ; I 1 K 1
, 1 ; 1 r ; 1 1 ; ; N' R
1 ; 1 I • ♦ ; .J 1 1 1 ; 1 ; 1 ♦ 1
; N 1 T . 1 VI I V I J• ♦ J O 1 ; ; w 1 W N; J 1 J 1 I N 1 J 1 ; 1
1 ; 1 1 I I • • I 1 e ~1 1 ; I ; ; 1 1 8 1 1 C p
8 1 8 i 8: O i• I O 1 8 1 8 i 8} f- 6. - 1 ' E I•e
8 1 8 1. 18:8;81
olo- 1 ; 1 ; r I 1 I I 1 r I • 1 ; 1 1 i 1 ; S I WO~7r i1
' I 1 1 r • 1 I 1 ; • 1 1 ; • 1 i I ; is
1 • ; • . 1 ; 1 r 1 I . 1 r I 1 ; ' ~
1 1 r 1 1 ; ; 1 1 1 1 1 ; e ; • H
1 ; 1 1 • , 1 1 • r 1 ; ♦ ; I 1 1 ; O 1~ 1 i
1 1 1 1 1 1 ; 1 ♦ pp 1 1 1 ~~11 1 • 1 1 r o 1 J~
L, 0V;E1
88:8~8i8~8i8i8i8j8i8~8i8j8~Ei8i8i8j8j8~f
1 . t-. 1 1 I
1 ; 1 . , I I 1 ; 1 1 ; 1 1 1 I r 1 . I 1 1
1 1 ; . , ; I I 1 . 1 1 I . 1 ; 1 1 : 1
I , 1 . 1 I ; ; 1 r 1 ~ 1 1 1 . I 1 I . 1
1 . I 1 I 1 I ; I 1 . 1< 1
; ; ; ' : : : ~ 1 r I , I I I ; 1 I 1 : • 111 1
I 1 I ~ 1 . I 1 ; I 1 I ; 1 ; 1 1 1 N 1
r I I 1 ; I ~ 1 . 1 1 • r I 1 ; 1 1 1 :
W ; W
;8i6=8: sigig: }g}g}_i-{=}g{=}={~{=}~-t=--}-}-i
1 1 . , 1 r ; 1 I I 1 , ~ 1 I I 1 1 1 1 I . 1
1 1 . • 1 . 1 1 I 1 ; ~ I r 1 1 • . ; 1 1 1 I
I : : : . : . . : . . I I 1 I • 1 e 1 I
1 1 I I 1 1 1 1 r p. I I . I . 1 ; I I 1 • 0 1 1
1. 1. I. I. I. I• I 1 1 1. 1
Ri8i8ig}s{g;s}s p sib}8}8}8t8}8{8}g}82g}$
I 1 1 1 . 1 I 1 I 1 ; 1 I 1 1 1
. ~ . . : r . I I 1 1 I I 1 1 I 1 ~ I I I. 1
1 1 I 1 . . 1 I I 1 1 • 1 ; I 1 I ♦ 1 1 I 1 ~ 1
1 1 1 I • 1 1 r 1 1 1 1 I 1 1 1 1 1 1<
1 1 1 1 1 1 1 1 1 1 1 1 1 1 r I • 1 1 1 1 M 1 I
• 1 : 1 1 1 I 1 • r 1 . 1 1 1 1 1 r I 1 1 1 N 1 1
♦ 1 1 1 1 I • . 1 • , 1 1 • 1 1 1 I 1 1 I • 1
1 J 1 f 1 I J I w 1 w 1 • 1~;~ 1 1±: . j. j•~: ~ • : • •
1• I 1 1 1• I 1• 1 • 1
:g1 . r• '8'918:• . 18181 1Or .810181
I 1 1 1 1 • . 1 I I I 1 1 1 . 1 , I . 1 1 I 1
I 1 I 1 r ♦ 1 I 1 1 1 1 1 . 1 1 1 1 1 I 1 . N
1 I 1 ; 1 . . 1 . 1 1 1 1 1 I I 1 1 1 1~ 1
1 I I 1 . 1 I 1 ; I . ♦ ; I 1 I I . 1 1 ; s
1
it
IIr!
j
i~
a
i .
t
{~'1 : C ; C . C . 1 . ! . C . ~ . C I c 1 C N 1111 1 Irl 1 1 111 1 fll r fl1 . ~ . . C 1 '
iiO 1 V>1 i• Y>1 1 ~yr11 1 1y11I s; S• 1 s ~ y 1 e I r; ; 888 1 I r rr. 1 2 1 1 :
1 y, i c' C• H l y H y: ; N A I i11 ; 111 , 1 III 1111 : 111 1 1 1= 1 1
y 111 J IT. 1T0 • ~1 1 T ; Irl r T 1 1 T ; P1 1 A a ; 1 1 ~ 1 tl ~ . ` . ~ ; 1 1
~ 111 ; w• m 1 1 A A w r A; fll l f• 111 ; L1 1 ~I r 1 1 ~1 : I 1 _N 1 1
: C 1 F 1 C 1 y• ` r .V 1 : 1 ; • I I : I K 1
1 1 • 1 1 ~ ; ; ~ : . ~ I C 1 ; ~ ' 111 ; 1 ("1 1 A 1 A I ; ; ~ 1 ;
; : ~ ; 111 1 1 1 : 1 , ; , • O . > 1 1 ; 1
V 1~ 1 1 1 ; (1 1 111 s 1 a O 1 1 1 : ;
• ; n 1 • . w 1 M; 1 I 'j ; 1 . 1 1 ; 1 1 1
I 1 1~ 1 .i 1 ; 1 y i 1 ; ; 1 1 1 y~ 1 1
1 1 ~ 1 ; ~ : r 1 ; 111 ; 1 I ; H I 1 ..1 : I1 ; •
• 1 1 }I. 1 1 1 1 F 1 ' : : 1 1 1 III • 1
: : 1 1 O 1 1 1 ; N I : 1 I • • ; 1 w 1 ..1 1~ 1
1 1 1 ; I 1 I wn I F 1 M; ..1 I I I 1 ; a ' : y i : :
e , 1 , ~xS 1 O 1 r : ; 1 e 1 1 I 1
1 A r ; 1 > 1 ; ; C I y 1 : I ; 1 I ; 1 1 1
1 a I ; 1 1 1 I 1 ; ; ; 1; ; ;
m ; ; 1 e : : . 1 III • 1
I • I I`; 1 1 1 ; r • I a 1 r
' 1 : . . 1 1 I I I 1 1 I 1 I 1
: : 1 1 . . 1 I I : 1 I 1 : I 1
: I I 1 1 ; : 1 1 1 1 I
' i : 1 1 1 I 1 I : • 1 I I I
: : ♦ : 1 ; ; I : 1 I ; 1
N, Iy r r 1 : ; ;p
~y:4~W:O;C:N~P;N;~;N:r;J~J:V:P;N~I•r 19r
.S8'888°8'8'8'8:8'818:8'8 8'8'8'8 B 818
I : 1 I ; : : I I ; I I . 1 : r
r 1 . 1 : : ; 1 I ; 1 I I I ; l a
; 1 ; W I N r 1 ,/I I J; r J r r i 4 1 N~ I N b N I W ~ ; 1
' : : : 1 r 1 r I I ; 1 1 : 1 1 y
: . I
' ; : 1 1 e a o 1 p 1 1 e 1 p 1 I p 1 p e 1 1
f
~ 8 I Q 1 O r• • a p I O' 1 p 1. 1 p O:• ♦ 8:~ 1 8 1 8:9
1 : ; 1 r r 1 I 1 ' I r I : : 1 I 1 1 : >
: 1 1 1 : I : ' : r ; 1 1 le:c: >ly
1 1 1 1 1 1 1 1 • v J
1 1i. 1 1 1 ; ;
1~ ; 1~I ; 1 ; J♦ 1 W 1 ; 1 1
I ; : • rI .11 J 1 ~J N
W W 11 8 N I P 1 IJ O N; ; I .I 1 V I V N N I N: •Q 1 T 1 1
1 1 . 1 1 I 1 I 1 . ; : : 1 1 ; 1 1 w;
1 r . 1 1 I 1 1 . 1 : I 1 1 e
18:8 8 8 8:818:81F 8:8r81818:8j8j818~8~8 1_;i 8
1 1 ; 1 ; 1 . 1 ; 1 1 1 1 1 H
i 1 ; 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I
: ; ; • 1 1 I 1 1 I 1 1 1 • 1 1 1 1 1 1 1 1 1
f 1 • 1 1 1 1 I 1 1 ; 1 1 1 ; 1 I 1 I 1 1
• ; 1 1 • 1 1 1 ; 1 1 1 1 : ; 1 1 1 1 1~ 1 1
f 1 1 1 1 1 1 ; ; 1 ; 1 1 1 1 1 1 1 1 1
1 ; ; 1 1 1 1 I 1 1 ♦ 1 1 1 1 1 1„; 1
1 1 1 ; I 1 1 ♦ ; I • r 1 ; 1 1 1 I 1
1 1 1 J 1 J 1 J • r 1 J I J 1 J 1 • 1 r 1 J 1 1 VI J 1 r . J 1 1 r
1 1 1 1 ; 1 • 1 1 1 1 I • 1 1 1 1 1 1 1 1 M I
1 1 1 1 1 1 1 1 • • 1 1 1 1 1 • • 1 1 1 1
I 1 1 1 1 1 1 1 1 . . I I 1 1 I f . • 1 1 I 1
1 1 1 1 1 ; 1 . 1 1 . I 1 1 1 1 I f ; . . I I
1 : 1 11yy 1 1 . ~N.I I INy I : ~ I 1 1 1 1 I 1 yy. . 1
4 : W : P N : I• : N : M : bi : O : W : I• : N : O r Tbb
1 r♦ 1 1 1 1 1 1 I 1 1 1 1 1
~85gigsgi8i858Ss+g5g5858Sgs8+s5g5gSgsgs85s
1 1 1 1 1 1 1 1 1 1 . 1 ; 1 1 . . . I f 1
1 1 ; 1 1 1 1 1 I 1 1 1 1 1 . ; • • 1
I I 1 1 1 1 1 1 1 1 1 1 I ; 1 . • . 1 1 1 ~ 1
1 1 1 I f 1 1 1 1 1 1 1 1 • 1 1 1 . r Yr
I 1 1 1 1 1 1 I 1 r 1 1 1 I I ; . I 1 1 I • 1
1 1 I I 1 I 1 1 . r I 1 1 1 1 I : J 1 I 1 1 • I
1 I 1 . 1 1 1 1 . I . 1 1 1 1 ; 1 I I I . 1 : 1 1
1 I . 1 1 I 1 • I 1 1 1 1 . 1 1 1 1 I I 1 I 1
r I 1 r 1 1 1 . I 1 1 1 1 1 1 I 1 1 r 1 1 1 r H
1 1 r f I 1 1 1 1 1 1 ; 1 f • 1 1 I 1 i 1 1 Iq •
1 1 • 1 I • I 1 ; 1 1 1 1 ; 1 1 1 I 1 1 1~ 1
I 1 1 I 1 1 1 1 1 1 1 1 1 1 1 I 1 1 I •
X8;8:8:8:8:8.8:8:8:8:8:8:8:8:8:8:8:8:8:8:8
i
I
i
i
I
1
' C
a
1 ,
1 y 1 1 1~ 1 j 1111 1 1
1 ~i1Ng1 ,
1 ` 1 ; 1 ; 1
1 1 1 1 1
1 ~ I T•~ 1 1~ 1
1 1 1 1 ; • 1
1 : : 1 1 N 1 ; 1
: • 1 1 ; m ; • 1
;
1 1 ; ~ 1 1 • • 1
1 1
' 1 1 1 ' . 1 ; 1 1
1 • . 1 1 1 ;
1 1 1 ; 1 1 1
n
}8:g:8
1 ~ l' 1
' 1 ' 1 ; • 1 1 ; 1 1
' : ; 1 1 1 1 1 111 1 I.rl
i y ~yII i 1 1 1 ; N 1 1
' r I 1 • 1 ; 1 ; ; •
i O. O e 1 . O 1 1 1 1 1 p
1 ; r
I 1 1 1 1 ; • 1 6 1 s tl
I i 1 u: 1 • 1 I 1 1 1~
t I `S{8}8}s~8f8}8f8
1 1 1 1 1 . • 1 1 : ;
. D 1 1 1 1 1 . 1 1 1
' , O; g l O 1 1 1 1 . . 1 1
1 1 1 . 1 1 1 1 1 1 1
1 I 1 • 1 1
~ 1 1 1 . 1 1 I 1 ; ; ;
1 1 1 1 1 1
• !y/ 1 1 1 1 ~/y1 1 I 1 ; ; n;
ig}g}gig?g}g}g}~ i-;~
1 • 1 1 1 1 1 1
1 1 1 1 1 1 . 1
1 1 1 1 1 . 1 1 1
1 1 I 1 1 , 1 1 (11 1, ~
; ~Ny : ; ; ; ; 1 . 1 YYII 1 1
I M I r l 1 1 ; ; ; : ; ;
r~ 1 , 1 1 1
i 1 • 1 ; • 1 1 1 ; y ; 1{'y
i 1 • I • 1 1 1 1 p 1 H
. 1 • I V• 1 1 . J 1~ 1
1
I k
I ,
1
I
E
I
I
~ ~,Yyry n.ra..w~
ti M N y
~ M M
i~ N M tl
~ ~ ' M M G
1 u % u M
M M
N % r'1 Cr1 Cn x !R u !n % a 's'I rl r% Z M t,
N B B H H S - Y M H 9 B 8 C V :t S M rJ b b b 4 C O d ! % 9 b 9
Vt O t,.. 0 0 0 p .Z r w rv r.. F- r- ..1 I C%
y •.I
N t 2 -7 ty rr r k -9 T IC ✓ O A
1 P, w 0 U r7 ,•r V,, M r x R' C,
n M
m 7 o ° %
p %-rncn
n 0 w. O O A J M P C %
u G 1 % ~ G U 7 0 M
Lr r r. 3 I Y CL V., M
V. oo M r 1 L' M
EP tq 0 C7, Po 'A
C C Ct L T• C O
:7-
• Y IJ r rn Id 1 M _ - I:. it rn M \ Q' w L .r
_ Y
v,
n
zz~
7. 'Ot M TJ 'f. k
j V f O M 7, 4 M cn f. M
-1 'z il
it
M
{ H. ep ur m M •i. t. IJ O a, 77
y w
C r) co Vt C'r A M to 0 1 'S M
to CO
A Y N t4A 11
0 1/t x 1 M o' tr W 0 1 r+ %
M
i p (T -4 d. CD N r1 M Ct -1 .L. ~7 l-y rf Cy w
% S M
M
O N M
(A 0 4A k~ of
r V %
O Cd n -.1 U+ ID M Oc+ ~J Cn b F k
0 F•u[,n Vt0 Mto 0.•CA U
K 1 M 1 N %
fi n r1 M n of
0 %
(M :r CD H % ~ M 7 w
M t- w
U5 L' w I J'. na. %
OL V~ CO U, 'D
M J CJ w
o, N Vt U.
r+ r+ _ ~ ie u %
% M
w %
r„t rl % L` r• ri 10
M
N M M ,r Vr Cn M
O ~ C't N N A to V. o
V
I~ Lt C M G` t O ~O ID M r!
ID p A
tJ ~ U. VI M T O Ct %
M ~ M
M
n to n r1 %
Y 7' M r s
\ 91 r' M N @ M
N JI + r n M
-7 r0 lu, 7 0 •9 N Iw1 `•1 v w
M r+r+rt M
i/ NN1 l
I
f ~I
I
i
I
a
i
Ol N « »
\ « r N
1~ k N N
r-+ N Y N
\ k N N
CC N « N
to M « «
k « »
L « « N
n.mMM r-'n k iT1 M m O ^ VIM N M(+'.9 9 19 Cti O Y
n M
® B g 9 C G k a 9 B c C U, p 5 O N
L t7 t7bb n.s NL btZI 7 n v. C7 K^3b i`t V:
r"' n+ I"•' It b K r✓ H I 'S C" « ~ 'C \ Y
0 L 0 O 0 O M
0 6 0 0 a x N 0 0 0 0 O a 0
CD to I•' N O r r., 7I «
~t S ,t T r•• S N Z E 10 1 T
« Z T T G tl x
m N
!t T ,t T M K fp 1 10 !D O « T I'D
T ti O M
T V M «
a rcro cn «>P P o «ra Yc w=
'+1 n V7 7' « 's'7 n cn H .•O-a X 'r; C7 I n N V M
m? b fa h k C n C p g V
B O rt O K
r O « G T :7 !1 N O ri. y k
N « '1 1 ^C
n. I t:l N 0. f r, 7 r N
,U T 'l. N ..D T a s x N v' ! N
n n « - w N _ n N
di N dJ to c N CJ «
^ \ « 1 ~ " T N \ r'j N
' 1 rJ N 1: O Ll N C v. N
n « ~nco:. N c- N
y % C-~ t0 N I r N
hl N U 't :.a rn N
(q U Vt (n rn .n Ln All r) 0. > C N to W !n !n O % Q tt'
to t4 :7 C r
CC.
1 « TI c N c' N Cn ^I
U to U PI a N U d toa O {1 N !n Cn
Fq ti «
J. N t: U x Z, C « h_ T fl C N r•~ -i tj j
C: Or, W f) k CJ 0 O V, U LC -1 U U N r- .~-I r'•
CA N r* O o o r N C•CI, t:l c: r.
44 >
0000 rD «C000 \ ^ N O00 ^ - t N Y C1
0000 ID U «OC O-D NU 1 N 00 CO T ! r- N G7
n c K c: a1 0 « - s k
U C O « to O » C' " (J « .b^1,
I-, H t 7 O « U N x '7 O M Y to U .'TJ y O% k O
J- ell CD U h K i. Vt I.J U .b Y N C'~ 'A U S ry N 't1
U J r• O N ID O « VI -t O rr ti C: ^ N C~ , t 0 O O « C
ID r G « r C C U A tr C O N rn
G
w N t• « O, ~t O S r- r v N OI 1 L O N r O « Y
O ~1 U 0 1 k 0 ~t 0 0 I N o -1 4 0 « C'
O k 0
O «
M « M N 7 M
U N U 7 I « C I k O «
I N
tJ r'+ N 0 '1. « N U N O i, 'L N N U n
to 1 Co •1 rt 0 O « c J. C N ti O N to N F+ t: N '7 2 O «
tL' -l L, C
J-.\ n k. I O\H «
I.\ r. A K CA. tV n W
~G N Ct O I; 7 I- IJ OI OAS r N t" aT 0 It "f N
I O C•t 0 017 r* k 0 tJ O O r7 K Ci O O O C «
IN
n « t N R+ N C: 1! «
p m K N fi M k GI m k
r+ tJ tJ ~ P7 C k .atl IN
w 9 p
.1 V N O ~ K (T Cn Ch C 'D . N N to
N
pG tJNO K ~-'oac «-tnmc~ N
N it N N d/ N « It et it dl k
k k »
N N k
K N M
« « N
« M
if
k « N
M K k
k K %
k % A
N <F N
k N N
I
i
i I
~l
i
i
li
I
I
l
t
ATTACILbfENT IX
CITY OF DENTON
MEDICAL PLAN
HOSPITAL PROPOSAL REN IEW
September 21, 1989
I. ITEM EXCLUSIVE ARRANGEMENT
A. Patient AMI HCA
Medical $500 $635
S'' a` 800/600 635
ICU/CCU 975 1,045
OB/Mother
- 1 st day* 950 1,005
- 2nd day 500 529
- Add'1 days 500 503
- Nursery 175 185
Comments;
o *If baby requires special care, a 15% discount will be in effect (AMI & MCA)
o Per diems and outppatient/ER can be increased up to 7% .per year 3-year exclusive
contract (AMI & MCA). MCA and AMI have agreed to freeze rates for one year.
o FICA will limit its exposure on per diems under its exclusive arrangement. If per
diem rates represent a discount of 25% or greater miff of billed charges, a 25%
discount will apply. AMI does not limit its exposure under its exclusive
arrangement.
o The Citycan utilize MCA Medical Center of Piano. Lewisville? and Medical Plaza
Ft. Worth) for services not avail ablest MCA Denton. The City will receive a 150/c
discount off of billed charges at these facilities.
o The AMI arrangement requires that extraordinary high cost items (items costing
11,7 $400 or more) will be billed at hospital cost as an add-on to the negotiated rate.
MCA does not have this requirement.
' I
t
t1\\
lI, QurpaTl£NT HOCp1TAt
AND ER SFRV+^rc
~ EXCLLJ~IVE ARRAN Frtcti+•*
o Diagnostic AMI KCA
Provided a fee schedule of
Procedures 13 primary procedures, 17% discount
o Outpatient Surgery
Procedures 20% discount
o ER
o Outpatient Lob dz Provided a fee schedule 1596 discount
Radiology of outpatient, lab, do See Above
radiology charges. 20%
discount off of these prices
Utilization Review Will require a monthly
meeting to discuss Not a
plan utilization requirement
OTHER SFRV,rec
AM HCA
o Diagnostic
o Chemical dependency/ Provided a fee schedule of
Services will be provided after 17% discount
physician rehab 1/1/10 (earlies) Physical rehabilitation
Services at Denton or
through HCA's other
o Plan Hospital facilities.
Utilization Statistics
(12/01/87 - 10/31/88)
- ~Pfl11jp1
Admissions
Total LOS 23 2
Average LOS i l i 9
Total Amount Paid 4.8 4•5
Amount/Day $144'000 $15,726
Amount/Admission si'297 $1,747
$6,260 $7,863
• $53,000 so
o Employee Considerations
- Directing employee 10 utilize a single facility.
h
{
1
1 ..I F.'
3 e
9nnn ' «nn 0 ^oF «n« 4 R
~ cEa~~ ~ ~ Ea~R g 5 ~ EQ~~ $ t ~F
6
k
g~
Id
~e86 e' GyGB a e r bSG3 B o'
x
5&a~ 4 § ~SEs 4 4
-Ig
$g~S e - ac's a s $ 9as5 c ;
I/ \ ~ X 8~°kS S L B~CB S 8 a G:~~ S,
R I
5 r €
:k ~ ~EE~6 8 ' SQL's $ ~ o J~e~ S
_ yy y • MM r/
s
a~ E~~s E E w~§~ E E
j `j ~ c #~eEc a 'secs s ~ # EaeE a _ E~
I, I n n r~4
~ ~ C ~~Lt S ~ ~~~5 f ~
1 E ~ 6EE~Fs s ~ 's~L's a ~ _ ~aeE a
8~«t i NJaES i
~ ~ E~ 5~~$~a s - 's~c'a s S E E&c5 s
E~ EEE~a s s c~L'a a ~ s EaaE a.
a c ES., k ~ r~§c # f
iE bEgEs a SQL's a $ Ee:~ a o00a e
E ~ EEEEa s = s~L2 g ~ s E&a?' : i~~~
a r E,~ers ~ x ~.~s E
3E aEE3x 9 a 's~:s s §&eE s
w5F q ~FBX a 3 8
Ea~cc
I
G
L
f
I
K v~
~ ~ ~ ~ ~ F ~ , A ~ M ~ ~ ~ ~ ' ~ • ~ II A p^ Y
• • ~ 4 S{j
F M
~ ~ i c xcx+er~ S ~ ~ ~
N $ a76 ~ k iVR 8 ~
xis; EQ
L E,
1 ~ ~ ~~4x axae¢r
yMy1 k
~ ~ fS K ~tRF~~ $ gr.aer I _r ~
~ l ~ ~ LttyLSti ~ :.R !
1St
y r~Kx r c ~
gii i rpxr
$ Q ~ayss~ ~ ~,"R s
rxxr 9 i a r s t 5 x&6 a~~k'sF R $ iQ
~s! s
M r
i R Sa yY1 I(br/~y}my~y~c a ay4sx~cya .r sS a i
i M O J U N $ M N I B Pt ! N R i
I r
Y~~ p p N y p i N p 0~ ± r I
` j ~ $ rC~88Et y wR 8
4 I o ~ i y
y xx r p2 Ss39 9
t r ■
RJ ~ C'vbSS 3 ~~:IBad a aR $
I d ~ ssvasS I _I ~
~9v9 G~~rSSZ ~ Gaa~'saa ~ NF S
M S S N O S+ N S S• M ' I f
j Mwd18aJ 4 ,R
I~ ~ IeZQy.1 6 S yr1 ~.11
4 y a b 0 •N O 6 i M p O G = _ I y
N &~~88d d of
NiS a SFICKC~ ~ ~ t N8
~l /
}
L
sF 5 cI3 a 4 M~ EE Q
t E a V'
~ a ? 5 a K1 a
24 *3
iii=R
A.- 4
t!!P 3,~ i ~S a rl,°es ac ~a a ~ e
i gq! ;
4 u C b w $
g~~ 8'< J i S 9 KI ~
.
i pE s s' s
6 R: 7 k ; ti
1
1
'i
i2
3
1
f
~ x F5ec g E ~E~a 9 ~
t i ~ 6##5t a ~ ~ycs : ~ 3 Eaa~' ' .
o ~
4
y~:' X ESQ.c !Sir
iE &tilt s L 'secs s 5 5dtg y
i~ t #5~a # ra~4s E # ~
i~ ~ 6~#~t a ~ lies s ~ 5 ~&a5 a
i6 ~ 6#Eit a ~ cc's a 3Eaa~ a
.E 61159 s k~ca s 6 E at? s s
II w M ~ ~~i
i6 61$19 s 1:1 s 3 316 d# s
is = EStz e E rot c :
Y
1 iE ~ ~E£5t s ~ c~ce s ~ s #&a E' s
5 F E5:L C E ExSs ~ s C
t 6~EE~s s s 6yG8 a ~ ~5t# s
Frazt x w. Z
E 6#F~t a aace a $ Edt# s :e6
4$~4
a K t5at # ~ EE3t # ~ 5 ~ a e~~9 9
E &'E#5t a k~ce a 5a~`
1 i F5-,t M E
y t M V+ t • ~
i ! 6y X 4 Q y p N C 1. Eby ff P O
i
Ifi
11\
S
r
i
rr
~ ~ Y;~
i r 3 ~;x
~ ~ _
~ ~ ~.q
a~~
~
~~~~R
~ ~ ~ ~ 4
~ ~ ~ ~ e
~ 5 ~ x
~ ~ ~ ~ e
~ ~ ~ ~ '
j ~ ~ ~ ~ _ ~
~ ~ a
~ ~ ~ ~
~ ~ ~ ~ 9 $
~ ~
~ ~ @ ~
"
~ i~ ~ ~ ~
~ ~ ~ z
I f ~ ~ i Y ~
~ ~ ~ ~ ~ E
{`--J
~
~ ''s ~ y e
~ P V b
7 ~ 9
t ~ ~ R ~
8 F
S
8 ~ ~ ° ' 4 ~
C' ~ ~ 91 ,
I
F
j
't
t
~ ~o„,,,. ,pay e ~ e
ji515 wtl~ESti ~ ~ p G13y8~~1 ~ w& 4i
z rZ
' ~ ~ ~ i] sEx6RE
~ ~ 5 GNSES~ ~ ~r~eR'~ 5 i~a s
e
p p
i
Mill 6!ssSE s isit ? i$ ~ Ctl~ss~ ~ GC~BB~! r «5i a
~ X C z 69~S6E 3i
p S C S6EY 1 p :CyB'H21 «a a i
~77s6 E=sEEE . ' R7
~ ts~88.1 ~ 8, •
r9 a ~ EE ~i
s 6 ~ G~'~fsk ! ~ I¢ ~ a,rasE w 3
!i ~ c t a~Mass
S ~ G~~ssaw ~ ~ SCy98?J G 8'
ew~'sa~ F a
s
• ~`ciiFq~ E! C Qk S"MSSE (=i
I r1 1 7 ~ v a~ S G a e r w
~ ~ "ayaHa F Nb a
I !
5 5 ~SXS p S4!
ti ~~aeBE S h~ s
Y • X ~ Y O ~ 8 ~ ' ~ I
I
5
y
• ~ : a B
1 s ~ foss ~ ~ ~ ~ ~
=i~
i M
i IC ~ 3S Y C ~ ~ !
_a ~ xlx @$ a Blss E a
` EF ~ r r ~
~ g~ x ~ x p a 4
Si ~ix~7 E~ a ~~sx E 6~ a
E
6 ~~4 ~g ~ ~ r s Fx x
v
~i~ 5 '~s E ~ p ~ fk
yeya ~'~~r E~ a bls~ E 6~ a
~ a s
~ ~ ~ ~6 X C ~ ~C
F ~ 7: 8 LIflS ~ $
' I' ~ Z' i
' 'I ~~~Ir1 ~e ~ F li ~ ~ •~j
i xl'~S a E sM E 3~~ a ~ a ~
~ ~ ~ ~
:off
E,~ ~a c ~ ER ~ a
4
~ g€~~ a b~sx E a
1 i S ~a a i~ s a :
~ S~~ a E s~ E a
~ I i
~,1 ~ z ~5 r a Er
c 5~~ ~@ a E~s~ E 6~ s
f ~
{
s'~~5 ~a ~ x e E~ ~
a w~s. ~ 5~ s
I~ G x x
i
i e
~ it K ~ ~ ~ ~ R X R g ~ ~ Re'
~~I 8 G~Sv ~ 8
V O ~ ~
~i Li ~ ~ N Yi ~ ~ 9 n
I.. ,4 M z A ~ P O i Pi i ~ 4~ ~ y r v
`
I`
r
F
~ 8 ~ t ~
a;i r a ~ a
~ a
i'~ E ~
is ~
~is z ~ $ ~
3~ ~ a i
a a
~~5 ~ x 4
~ ~ :
y~ M M M i
+ ~ a 1f
~ ~ ~ ~ R a
n ~ E s ~i
i iV
is z
i6 a ~ ~
t ~ ~ a
f
i ~3 ~ E ~
33 ~ ~ s
1
i 2 a ~
~ ~B r ~ ~ 7
i ~ ~ S ~~ia
i "'Y~
. ~
i
~ ~ 3 ~ ~ ~
$
~
M
~ E F
~1 ~ ~ a
~~~~~e
1?3 ~ ~ s ~
E k ;
~ 3 a
~ ! a,,e
x ~ ~
~ i ~ e ~ !
E ~ ~a
~ p ~
l
Ur~
I
E
1
j
r IT=
I
i
I
i
i`
h
October 3, 1989
CITY COUNCIL AGENDA ITEM
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Managers
SUBJ: CONSIDER APPROVAL OF PROPOSED WASTEWATER RATES.
RECOMMENDATION:
- The Public Utilities Board, at their meeting of September 27, 19890
recommended that the Wastewater Rates for Eating Places and Enuipment
Services be increased in proportionate increments over a three year
period, such incremental increase for the first year to be 25% and
second and third years to be left open in order to assure that cost
of service rates are achieved for these rate classes at the end of
such three year period. All other proposed wastewater rate
adjustments remain as originally proposed.
SUMMARY:
At the City Council meeting of September 19, 1989, Council approved
the electric and water rates as proposed, but deferred action on the
wastewater rates, due in part to the concern over the 40% increase in
rates for the restaurant owners and equipment services owners.
A meeting with the Restaurant Association and Staff was held Monday,
September 25, 1989, and a public (rearing conducted by the Public
Utilities Board was held September 27, 1989. Based on the testimony
provided by the representatives of the Restaurant Association and the
Input and recommendation of staff, the Board recognized that a major
factor in rate design is the amount of increase from an existing to a
new rate. After hearing testimony, the Board, at the suggestion of
- the Staff, recommended that the full cost of service rate for Eating
Places and Equipment Services be phased in over a three (3) year
period vs the previously proposed two (2) year period. The Board,
therefore, recommends to the Council that a 25% rate increase be
implemented for the Eating Places and Equipment Services rate
classes. The 25% rate increase results in a volume charge of
$1.95/1,000 gallons of effluent. This compares to the present
$1.60/1,000 gallon commercial rate, to $1.18/1,000 gallon proposed
for regular commercial customers, and $2.2011,000 gallons for the
originally proposed 40% increase. All other wastewater rates remain
unchanged. The Utilities Staff is making plans to trim the budget in
j order to accommodate the shortfall in revenues resulting from this
rate change.
A copy of the backup information provided in the agenda item of
August 29th and September 19th along with the PUB Minutes of
September 27, 1989, public Hearing are attached.
I
I ;
I ~
~~E
City Council Meeting
Page 2
PROGRMIS, DEPARTMENTS OR GROUPS AFFECTED:
Denton Municipal Utilities, Public Utilities Board, Customer Service
Department, Data Processing, Legal Department, City Council, and the
Citizens of the Community.
FISCAL IMPACT:
The total revenue for the wastewater department as a result of the
8.5% overall rate increase is $6,209,145, which is $462,457 greater
than present rates. Reducing the Eating Places and Equipment Service
rates from a 40% to a 25% increase, resulted in a $25,483 reduction
of proposed revenues.
j Respe lly Submitted,
o r r e 11 CA
,
Man ger
Prepared/Approved by,
A. F: R'e son, xecu ve rec or
Department of Utilities
- ~J Exhibit I Wastewater Rate Ordinance
11 City Council Agenda Item of August 29, 1989
III PUB Minutes of September 27, 1989 - Public Hearing
I
6515U:5-6
I
i
I
4
t
s;
2756L
NO.
AN ORDINANCE AMENDING THE SCHEDULE OF RATES FOR SEWER SERVICE;
AND PROVIDING FOR AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the Rate Schedules for sewer service as
prov a or n Chapter 25 of the Code of Ordinences, are amended
to read as follows:
I
I
SEWER RATE SCHEDULES
PAGE
S1 Residential Sewer Service 1
S1R Religious Worship Sewer Service 3
S2 Commercial/Industrial Sewer Services 5
S21 Commerical/Industrial Sewer Services 9
S3 Wholesale Sewer Treatment Service for a
Governmental Agency, Division or Subdivision 11
S4 Intragovernmental Sewer Service 13
SS Sale of Treated Sewer Effluent to Municipal
Utility Customers 15
S6 Metered Sever 16
S1 Residential Sewer Service to Users Outside
of Denton Corporate Limits 18
S8 Residential Sewer Service to Users without City
of Denton Water Service 20
S9 Commercial/Industrial Sewer Service Outside
the City of Denton Corporate Limits 22
S10 Metered Sewer Outside City Limits 24
i
i
j ,
SCHEDULE S1
RESIDENTIAL SEWER SERVICE
APPLICATION
individuallyApplicable
or service,
meteredr apasingle rtmentsfamily
or mobile residential
multi-family
facilities with less than 4 unite.
Not applicable for sub-billing or other utility billing by
~ an
service user n y event.
NET MONTHLY RATE
(1) Facility Charge $3.00/30 days
(2) Volume Charge $1,50/1,000 gallon effluent
Billing shall be based on ninety-eight (98x) percent of water
consumption but shall not exceed a maximum of twenty-five thousand
(23,004) gallons. Monthly billings for the period March through
November shall be based o:, the average monthly rate of water
consumption during the immediately prior months of December through
February, Billings for the months of December through February
shall be based on actual consumption. New residential customers who
do not have a full prior non-irrigational history (December through
February) will have a maximum bill based on ninesy-eight (98X)
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is less until a non-irrigational water
consumption history is established.
MINIMUM BILLING
i Facility Charge $3.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
' within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to met
customer's service requirements shall be provided subject to the
special facilities rider.
PAGE 1
I
k
I
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
JU days
(b) Billing for the sewer effluent shall be based on 30 days
M per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
30 days peere1~0000kgallons in
ratlo
I
I
f
~I
j~
f
E
i
PAGE 2
1
F
SCHEDULE S1R
RELIGIOUS WORSHIP SEWER SERVICE
APPLICATION
Applicable to all facilities used primarily for religious
worship and/or education ana not for residence or commercial or
industrial enterprise.
Not applicable for sub-billing or other utility billing by
service user Ln any event.
NET MONTHLY RATE
(1) Facility Charge $3.00/30 days
(2) Volume Charge $1.50/1,000 gallon effluent
Billing shall be based on ninety-eight ? 8x) percent of water
consumption but shall not exceed a maximum twenty-five thousand
(25,000) gallons. Monthly billings for the period March through
November shall be based on the av3rage monthly rate of water
consumption during the immediately prior months of December through
February. Billings for the months of DPcembesr through February
shall be based on actual consumption. New residential customers who
i do not have a full prior nos-irrigational history (December through
February) will have a maximum bill based on ninety-eight (48X)
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is less until a non-irrigational water
consumption history is established.
MINIMUM BILLING
i
$3.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance. 1
SPECIAL FACILITIES
All services which require special facilities in order to meet
customers service requirements shall be provided subject to the
special facilities rider.
j
i i
PAGE 3
i
i ~
G
P
PRORATION OF UTILITY BILLS
(e) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
N days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x CAL in rate block x RATE
JU days per 1,000 gallons in
I4 rate block
1
i
4
l
I
i i
I
3
i
I
PACE 4
f
III ,
SCHEDULE S2
COMMERCIAL AND INDUSTRIAL SEWER S3RVICE
S2) REGULAR COMMERCIAL
APPLICATION
Applicable to all commercial and industrial sewer service
users and to all sewer service users not otherwise classified under
S2A, S2B, or S2C listed herein or Schedule S21.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
{ (2) Volume Charge $1.78/1,000 gallon effluent
Billing based on eighty (SOZ) percent of monthly water
consumption.
S2A) EATING PEACES
APPLICATION
Applicable to all restaurants and food service operations
which prepare and serve food directly to customers and are
categorized by Standard Industrial Code Numbers 5812 or 5813.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
I
(2) Volume Charge $1.95/1,000 gallon effluent
Billing based on eighty (801) percent of monthly water
consumption.
S2B) EQUIPMENT SERVICES
APPLICATION
Applicable to establishments which perform washing, cleaning
or servicing of automobiles, trucks, busses or similar equipment and
are categorized by Standard Industrial Code Numbers 5541, 7549 or
7542.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
E (2) Volume Charge $1.95/1,000 gallon effluent
i
PAGE 5
f ~
i
Billing based on eighty (80x) percent of monthly water
consumption.
EXEMPTIONS
(1) Customers under the S2A rate shall be charged the S2
rate if only pre-wrapped and pre-processed foods are
served From their premises and no food processing is
performed on the premises so that only minimal organic
material is discharged to the sanitary sewer. The
exemption for the S2A class shall be determined by the
City of Denton Environmental Health Services' Food
Inspection Division.
(2) thetS2erate plus an industrial 2surchargesiflthe customer:
(a) installs a sanitary sewer wastewater discharge line; manhole an their
(b) Agrees to pay for the City to sample and analyze,
quarterly, the wastewater discharge for the
following parameters; Biochemical Oxygen Demand
(BOD), Total Suspended Solids (TSS), and Fats, Oils
and Crease (FOG), based on the actual costs plus
administrative charges; and surcharge
(c) Agrees ormula to a pay. based on
on all wastewer industrial discharged formula,
that is in excess of 250 mg/1 of BOD and TSS as
determined by the monitoring performed in Section
2(b)•
The Industrial Surcharge shell be based on the following
formula:
Cu-Vu ((Bu-2501 B + (Su-250) S))
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
is the unit
B coat p factorGfor treating one unit.
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit cost `actor for treating
one unit of SS per 1,000 gallons.
PAGE 6
i
S2C) PRETREATMENT
APPLICATION
Applicable to all commercial/ industrial customers subiect to
EPA Pretreatment criteria or such other commercial/industrial
customers that have the probability of dischargging extra strength
camay tegorihave substances in their wastewater which
wastewater on which
are
NET MONTHLY CHARGE
(1) Facility Charge $7.25/30 days
$1.90/1,000 gallon effluent
(2) Volume Charge
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
b industrial surcharge
there based won the ill efollowi g for not monthly rate an
' Cu=Vu ([Bu-2501 B + [Su-250) SD
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
B BLED per 1,000 gallons ($D.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit coat factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$7.25/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days froo date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's se ties rid a rementa shall be provided subject to the
I
PAGE 7
{
i
i
PRORATION OF UTILITY BILLS
(a) Billings for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
u ayd` s
(b) Billing for the sewer effluent shall 'as based on 30 days
er month to determine the gallon effluent to be charged
o each rate block.
Actual days in reading period x GAL in rate block x RATE
17 i 3tj Uaya per 1,000 gallons in rate
block
I
~ i
I
I '
l
E
I
I
I
I
I
i
PAGE 8
i
i
f
SCHEDULE S21
COMMERCIAL 6 INDUSTRIAL SEWER SERVICES
APPLICATION
Applicable to all major commercial and industrial sewer
service users and to all sewer service users not otherwise
classified under this ordinance whose waste is measured by a meter
dedicated to water which is returned into the wastewater collection
and treatment aystem,
Not a licable for sub-billing or other utility billing by
service user -Fn any event.
NET MONTHLY RATE.
(1) Facility Charge $7.25/30 days
(2) Volume Charge $1.78/1,000 gallon effluent
Billing based on ninety-eight (98X) pe;cent of monthly sewage
flow as measured by the wastewater discharge flow meter.
INDUSTRIAL SURCH.IRCE
In addition to the above charge for commercial and industrial,
there will be ae,ded to the net monthly rate an industrial surcharge
based on the following formula;
CuaVu ([Bu-2501 B + (Su-2501 S))
Where: Cu is the surcharge for user X,
Vu to the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
B DOD per 1,000 gallons ($0,000743) s the unit
cost factor for treating one unit
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit cost factor for
treating one unit of S.4 per 1,000 gallons.
i
1 i
i
I i
PAIGE 9
i i
i
e
}
MINIMUM BILLING
$7.25/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRO.UTION OF UTILITY BILLS
(e) Billing for the Facility charge shall be based on 12
billings annually.
i
Formula;
Actual da s in reading period x customer charge
~ ~ aye
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
f Formula:
Actual daya in rending period x GAL in rate block x RATE
J A Yti per 1,000 gallons in rate
block
I
i
PAGE 10
i
1
SCHEDULE S3
WHOLESALE SEWER TREATMENT SERVICE FOR A GOVERNMENTAL
AGENCY DIVISION OR SUBDIVISION
APPLICATION
agency Aorl subdivision which coperates corporation, a sewer cllection system nand
contracts with the City of Denton for sewer treatment service.
NET MONP LY RATE
(1) Facility Charge $125,00/30 days
(2) Volume Charge $1.95/1,000 gallon of effluent
Billing shall be based on one-hundred (1.00x) percent of actual
gallons measured by meter at one point.
14INIMUM BILLING
$125.00/30 days
INDttSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cuwvu ((Bu-2501 B + (Su-250) S))
i
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested DOD level for user X or 250 mg/1,
whichever is greater.
B HOD per 1,000 gallons ($0.000743) is the unit
coat factor for treating one unit.
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
r
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
PAGE 11
I
f
t
l
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
3 ays
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
! Formula:
Actual days in reading period x GAL in rate block x RATE
JU days per 1,000 gallons in rate
block
I~ !
I
I
PAGE 12
r
ii R J1-ra'i.~
SCHEDULE S4
INTRA-GOVERNMENTAL SEWER SERVICE
l
APPLICATION
Applicable to all City of Denton Departments and agencies for
all sewer service.
NET MONTHLY RATE
(1) Facility Charge, $7.50/30 days
(2) Volume Charge $1.60/1,000 gallon effluent
Billing shall be based on eighty (80%) percent of water
consumption,
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-2501 B + (Su-2501 S1)
E
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X. 11
Bu is the tested BOD level for user X or 250 ag/1,
whichever is greater,
I
B SOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for u8kir X or 250 mg/1,
whichever is greater.
S ($0.000751) is the unit coat factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$6.50/30 days
PAGE 13
i
i °•w.~ i w: z n
e
i
PAYMENT
Bills are due when rendered, and become past due Lf not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
i
Formula:
j
{ Actual da s in readin eriod x customer charge
ays for
30 d (b) perlmonth totdetermineetheu gallons effluents to be charged
i i P
to each rate block.
Formula:
Actual dare in readin eriod x GAL in rateblock x LnRATE
ays per 1,000 gallons rate
block
f f
i
I
PAGE 14
SCHEDULE S5
SALE OF TREATED SEWER EFFLUENT TO
MUNICIPAL UTILITY CUSTOMERS
APPLICATION
Applicable on sales of treated sewer effluent to any municipal
utility.
Not available for resale in any event.
NET MONTHLY RATE
i
(1) Facility Charge $97.00/30 days
(2) Volume Charge $ .75/1,000 gallon effluent
MINIMUM BILLING
I
i
$97.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
I
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
3 aye per 1,000 gallons in
rate block
I
PAGE 15
M
i
SCHEDULE S6
METERED SEWER
APPLICATION
Applicable to any mayor sewer service customer desiring to
meter all sewage net monthly rate effluent from a single customer
location and not otherwise classified under this ordinance.
NET MONTHLY RATE
Facility Charge $130.00/30 days
Volume Charge $ 1.90/1,000 gallon effluent
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-2501 B + (Su-250) SD
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested DOD level for user X or 250 mg11,
whichever is greater.
i B BOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for ur,er X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$130.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
i
PAGE 16
..sue w .rc:v
i'
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually,
j Formula;
Actual days in reading period x customer charge
30 aya
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
!
Formula:
i
Actual days i
-J T n reading period x CAL in rate block x RATE
ays per 1,000 gallons in rate
block
I' I
i 1
I ~
I
PACE 11
i
t
s .
SCHEDULE S7
RESIDENTIAL SEWER SERVICE TO USERS
OUTSIDE CITY OF DENTON CORPORATE LIMITS
APPLICATION
Applicable for single family residential sewer customers
individually metered apartments or mobile homes or multi-family
facilities with less than 4 units outside of the corporate limits of
the City of Denton and also receiving water from the City of Denton.
NET MONTHLY RATE
(1) Facility Charge $4.50/30 days
(2) Volume Char
~ ge $2.2511,00 gallon effluent
Billing shall be based on ninety-eight (98x) percent of water
j consumption but shall not exceed a maximum of twenty-five thousand
(25,000) gallons. Monthly billings for the period March through
November shall be based on the average monthly rate of water
consumption during the immediately prior months of December through
February. Billings for the months of December through February
shall be based on actual consumption. New residential customers who
do not have a full prior non- irrigations I history (December through
February) will have a maximum bill based on ninety-eight (98X)
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is leas until a non-irrigational water
consumption history is established.
MINIMUM BILLING
$4.50/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
1 within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
i
I
PAGE 18
EE i
1 I
i
I
I11~ MF'.bY' AA34M
1
~Fldc ay 11 L.,.i iil~
I
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
i
E Formula:
Actual days in reading period x GAL in rate block x RATE
ays per 1,000 gallons in rate
block
+I
I
I
1~-
~~1r
I
I
PAGE 19
E
I
SCHEDULE S8
RESIDENTIAL SEWER SERVICE TO USERS WITHOUT
CITY OF DENTON WATER SERVICE
APPLICATION
Applicable to all residential facilities not also receiving
metered water service from the City of Denton, including
sub-divisions, for apartments, mobile home parks, or other
residential service use►•a. The monthly charge will be based on the
maximum number of residential units in the area served during the
month times the volume and facility charges.
NET MONTHLY RATE
In Corporate Outside Corporate
Limits Limits
i
(1) Facility Charge $ 2.25/30 days $ 3.35/30 days
(2) Volume Charge $ 1.50/1,000 gals $ 2.25/1,000 gals
Volume charge will be for five thousand (5,000) gallons per
month.
{
MINIMUM BILLING
$ 9.75 per 30 days $14.60 per 30 days
per resident unit per resident unit
PAYMENT
Bills are due when rendered, and become past due if not paid
` within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
ti PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days_in_reading period x customer charge
V Gaya
a
PAGE 20
i
Ref ~'.e x..r
PrtW<mM S FS 'F ((b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
sUdays per 1,000 gallons in rate
block
j
I '
{
I
i
1
! f
i
r
I
PAGE 21
f
~ a
SCHEDULE S9
COMMERCIAL/INDUSTRIAL SEWER SERVICE
OUTSIDE CITY OF DENTON CORPORATE LIMITS
APPLICATION
Applicable to all commercial, industrial or any other facility
nut otherwise covered under this ordinance outside the corporate
limits of the City of Denton and receiving sewer service from the
City of Denton.
NET MONTHLY RATE
(1) Facility Charge $9.75/30 days
(2) Volume Charge $2.40/1,000 gallon effluent
Billing based on eighty (80X) percent of monthly water
consumption.
INDUSTRIAL SURCHARGE
I
In addition to the above charge for commercial and industrial,
there will be added co the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ([Bu-250) B + (Su-250] S))
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
1 Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
B BOD per 1,000 gallons ($0.000885) is the unit
coat factor for treating one unit.
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000894) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$9.75/30 days
PAGE 22
i
i
I
i
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customor's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
I
Actual days in reading period x customer charge
3U ad y
i
v
I
it
i
i
r
~ i
k
E
PAGE 23
i
4
SCHEDULE S10
METERED SEWER OUTSIDE CITY LIMITS
AI YLICATION
A,.plication to any sewer service customer desiring to meter
all sewage effluent from a single customer location and not
otherwise classified under this ordinance.
NET MONTHLY RATE
Facility Charge $195.00/30 days
Volume Charge $ 2.40/1,000 gallon effluent
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-2501 B + (Su-250) S1)
Where, Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/I,
whichever is greater.
B BOD per factor O for gallons treating (one units) is the unit
cost
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
S ($0.000894) is the unit cost factor for
r treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$195.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
PACE 24
i
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
i
Formula:
Actual days in reading period x pGAL in rate block x RATE
3 ays block ,000 gallons in rate
I
I
I
PAGE 25
i
i ~
4
I
SECTION Ii.
That if any section, subsection, paragraph, sentence, clause,
l phrase or word in this ordinance, or application thereof to any
person or circumstances is held invalid by any court of competent
jurisdiction, such holding shall not affect the validity of the
remaining portions of this ordinance, and the City Council of the
City of Denton, Texas, hereby declares it would have enacted such
remaining portions despite any such invalidity.
SECTION III.
That the Schedule of Rates herein adopted shall be effective,
charged and applied to the first regular billing cycle accruing on
or after October 4, 1989.
PASSED AND APPROVED this, day of , 1989•
I
KAYOR
RAY
CITY OF DENTON, TEXAS
I
ATTEST:
i
CITY OF DENTON, TEXAS
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCS, CITY ATTORNEY
CITY OF DENTON, TEXAS
BY:
I
s
a
ICI
PAGE 2b
1
~l
f
August 29, 1989
C17Y COUNCIL,
WORK SESSION ON RATES
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Manager
SUBJ: DISCUSS AND RECEIVE REPORTS ON ELECTRIC, WATER AND
WASTEWATER RATE STUDIES.
i
f-~ RECOMMENDATION:
Receive, discuss, and provide Staff input regarding subject 1
rate studies. The Public Utilities Board, at their meeting
of August 13, 1989, recommended to the City Council
approval of the proposed rates,
SUMMARY/BACKGROUND:
I
Rate Studies have been performed for the Electric, Mater
and Wastewater Departments in order to establish cost based
rates that will collect revenues commensurate with the cost
to serve the resppective customer classes. Dips Dutia,
Financial Analyst in the Utility Administration Department,
parformed the rate studies for the Water and Wastewater
Departsents with Paul 6 Rachael Reese, of Texas Water
Company, reviewing the methodology and allocation of
costs. C.H. Guernsey 8 Company, Consultants, performed the
j Electric Rate Study. Both C.H. Guernsey and Texas Water
Company representatives will be present at the Council
meeting to present the respective studies.
The 1990 Electric, Water and Wastewater Rate Studies were
presented to the Board on August 4 and August 23, 1989.
The proposed changes would result in a 1.61 or $987,491
reduction in electric rates, an 8.271 or $834,680 increase
in water rates, and an 8.51 or $480,468 increase in
wastewater rates.
The studies were teased on the 1990 budget and proposed 1990
capital expansions of the respective utilities. Billing
determinants, i.e., number of custoaers, electrical or
water/wastewater demands and volumes, are based on 1990
forecasted values.
i
k
I
i
r t
A "FIna TI CIII .analysis" of all input data was performed, and
after minor adjustments, served as the input Information
for the "Cost of Service" part of the study. Two revenue
requirement methodologies were used in the cost of service
part of the study. They were the equalized debt service
coverage ratio (DSCR) methodology, and the equalized rate
of return (ROR) on invested capital methodology,
Generally, the DSCR method is the "cash basis", which
assures that each customer class provides sufficient cash
to cover their share of the debt service. The ROR method
is the "utility", or accrual method, and assures that each
customer class provides a sufficient return on investment
to cover all expenses associated with their share of
investments in.faciiities serving their respective class.
Upon developing the revenue requirements of each customer
class, a "target revenue" was developed for each customer
class. The target revenue may differ from the cost of
service report of either the DSCR or ROR methodology when
major shifts are occurring in cost allocations and it is
deemed inappropriate to implement rate change that either
methodology may indicate is required.
In the rate design phase, the facility charge, demand
charge, volume charge, summer/winter rate differential,
volume block arrangements, etc., are developed.
In the rate study this year, the rates for the wholesale
water customers, Corinth and Lake Cities, and the wholesale
wastewater customer, Corinth, were developed on, the
"utility" basis. This was done in the manner prescribed by
the Texas Water Commission. In this method, all O8M costs
are allocated on the basis of their share of 08M costs,
which is the same as for Denton's "in City" retail
customers. However, instead of allocating debt service as
is done for retail customers, depreciation and return on
investment is allocated. To determine the asset amount
upon which depreciation and return on investment is
applied, it is necessary to first determine the wholesale
customer's utilization of Denton's facilities. The
wholesale customers utilization of Denton's facility
investment is based on their peak, relative to Denton's
peak multiplied times total facility cost for such
facilities that they use. For example, in the water rates,
- they use 5.721 of Denton's raw water lines, water plant and
water transmission lines. Water transmission lines are
considered to be all lines over 12".
The depreciation amount is their 5.721 share of the total
depreciation. The return on investment amount is 9.51
times their 3.721 of asset base. The 9.51 was derived from
the addition of Denton's overall 81 embedded interest rate
plus 1.51 which represents Denton's risk for making
investments on their behalf. All raw water furnished to
the wholesale customers was assumed to be purchased from
Dallas At 44.240/1000 gallons.
I
I
~k
~ I
t
Electric
The Electric Study was based on a 1.61 rate reduction,
which will produce total 1990 revenues of $54,756,780, with
total expenses of $53,868,000, which results in a 1.221
margin or $680,000. The rate design is based upon 27,776
customers, 751,552,000 KWH of sales, a demand of 186 MW,
and an asset base of $44,043,863.
Due to lowering costs of purchased power from TMPA, and
continued reasonably priced natural gas for the cities own
generators, an overall $887,491 rate reduction is
possible. This represents a 1.61 rate reduction.
The Cost of Service Study reflects that large industrial
customers under the present rates are carrying a greater
than their proportionate share of costs and should
therefore, receive a larger reduction in rates. Smaller
and medium sized commercial and City, County and School
district customers' are conversely not presently paying
their proportionate share, and should therefore, actually
receive a slight increase in their rates. See Exhibits 15
li I1.
Residential electric rates are to be reduced by an average
21 for small usage RI classification customers and to be
reduced by an average 1.11 for all other residential
customers. Churches will receive an average 1.41
reduction. Large industrial customers (LP) will receive an
average 141 reduction and medium sized Industrial (GP)
customers will receive an average 3.91 reduction. All
other commercial customers (GS) will receive an average
3.61 increase and City, County and School district (G1)
customers will receive a 3.S1 increase. (See Exhibit I).
The reductions and increases listed above are average
changes for the entire customer class and will vary
depending upon usage and load factor because of the fixed
facility charges and demand charge factors.
! For GS classification commercial customers, there will be
no demand charge for the first 20 KM of demand. However,
the energyr charge will be increased to 6.S6~f/KWH vs the
normal 3.5OKWH for the first 2500 KWH. All KWH's over
2S00 would be 3.S!/FWH. This change will greatly help
small customers who have been concerned about paying a
demand charge but use only very small amounts of energy.
A typical small residential customer usirl 500 KWH per
month would experience a monthly bill reductun from $38.25
to $37.15. A typical summertime larger residential
customer using 2000 KWH per month would experience a bill
reduction from $1S7.S0 to $154.S0. In the winter time for
7S0/KWH/mo, the bill would reduce from $59,37 to $S8.81.
I
j
i
i
I
1 d y~
r
Avery small commercial customer with a small office, IUGU
square feet, and minimal air conditioning who is open S
days a week, using 10 KW of demand and 1000 KWH of energy,
will experience a reduction from $122.7S to $99.60, Their
rate per KWH would be reduced from 12.3E/KWH to l0E/KWH.
Larger usage customers using SOKW demand and 10,000 KWH/mo
(27.41 load factor) would receive a slight increase from
$938.75 to $841.50, with the rate increasing from 8.390Kwil
to 8.42E/KWH.
In addition to the standard electric rates, C.H. Guernsey
also reviewed the following rates:
1. IED - Industrial Economic Development Rate
2. TS - Thermal Storage Rate
3. TSS - Standby and Supplemental Service Rate
4, TOU - Time of Use Rates
Due to changing costs, these rates are modified slightly
from a similar study C.H. Guernsey prepared In December
1988.
The Industrial Develo meet Rate provides a SO% reduction in
demand charges or t e rst year a new or expanding
(greater than 200 KWH) industry begins use of the rate, 401
in the second year, 301 in the third year, 201 In the
fourth year, and 101 in the fifth and final year.
The Thermal Storage Rate proposed allows an' upfront
customer scent ve payment of $I5O/KW for each KW the
customer can reduce their peak demand on Denton's system.
The customer would then be required to receive service on
the Time-of-Use rate for an least five years, with the
addition of $2.50/KW added to the Time-of-Use demand charge
for those five years. Thereafter the customer would be
allowed to go on the regular floe-of-Use rate or an
applicable rate if they no longer were using their Thermal
Storage system.
The Standby and Supplemental Service Rate is for customers
who pan to install their own generation for their base
load requirements, but still need a standby electrical
supply for emergencies and a supplemental supply for
non-emergency maintenance requirements. This proposed rate
would have a $121.20/KWH/yr demand charge, payable in 12
equal monthly payments, for any KW demand occurring during
Denton 's peak hours of 1:00 and 8:00 p.m. during June,
Iuly Au ust and September. Plus, there is also a
$/7.60/KMlyr demand charge, payable in 12 equal monthly
payments, for any XW demand occurring during Genton's
non-peak hours. Energy costs would be .3j/KWH for
non-emergency energy and S.3!/KWH for emergency/on peak
k ener y, lus the normal energy costs adjustment. See
Exhi~it 11.
E
i
i
i
t
The Time-of-Use Rates reflect nearly, the
5tana,y an 770
same race as the
customers, thep rate would ebe1$10r20/KW/moo. for eon i peak iKN
usage and $4.20/KW/mo. for off peak xW, with an energy
charge of .3E/KWH, plus the energy cost adjustment. For
residential customers, the rate would be 26.10/KWH for peak
energy, 1.7E/KWH for off peak KWH, plus the normal energy
cost adjustment.
Water
The Water Study was based on a 8,171 rate increase, which
will produce total 1990 revenues of $10,932,789, with total
expenses of $10,916,5489 which results in a 1S% margin or
$16,241. The rate design is based upon 17,416 customers,
4,504,226,000 gallons of water sales, and an asset base of
$30,854,060. The Water Department would experience an
8.111 revenue shortfall, primarily due to the requirement
to meet the Lake Ray Roberts obligation without the rate
increase.
The Cost of Service Study reflects that the wholesale,
commercial, and government customers are carrying less than
their proportionate share of costs and should therefore,
receive an Increase in rates. Raw water and residential
customers need a lesser rate increase, See Exhibits IV 8 V.
Residential water rates are proposed to be increased by an
average of 5.351. Commercial customers will receive an
average 101 increase, while wholesale customers will
abovevareaavera;e changes listed
will vary depending upon usage.
A typical residential customer using 1S 000
water per month durin the summer will experienc~aalmonthly
bill increase from 133.50 to $34.50, or an increase of
$1.00. During the winter, with an average water
consumption of 7,S00 gallons, a residential customer's bill
will increase from $20.00 under the present rate, to $20.63
with the proposed rate Increase.
i
A typical commercial customer using 40,000 gallons of water
per month would experience a change in their monthly bill
from $88.00 to $9S.S0. This represents an Increase of $7.S
of an 8.521 increase.
Wastewater
The Wastewater Study is based on a 8,31 rate Increase,
which will produce total 1990 revenues of $6,327,156 with
total expenses of $6,271,578, which results In a margin of
anupon
customers SS 3512,733haallons ofeSeffluent,based
asset 7base
of $28,117,172.
I
i
I
I 1
i
t
F
y
0ithou t the rate increase, the wastewater department will
experience a revenue shortfall or $431,890, or 7,531
The Cost of Service Study indicates that residential
customers are presently paying their proportionate fair
share of the wastewater system costs and therefore, an
increase is not necessary for residential customers.
However, the study indicates that Eating Places, Equipment
Services, and Pretreatment Customers impose major demands
on the wastewater system for which present rates are not
recovering their proportionate share of the costs.
Therefore, a substantial rate increase is required for
these customers followed by lesser increases for wholesale,
regular commercial, and government customers. See Exhibits
VI 6 VII.
While t s
needa rate increase of actually 781, an ndaverage 1401 ratenincrease
is recommended as a first step in phasing in the actual
costs to this customer class. Similarly, while the
to class
wouldmbetnecessaryFacilities
an 771 increase
is recommended.
Finally, pretreatment customers will receive a 301 rate
increase, wholesale customers will receive a 24.611
increase, and government customers will receive a 3.51
increase. As mentioned above, residential customers. will
not experience a rate change. The increases listed above
I are average changes for the entire customer class and will
vary depending upon usage.
A typical commercial customer using 40,000 gallons of water
per month will experience a change in their monthly bill
from SS7.70 'to $64.21. This represents an Increase of
$6.51, or 11.181
A typical Eating Place with an average monthly consumption
of 2481320 gallon effluent will experience an increase in
their bill from $403.81 to $S$3.55, representing $149.74,
or $37.981.
Similarly, an Equipment Facility's monthly bill will
increase from $50.01 to $67.08 for an average consumption
of 27,193 gallon effluent. This represents an increase of
$17.07, or 34,131.
I
1 The reason for the major increases In Eating Places and
Equipment Services is the greater strength of wastewater i
that such customers discharge to the wastewater system and
the greater costs incurred to treat that wastewater.
Eating Places discharge large amounts of organic products
V
i
i`
d
that raises the biological 0xyien Demand IBOD) at the
wastewater treatment plant and require much more equipment,
facilities, electrical power, and chemicals to treat. A
typical Eating Place may discharge wastewater with a BOD
value of 1000 parts per million, whereas, the average home
may have a BOD value of only 180 parts per million.
Similar effects are caused by Equipment Service customers,
i.e., car washes and garages, except the major component
may be the total suspended solids and in some customers,
the BOD as a result of oil and grease being washed into the
h sanitary sewer.
After presenting the rates to the Public Utilities Board on
August 4, the PUB asked the Staff to explore optional rates
for eating establishment and equipment service customers
who have taken extensive steps to keep high strength
wastewater from entering the City's system. The staff
developed an option that would place such customers on the
regular commercial wastewater rate s $1.78/1000 gallons vs
the $1.20/1000 gals., but then have a surcharge add on (or
reduction) the same as the pretreatment customers for any
wastewater that had strengths greater or less than 250 BOD
and 250 TSS. The customer would also have to enter into a
separate agreement to pay for a quarterly test of their
wastewater strength. Each such ctstomer would also have to
build a sampling manhole. Another option that is proposed
to be handled administratively is to allow eating
establishment customers who do not process food or
discharge foodladen wastewater at their facility to remain
1 on the standard commercial rate.
FISCAL IMPACT:
f The proposed changes In rates are a 1.61 reduction in
electric, an,8.27% increase In water, and an 8.51 increase
in wastewater, which results in an Increase of .81 in total
` Utility revenues.
i k
1 Amount From To
Decrease in Elect 1.601 $867,491 $SS,436,760 $S49S499189
Increase in Mtr 8.271 (834,680 100097,498 10,9329178
Increase In Nstwtr 8.501 480 468 5,746,,688 6,235,156
Overall Change .601 $435,657 $7102809966 $71,716,b23
+ f
i
I
E
1
i
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
Denton Municipal Utilities, Public Utilities Board, Customer Service
Department Data Processing, Legal Department, City Council ana
Citizens 01 the Community.
Respec ly subm't ed,
oy acre
City anager
Prepared/Approved by,
E. Nelson, Executive Director
Department of Utilities
Exhibit I Summary of Proposed Rate Change
IE Existing vs Proposed Electric Rates
III Standby, Supplementary and Maintenance Service Rate
IV Development of Revenue Targets for Mater
V Current vs Proposed Mater Rates
j VI Development of Revenue Targets for Wastewater
VII Current vs Proposed Wastewater Rates
VIII Minutes PUB Meeting of 8/4 and 8/23/89
i
s
i,
i
649SU:1.8
i
EXrii3:T
DLNTON MUNICIPAL UTILITIES
SUWAR' Of PROPOSLO RAT[ CMANCL
FY90
(a3
Ravenw a•(b) (a) (d)
i Change
.[slating PrOPoaad.
1. R1 Raaidanttel S t
2. 22 1,474,962 1,445,0/7 •(29,173) (2.
/ Aaaidanrlal 16,712,035
18,354,722 (217,333) (1,16)
7. G! General Se
rvice
19,060,403 19,763,453 615,030 3,39
4, Cf Cerra nl teevtae frl.
5, Lf Lase fewer 21311,230 2,448,003 (100,237) (3.87)
!,66!,970
1. RY 1,3071317 (1,331,318) (14,01)
Rallgioue Worship 473,!12 iii,Zl7
7. T1 Tempo (1,185) (1.40)
i rary Service $S,632 60,132 .
1• G1 Local 3.200 9 35
Coweraaae 2,760,933
1 2,138,683 97,730 3.54
1 I 9. C2 Street Lights
720,330 332,936 12,426 3 t1
i 10, G3 SLIM Li
8hte 76,024 78,)07
ll, D1 Owit to Dare ughta 1!6 02 21683 3.33
• 178,165
22,120 14.11
1Z. AS Athtetlo Field Lta, 10,000 10,000
17. OIA7 Total D"t" 0 .00
3!,436,710 54,549,219
(887,491) (1.60)
i 1
1
1
i
i
i
I
1
9
Exhibit II
ELECTRIC RATES
EXISTING VS PROPOSED
EXISTING PROPOSED
RESIDENTIAL (RI)
FACILITY CHARGE 95.50/MONTH 56.50/40NTH
ENERGY CHARGE 4.65c/KWH 4.[3c/KWH
RESIDENTIAL (RY)
FACILITY CHARGE Sb.50/40NTH 97.50/XOSTH
ENERGY CHARGE
SUMMER - FOR 3000 KWH 5.65c/KWH 5.45c/KWH
ADDITIONAL KWH 6.15c/KWH 6.0c/KWH
WINTER - FOR 1000 KWH 5.15c/KWH 4.95c/KWH
ADDITIONAL KWH 4.650/KWH 4.45c/KWH
GENERAL SERVICE IGS)
FACILITY CHARGE s10.00/MONTH 115.00/MONTH
DEMAND Ist - SKW - 0 - - 20 KW - 0 -
ADDITIONAL KW S5.75/KW $7.00/KW
ENERGY 1ST 700 KWH 7.5c/KWH - 2,500 kuh 6.56c/kwh
ADDITIONAL KWH 3.5c/KWH 3.5o/KWH
RELIGIOUS WORSHIP IRW)
FACILITY CHARGE 110.00/MONTH 915.00/MONTH
DEMAND lot - SKW - 0 - - 20 KW - 0 -
(NO RATCHET) ADDITIONAL KW 93.76/KW 93.75/KW
ENERGY 1ST 750 KWH 7.5c/KWH 7.5c/KWH
ADDITIONAL KWH 3.25c/KWH 2.92c/KWH
LOCAL GOVERNMENT (01)
FACILITY CHARGE 910.0/MONTH slS.O/MONTH
DEMAND CHARGE 94.5/KW 56.0/KW
ENERGY CHARGE 3.250/KWH 2.98o/KWH
GENERAL PRIMARY (GP)
FACILITY CHARGE s46.0/MONTH 950.0/MONTH
DEMAND CHARGE x5.75/KW 98.0/KW
ENERGY CHARGE 3.lc/KWH 2.030/KWH
LARGE PRIMARY ILP)
FACILITY CH.IROE 145.0/MONTH 660.0/MONTH
DEMAND CHARGE 15.50/KW 59.0/KW
ENERGY CHARGE 2.95c/KWH 1.36o/KWH
ALL ABOVE RATES ALSO WOULD PAY THE PRESENT 1.9 c/KWH
ENERGY COST ADJUSTMENT ON ALL KWH USED
I I
II
I
'f
SCHEOULE ES 31-Jul-84
STANDBY. UPPLEMENTA.RY AND MAINTENANCE SERVICE 03:04 PM
APPLICATION
Applicable in all areas served by the City to customers who
(1) own and/or operate an electric power generation facility mainly
used for nonsmargency uses and which h:s a total nameplate or
effective capacity. (whichever is lesser) of fifty (50) kW or
more in parallel with the City's electri.; system for the purpose
purpose of generating power for the customer's own consumption,
and
(2) employs equipment which is compatible with the City's electric
system at the customer's delivery point and which will cause no
damage to the City's electric system or equipment or present
undue hazards to City personnel, and
(3) execute an agreement for interconnection and parallel operation
with the City.
INTERCONNECTION COSTS
The customer shall reimburse the City for any equipment or facilities required as
a result of the installtion by the customer of generation in parallel with the
City's electric. system.
I
The customer dull pay all costs of the City to extend its facilities or modify
then at the time of interconnection, or at some future time in order to permit
parallel operation of the customer's facility.
TYPE Of SERVICE
i
The City shall supply alternating current, sixty (60) cycles at the voltage and
phase of the City's electric system most available to the location of the
customer. The primary voltage customer shell own, operate and maintain all
facilities necessary to receive three phase primary voltage service and all
transformation facilities required for conversion to utilization voltage. The
City shall own, operate and mintain all tietaring facilities, either at primary or
secondary voltage, at the City's option. Where the City elects to meter at
secondary voltage, the secondary energy and on peak demand charges shall apply.
MONTHLY RATES Primary Secondary
Sery1ca Service
(i) Facilities Charge 160.00/30 days $26.00/30 days
(2) Demand Charges:
On Peak Demand 110.10/kW $10.20/kW
System Demand $ 3.50/kW $ 3.10/kW
Energy Charges:
Non Emergency Energy 1 0.0020/kWh $0.0030/kWh
Emergency Energy 1 0.0520/kWh 10.0630/kWh
i
(4) Energy Cost Adjustment Per E.C.A. Schedule
I
{
I
S
i
1 SCHEDULE ES
31-Jul-89
STANDBY, SUPPLEMENTARY AND i„AINTENANC SERVICE 03:09 PM
(Continued)
I
' MINIMUM MONTHLY StL Irn
The miminum monthly billing shall be the highest of the following:
(1) the sum of the Customer FaOilitles Charge, the On-Peak Demand
Charge and the System Demand Charge; or
(2) A charge of :1.00 per KYA of installed transformer capacity.
DETERMINATION OF ON-PEAK DEMAND
i The on-peek demand shall be the maximum kY demand supplied by the City during the
fifteen (15) minute period of maximum use during the on-peak hours as recorded by
the City's demand met;r and adjusted for power factor, but not less than one
hundred percent (1002) of the maximum on-pdak demand which occurred during the
previous billing months of June through September in the, twelve (12) months ending
with the current month.
AND CU$~OMFgS PEAK DID NOT CONTRIB T 10 ITY'S IUNTIC ~w~+iiu cycrAneRATING
e~ pax
11 a customer's cogeneration unit(e) is/are off during peak hours, and the
customer's peak did not contribute to the City's annual system peak, and the
Ca-generation unit is one (1) l* or larger, than the nameplate rating of the
customer's unit(s) shall be deducted from the peek demand.
The customer shall be charged the appropriate on-peak demand charges for the kW
supplied by the City for the succeeding twelve (12) months.
I
i
~ Q:EIE$MIHATtON OF CY~TEM D a~n
The system demand shall be the sum of the maximum kW demand supplied during the
fifteen (16) minute period of maximum use as recorded by the City's demand meter
plus the kW nameplate rating(s) of the customers generator(s).
In no
m
maximoon-peak dl the similarlyeQ termbnod during seventy
previous cbilling (70%) of
months the
June through September in the twelve (12) months ending with the current month,
DETERMINATION OF NON- MEgnsar- -ENERGY
All energy supplied to customers whose generating units are lase than one (1) MI
capacity.
i
2
f1
time
SCHEDULE ES 3t-Jul-B9
STANDBY, SUPPLEMENTARY AND MAINTENANCES avtc° 03:09 PM
(Continued)
DETEAMINATION OF EMERGENCY ENERGY
Emergency energy i' all energy Supplied by the City during peak hours of operation
to displace energy normally supplied by customers one (1) MW or larger unit.
l POWER FACTOR PENALTY
The City reserves the right to determine the power factor of the customer's
installation served during periods of maximum demand or by measurement of the
average power factor for the monthly billing period. If the power factor is below
ninety percent (90%) during on-peak hours, the demand for billing purposes will be
/ -1 determined by multiplying the uncorrected KM billing demand by 90% and dividing by
the determined power factor. The formula is as follows:
Unadjusted billing demand X .9
Determined power factor
DEFINITION OF ON-PEAK HDQRS
The City's on-peek hours, for the purpose of this rate schedule, are designated' as
being from 1:00 PM to 8:00 PM each Monday through Friday, starting on June 1 and
continuing through September 30 each year.
i
i
DEFINITION OF OFF-PEAK HOURS.
The City's off-peak hours, for the purpose of this rate schedule, shall be all
hours not designated as on-peak hours,
2EUJL FACILITIM
1 All services which require special facilities in order to root customers's service
' requirements shall be provided subject to the spacial faO litiss rider.
PRORATION OF UTILITY BILLS
(a) Billing for demand shall be calculated on a 30 arty per month
basis and prorated for longer or shorter billing periods using
the following forwiils:
Actual days in reading period
30 X Customer Charge
i
3
I
i
i
i
SCHEDULE ES 31-Jul-89
03:09 PM
STANDBY. SUPPLEMENTARY AND MAINTENANCE SERVICE
(Continued)
PRORATION OF UTILITY BILLS (Continued)
(b) Billing for demand shall be calculated on a 30 day per month
basis and prorated for longer or shorter billing periods using
the following formula:
Actual days in reading period
X kW Billing Demand X Rate
30
CREDIT FOR ENERGY DELIVERED INTO CITY'S SYSTEM DURING ON-PEAK HOURS
If Customer-produced energy is fed back into the City's system during on-peak
hours, an amount equal to fuel cost calculated in accordance with Schedule E.C.A,,
as applicable to such energy 1s credited monthly, provided that Customer has paid
the City for necessary added metering, protective and other equipment as
determined by the City.
CREDIT FOR ENERGY DELIVERED INTO CITY'S SYSTEM DURING OFF-PEAK HOURS
I
If Customer-produced energy is fed back into the City's system during off-peak
hours, an amount equal to 10.01211 per kWh (for each kWh delivered back into the
city's system) will be credited monthly, provided that Customer has paid the City
h for necessary added metering, protective and other equipment as determined by the
City.
ENERGY COST ADJUSTMENT
A charge per kWh of energy taken for fuel cost calculated in accordance with
Schedule E.C.A..
PAYMENT
Bills are due when rendered, and become past due if not paid within twenty (20)
calendar days from date of Issuance.
LATE PAYMENT CWMIS
Bills are considered past due if not received within twenty (20) calendar days and
shall be accessed a late payment charge of one and one-half percent (1.5%) per
month on any unpaid balance.
l 1
I
i
~s.-s;o tarty a,a
V w ~ ~
O {
e
i
• M ri
II !
N w 1 ~1 ,
r ~ M
+ r
f" V
r.
• 1 ►
`a
_ r
M r F
QQ M
r.
! i Y 4
V • 1
w M
see
w 1~ N y N ! " !
/ : L 1
N w b 1
f ~ ~ r y ~
y r.
as
in
!
y N Y ~ r.j
1
1 •
i ~
it
f
1
I
I
I City of Dentofi Witter Utility 31-Jul-89
f Current vs. Proposed Rates
Rate Schedule Proposed Current
Rates Rates
Residential Rate WR
3/4" Meter sc.75 16.50
1" Meter 8.00 7.75
1 1/2" Meter 11.50 11.00
2" Meter 12.75 12.25
First 15,000 sal 1.85 1.8u
15,000 - 30,000 sal Suamer 2.75 2.55
All over 30,000 gal Summer 3.30 3.10
15,000 - 30,000 sal Winter 1.85 1,85
All over 30,000 sal Minter 1.85 1.90
Commercial/industrial Rate WC
3/4" Meter $14.25 $12.75
1" Meter 15.50 14.00
1 1/2" Mater 18.00 "16,25
Meter 20.00 18.00
3" Motor 55.00 53
4" Meter 95.00 .50
4 90.00
6" Meter 120.00 115.00
8" Meter 137.00 130.00
Commodity Charge/1000 gal
Commodity Charge/1000 gal 2.00 1.85
Sales for Resale Rate WW1/WW2
Minimum Charge WWI $155.00 $150.00
J Minimum Charge WW2 1170.00 164.25
W3 Demand Charge per 1,000ga1 20.00 16.00
M3A Demand Charge per 10000ga1 27.40 21.88
Commodity Charge 0.85 0.73
Over 3,000,0009al NA NA
fntra-Govt Finished Mater Rate WO
3/4" Meter $11.25 111.25
1" Motor 12.50 12.50
1 1/2" Meter 15.50 15.50
2" Meter 17,50 17.50
3" Meter 53.50 53.50
Meter 85.00 85.00
8" Meter 107.00 107.00 1
f 8" Meter 125.00 125.00
~ Commodity Charge/1000 gal
i
Commodity Charge/1000 gal 1.90 1.80
i
' I
I
i
i ,
I
i
y}2 1:..aav~
MIb rvyY mKi+l'9
~a.:4b J
Intro-Govt Raw Water Rate WGU
Minimum Charge 1115.00 1115.00
Commodity Charge/1000 1a1 1.10 1.05
Standby Fire Service Rate WF
ti" Line 123.00 120.80
8" Line 35.25 32.06
Metered Hydrants Rate WFH
Customer Charge Minimum 122.00 120.00
Commodity Charge/1000ga1 2.00 1.90
~I
I
I
1
I
{
i
i I
I
I
3
g
so
~ s
.
s a
s
M H
40 In
to
60 60 "W
r
V
r
Z. F
I ! ~ M Y w i1
w
C _
F-
V • M
r ~ ~ M V
r
M
M ~ r
R r
r
M M ~ r
NMr M
Y y
w M
~ r
II
I
H)3
i
I
i'
5
City of Denton wastewater utility
Current ve. Proposed Rates
Rate Schedule Proposed Current
Rates Rates
RESIDENTIAL SEWER
Facility Charge $3.00 $3.00
Commodity Charge/1000 gal 1.50 1.30
REGULAR COMMERCIAL SEWER
Facility Charge $7.25 $6.50
Commodity Charge/1000 Sal 1.78 1.60
PRETREATMENT SEWER
Facility Charge $7.24 - $6.50
Volume Charge/1000 gal 1.80 1.60
Surcharge - $00 S/ppm > 250 0.000713 0.000690
- TSS 6/ppm > 250 0.000751 0.000596
ATING PLACES
Facility Charge s7.26 $6.50
Volume Cnarge/1000 gal 2.20 1.60
EQUIPMENT SERVICES
Facility Charge $7.25 $6.50
Volume Charge11000 gal Z.20 1.60
WHOLESALE SEWER
Facility Charge $125.00 $125.00
Commodity Chayge41000 gal 1.95 1.56
I~Jf INTRA-OOVERNMSNTAL SEWER
Facility Charge $7.60 $6.50
Commodity Charge/1000 gal 1.60 1.60
RESIDENTIAL SEWER SERVICE TO USERS
WITHOUT DENTON WATER SERVICE
Fso Char Corporate Lots 62.25 $2.25
Fao Char O Corporate Lots 3.35 3.35
Coamodtty Charge/1000 gal CL 1.50 1.50
Coamodtty Charge/1000 gal OCL 2.25 2.25
1
I I
D R A F T
EXCERPT
MINUTES
PUBLIC UTILITIES BOARD MEETING
September 27, 1989
4. HOLD PUBLIC HEARING ON PROPOSED WASTEWATZR RATES.
LaForte opened the public hearing by advising that at the
last meeting of the city Council, they approved the water
and ele;tric rates but deferred action on the wastewater
rates in part because of increased rates charged for
restaurants and equipment services. The restaurants and
equipment services have impacted the system more than the
average user.
LaForte then opened the Public Hearing requesting each
person state their names for the record and present
input:
a) "I am Bill Johnston, owner of the Kettle Restaurant
and President of the Restaurant Association, and
have been informed that we should have known of this
issue one year ago, but Monday, prior to the City
Council meeting is when we first heard of it. Since
then, we have been scrambling to come to an
understanding of what was going on with sewer rates
and why we are being singled out and we understand
there will be a 30-37% increase next year. I am
here to plead for more time to try to get our ducks
in line and come back with more of a formal
proposal. But to start off with as an alternative,
(I have looked at the cost of service study, and the
recommendation was an 8.5% increase) (although
j restaurants are not ready to concede that we are the
major portion of the problem) we provide payrolls,
serve as city ambassadors and we feel you should
support the infrastructure. If this system is based
on increase of business costs, the overall users of
the system should be charged 8.5 and we will go
with that. The only other thing I would like to say
is that this is a 3% impact on my bottom line, even
at 14 per customer. I appreciate the Board's time."
Chew: "How much time do you need?"
Johnston: "Six months would be uice."
Chews "For you to come up with another proposal?"
Johnston: "The Cost of Service Study is fairly in detail and
it will take some time to get through and understand
r
I
I ~
f
~l
f
K
LaForte: "Are you going to employ experts?"
Johnston: "That would be the idea."
Laney: "Would staff have the data which compares the class
of customers?"
Nelson: "Yes. It is right here."
LaForte: "First, we will hear the public regarding this
issue."
Gavin: "I am John Gavin, Manager of the Sheraton, President
of the Hotel/Motel Association, and member of the
Restaurant Association.
I just found out about this yesterday. I would like
to have some time to look at this and meet with the
other members of the Hotel/Motel Assn., and I would
appreciate the opportunity to inform them."
LaForte: "There is no special impact on the Sheraton other
than that rate being charged to the commercial class
of 114
The newspaper covers these meetings. It is hard to
tell people to read the newspaper."
Nelson: "We ran two Sunday 1/4 page ads outlining the
proposed rates."
LaForte: "No one did this in such a way to keep anyone in the
dark; all activities were accomplished openly and
above board."
~ I
E Burg:
f "My name is Geneva Berg, and I am owner of the
Locust Street Grill. I missed the announcements also
and I think we need more time, but I just placed
orders for menus at $1200. We have got to make a
budget of $800-1000 more per year for me, and I need
time to adjust to this. The smaller business can
only absorb so much increase before they shut the
doors. There is just too much that is going up at
the way they are doing now."
Davis: "My name is Don Davis of Davis Bakery. Are bakeries
with restaurants or how are we classified?"
Nelson: "They are regular commercial."
i
~I
k
Compton:
"My name is Stephanie Comptom. I recently opened a
business on the square, and what I see as a new
business owner trying to expand is that I have
trouble meeting all the increases and would like to
stay in business and I speak as a concerned person
with all the overhead of a new business."
LaForte:
"Is your business a restaurant?"
Compton:
"I have a deli."
Dutia:
"We are providing an exemption if you qualify for a
deli."
Martin:
"The exemption is for pre-packaged, pre-wrapped food
with little or no processing; however, if the deli
is processing foods, they may fall under the
proposed rate."
LaForte then called for any others who may wish to speak
before the Board. No one came forward and the Public Hearing
was officially closed.
LaForte then opened the floor to comments by the staff.
Nelson stated that he had some information on how the staff
proceeded to develop rates and would present this information
at this time if the Board desired. The Board concurred.
However, before the presentation, LaForte made the following
comment:
1
"How does the Utility's proposed wastewater rate increase
compare with rate increases proposed by the School Board,
the City of Denton, the County, etc.? I agree these
people are getting hit hard by many levels of government=
but why should we be the level of government that backs
away? If they are going to lower taxes for everybody
then we could consider lowering sewer rates."
Nelson indicated that the staff would prepare such a
comparison if the Board desired. He then presented the format
of how staff came about setting the rates, the waiver options
and alternatives by presenting the following information: (the
goal of this presentation was to show the rather difficult and
involved process of ratemaking)
a) Table showing proposed rates.
E b) Table showing gallon/day usage.
c) Table showing impact of rate on per customer basis
' I
I
a
At this point, Nelson pointed out that the actual increase to
this rate class (restaurants and equipment services) should be
77-78% according to the City's cost of service analysis. This
analysis was then reviewed by Nelson and he explained cost of
service includes such components as wastewater treatment
plant, pumps, manpower, etc. After cost, staff looks at the
cause of such cost, i.e., is it transportation, volume,
strength of BOD and TSS, etc. He pointed out that at the
residential level, the City treats 1 billion gallons of
effluent per year, representing 34% of the system. On eating
establishments, the city treats 67.8 million gallons per year,
or 2.1% of overall treatment volume. However, these same
eating places represent 7% of the BOD treatment costs.
Nelson further advised the strengths of wastewater consist of
ROD (grease, fat, gasoline, detergent for dishwashing, etc.)
I In residential, this wastewater strength is measured at 180
milligrams per liter; in commercial, this wastewater strength
is measured at 250 MG per liter; in eating establishments,
this wastewater strength is measured at 800 MO/L. This figure
used by the City is very conservative (800 MO per liter).
Other cities much higher levels, i.e., 1008, 13681 1074, etc.
LaForte asked how can staff tell what eating establishments
are doing?
Martin indicated that this is generally associated with the
type of discharge into the system, i.e., dishwashing
detergent, food particles, grease, etc., and it all boils down
to the relative strengths. The higher the strength of BOD the
I harder and costlier the wastewater is to treat. In the city
of Denton, the utility has to treat wastewater that comes in
to the system anywhere from 250 BOD/250 TSS, and get it down
to 10 BOD/15 TSS. (This treatment level is mandated by the
Environmental Protection Agency under our license.)
LaForte asked how the staff knows these restaurants/equipment
services are at a high BOD. Martin advised that this
information is obtained primarily from tests. On restaurants,
the city also went outside of our system and got information
from other cities in the area. All cities surveyed have
already enacted such a rate for this type of discharge.
Arlington, Ft. Worth, etc., through testing all show very hirrh
levels of BOD and TSS exiting restaurants, leaving our figure
of 800 very conservative.
LaForte asked if there is some way the city can meter to
measure each individual restaurant.
I
I .
t
Nelson stated the utility could do that for each individual
customer; the test run takes three to four days. Arlington
does this type of testing. The manhole installation would
cost from $400-$800 to install, the sampling equipment would
cost the Utility approximately $3000, and each sample would
cost the restaurateur from $100 to $120 four times (quarterly)
per year.
Frady commented that these costs could exceed those of
the proposed increase.
one of the people in attendance at the meeting inquired if the
dorms at University of North Texas and Tx Woman's University
had to pay? Nelson advised that when you consider a dormitory
and the associated eating service, the wastewater discharged
into the system consists not only of that from the cafeteria,
but also numerous showers and other water usages which blend
together to produce a wastewater with a much lower treatment
level requirement that for the restaurant /equipment services
situation. Therefore, unless the cafeteria can be separately
metered, they would be charged at the regular commercial rate.
LaForte asked about other cafes and student eating places not
in this situation. Nelson stated that if these are separately
metered, they would be charged at the restaurant rate.
LaForte stated that the thrust of this entire process of cost
of service ratemaking represents an attempt to be fair and
equitable to all cuncerned and, if the University's are
I impacting the system, the universities ought to pay more.
Nelson stated another way we can handle the problem of
recovering increased treatment costs caused by the
universities is to compute the total discharge and, if they
exceed 250 mg/1, add a surcharge as per our pretreatment
ordinance and rate. Martin indicated that one of the tasks
assigned to his area by the EPA is that the City must include
University of North Texas and Texas Woman's University in the
pretreatment program, and the Utility will bt actively
sampling their discharges and these will be a part of this
pretreatment program/process.
Laney stated that this treatment program and associated
increased costs are not of our own making to a large extent,
and the community needs to realize this. The State and
Federal governments have mandated standards that are making it
tremendously more expensive for the city to treat wastewater
at the City plant. In fact, at the water treatment plant, the
Utility will soon incur the expense of moving to ozone
treatment at the direction of the federal government.
Thompson stated that despite the 40% increase, these
comparisons with other cities show that Denton businesses are
better off than those in other areas.
I
Ll
{
4
Nelson reviewed the impact the restaurants make on the system
pointing out that a re dential inputs 1 pound of BOD/1000
gallons of wastewater, whereas a restaurant inputs 7 pounds of
BOD /1000 gallons of wastewater.
Nelson also showed rate comparisons for this rate class with
Austin, Ft. Worth and other surrounding communities, and their
very high rates indicate that Denton certainly has not gone
overboard on this proposed rate.
He also showed that Eating Places represent:
$114,000 in revenue to the city
$202,000 in costs to treat
Showing an undercollection in this group of 778 or an increase
of $88,000 to get the rates up to where they are paying their
way. Nelson Paso pointed out that residentials are overpaying
by 3.28 or $ 0,000 where they should have a 3.28 reduction.
Nelson advised '_hat, in trying to bring rates to a cost of
service level, it sometimes would not be possible to move such
rate up all at once, but is better for those affected to phase
in such a rate. Alternatives are:
a) Implement full cost of service increase of 788
b) Implement proposed rate increased.
C) Implement lower than proposed rata.
d) Delay implementation.
e) Phase rate in over three (3) years vs two (2) years.
I
1 Nelson stated that staff strongly zecommends that if there is
any delay in the rates, we separate out this class and
implement the rest of the customers rates since the Utility
will loose one quarter of a million dollars in six months of
a delay in wastewater rate implementation.
Nelson further indicated staff would suggest to phase in the
restaurant/equipment services rate over a three year period vs
a two year period if the Board considered the 408 increase too
burdensome.
LaForte asked if Nelson could comment in a general way row far
the proposed rates
go in reflecting the cost of service.
Nelson stated that the Eating Places and Equipment Service
rates are under recovering actual costs. In fact, the
residential should be receiving a 3.28 reduction, but PUB
recommended that such a reduction not be given at this time,
so an overeollection is reflected in this rate class of 3.21.
F
If such a reduction were given this year, increased
treatmentcosts mandated by the EPA in upcoming years will
cause greaterincreases in future years.
On the commercial rate, they are experiencing a 98 increase in
costs, and the staff recommended an 118 increase. Therefore,
th3 commercial class is being overcoliected by 28.
We do note that our pretreatment customers (those that EPA has
indicated may discharge hazardous waste into the system)
received a 308 increase, whereas, this should have been 40%.
The eating establishments/equipment services should receive a
778 increase and a 408 "phase in" increase had been
recommended.
LaForte asked if these rates then, generally speaking, Wlect
the cost of service. Nelson replied yes.
LaForte asked what is the dollar amount of money concerned in
the rate increase to restaurants. Nelson indicated that
$46,000 is the total that has brought these people to the
meeting this evening.
LaForte inquired, on a three year basis, what money is lost
the first year, the second year, and the third year.
Nelson replied that $42,000 would be lost within two years,
and the Utility would have to make cuts in the budget to meet
such a loss. LaForte inquired as to what service cuts would
need to be made. Ham indicated that some replacement of lines
would be discontinued and patching instead of replacing would
take place. This would build up long term costs instead of
short term costs. LaForte stated if we do this for three years
what are the costs. How much are you going to get out of
rates in 19937 Staff indicated this is impossible to tell at
this time.
~J LaForte made it clear that the Utility does not have
sufficient funds at this time to make all adequate repairs to
lines.
Thompson commented that he was pleased to see these people
here. He emphasized that the Hoard wants the restaurants to
stay in business, and the city needs to be equitable to all of
the citizens of the community.
LaForte stated that this problem is greater than the
utilities. "I sympathize with you, but .jhen Mr. Johnson
called his restaurant a culprit, I don't agree with that. We
hope he prospers and does well. we hope he continues to
prosper and do well. However, it is hard to believe it is
more equitable to charge across the board and charge people
who are not creating the problem."
f
e
1
I
it
s
Laney stated a concern that if the proposed rates are phased
in over three years, the Utility will have twc years of
shortfall. How will this be made up?
Nelson indicated again that the residential customer is
picking up more than their share. The government and the
commercial are picking up more than their share. Further, the
Utility Department is prepared to shut down certain projects.
LaForte asked if the Board wanted to reconsider the motion
before the Board. LaForte stated that the City Council needs
to make the decision based upon the best advice the Board can
give.
Chew stated if City Council refers an item bac% to the Board,
the Board needs to look at alternatives. LaForte commented
that the Board has looked at five alternatives, the only two
he would consider acceptable, are as originally proposed or go
for a three year phase in. Chew indicated that the 408
proposed now is too high.
Nelson expressed that phasing in of a new rate is a valid
principal of rate design in order to not overburden a
particular classy staff would recommend a three year phase in.
LaForte stated that he wanted it understood that staff has
recommended a three year phase in of the proposed rate.
LaForte called for a motion.
Laney made a motion that it be recommended to the City Council
that the wastewater rates for eating places and equipment
j services be phased in over a three year period in equitable
increases to reach 77.23% for eating establishments and 76.724
for equipment services. Second by Chew.
Thompson made the following statement:
"We are members of this board to advise City Council on
ways to supply utilities of the city and to be as
equitable in proposing rates as we possibly can. We have
done that. Extending this for three years will do damage
to the system. City Council is the elected
--1 representative body that has to weigh the political
conditions of the city, and they make the political
compromises that have to be made. It is not our function
to make that compromise. This decision is an intrusion
into decisions city council needs to make, and I will
have to be against this motion."
LaForte stated that this is a question of being inequitable
over two years or three years. The proposed rate itself is
inequitable because it should be an increase of 738. He
further stated:
I
II I
I
I
1
{ 1
i
a t
" Another point I want to make is that staff is skilled
in technical judgments that need to be recommended.
Staff has recommended we go to a three year incremental
increase; a further consideration is that no other rates
have been raised tonight as a result of a three year vs a
two year phase 1n.•:9 same recommendation for all other
rates is the same that has been recommended previously.
This Board is doing what it thinks is in the best
interests of the general wellbeing of the citizens of
Denton. Anytime the City Council or anyone else feels
this is not the case, they can remove me or remove the
Board altogether."
l Tullos advised that the way the motion is worded, it would I
preclude any additional increase due to increasing costs next I
year. Nelson stated this may be locking the Utility into the
current proposed cost of service increase.
Laney withdrew the motion.
Laney then made a motion that it be recommended to the City
Council that the wastewater rates for Eating Places and
Equipment Services be increased in proportionate increments
over a three year period, such incremental increase for the
first year to be 258, and the second and third year to be
proportionate in order to assure that cost of service rates
are achieved for these rate classes at the end of the three
year period. All other proposed wastewater bate adjustments
remain as originally proposed. Second by Frady. Four ayes,
k~ one nay (Thompson). Motion carried.
I
M
MINSEPT.27
i
I
_ k
y
i
i
i
i
i
i
i
i
I IF
I
1
ll
80K.q~AR qW 11
I Y
DATSt 9/21/89
CITY COUNCIL RUORT FORMAT 3 4 p ~
TO: Mayor and Members of the City Council
FROM: Lloyd Harrell, City Manager
SUBJCCT: Telephone System Study
,%9COMMBNDATION:
Continue analysis of proposals and negotiations with vendors.
I
i
SUMMARY.
At the conclusion of study the City will enter into contract with best suited
vendor for new telephone system.
BACKGROUND:
The current telephone system is approximately 11 years old and is at c6pacity.
It is anticipated that the funds now spent on leasing telephone equipment will be
used to pay for the new system over a 5 to 1 year time frame. Currently, we can
1 not add any mote phones to the system or utilize any new technological enhancements.
PROGRAMS, DBPARTMBNT OR GROUPS APFBCTBD:
City organlzation
FISCAL IMPACT: f
$600,000 to ;800,000 depending on features selected and vendor selected.
Respeo' ly submitted:
loy acre
Prepared by: City Manager
Gary Colli s
Director of Data Processing
Ap/ e .
I
C1TYOf VINTON, TEXAS 215 E. WKINNEYI DENTON, TEXAS 78201 /TELEPHONE (817)666-8200
M E M O R A N D U M
DATE: September 21, 1989
TO: Lloyd Harrell, City Manager
i
FROM: Gary A. Collins, Director of Data Processing
{
SUBJECT: TELEPHONE STUDY INTERIM REPORT
i
I i
j I am happy to report that we received 4 proposals on a new telephone
system, The vendors submitting proposals are General Telephone, Southwest
Bell, AT and T and Rolm. There is a great variation in the proposals and
we are analyzing the proposal differences. The proposed prices include
installing a direct buried fiber optic cable between City Hall and the
Service Center. Currently, the prices vary from a low of $596,000 to a
high of $809,000.
Due to the variance in prices, we feel further analysis -f each proposal
and clarification of options will yield changes in these .:ices. An
additional option open to the City is to have the City of Denton Utility
Department provide us with a cost estimate to install the fiber optic
cable.
I feel that we will have viable contract on this new telephone system in
late October, If I can provide you with further information, please call
me.
Z~liv''w
Gary Collins
Director of Data Processing
E
i
{
i
•
i
i
v
.
V
E
I~
9
N WWI
~v .w.y It11nLt~
CiTYofDENTON, TEXAS MUNICIPAL BUILDING i DENTON, TEXAS 76201 i TELEPHONF{817)566.8200
MEMORANDUM
DATE: September 30, 1989
G f
4 TO: Lloyd V. Harrell, City Manager
FROM: John F. McGrane, Executive Director of Finance
SUBJECT: BUDGET INFORMATION
Attached is the budget schedule that was followed this year for
both Ccuncil and staff. I am also including a blank calendar
for the months of August and September, IY90,
o ~n F. McGrane
JFMcG:af
Attachment
l
4986E
II
IE
i
i
i
4
Page 1 of 2
R E Y I S E D
BUDGET CALENDAR
1989-90
1989
PUt Pp$E
March 28 Tuesday Distribute questionnaire to Councilmembers.
April 3 Monday Budget kick-off meeting and distribution of
~11 Budget Instruction Manual, PoSltion Control
I and BLIO for first Ctve months.
April 4 Tuesday Return priorities questionnaire (City Council).
i April 4 Tuesday City Council budget discussion with City Attorney
and Judge.
1.
April 17 Monday Distrlhvte mid-year Budget Comparative Report
(B1L0).
April )9 Tuesday City Council budget discussion with City Manager.
Review questionnaire responses with City Council.
April 24 Monday Revenue projections from departments due in
l
budget office.
I
May 3 Wednesday Personnel forms Cl due in Personnel.
May 4 Thursday Revenue projection to City Manager.
May 12 Friday All budgets due in hudget office.
Budget analyst's review of budgets.
k Compilation of budget document begins.
May 12 i 13 City Council Goals and Plans Update Seminar.
Friday 5 Saturday
May 31 6 Jung 1 Budget and Personnel Position hearings
Wednesday i Thursday (Executive Budget Committee)
June 8, 9 i 12 Ranking and discus ion of budge
T*arsday, Friday 3•t.
(Executive Budget committee)
ondey
June 27 Tuesday Present major budget issues and recommendations
to city council and discussion on
budget. preliminary
I
July 27 Thursda
Y Print proposed budget. I
July 31 Monday Submit proposed budget to Mayor and City Council
and (Ile with City Secretary.
i i
I
I
i
h
I
r`
R E V I S E D
BUDGET CALENDAR
1989-9C
1989 PLRPOSE
August 15 Tuesday city council budget study.
August 26 Sunday Publication of tax rate, schedules and fund
balances.
August 22 Tuesday Submission of proposed effective tax rate and
rollback rate to City Council.
Submission of certified collection rate.
Approval of Tax Roll. /
Take Rec)rd Vote to propose a tax :ate, rand
notification of dater time and place of pub is
hearing.
City Council budget study.
i
August 25 Friday Publish first quarter page notice - 'Notice of
Public Bearing on Tax Increaser (At least seven
days prior to hearing.)
%Ugus! ,q Tuesday City Council budget study.
September 5 Tuesday Public Hearing on budget and tax [ate
(only agenda item).
Notification of date, time and place of final vote
on tax rate.
September 12 Tuesday City Council Work Session - tentative decision
regarding budget issues and any amendments.
September 13 Wednesday Publish 2nd quarter page notice - 'Notice of Vote
on Tax Rate'.
September 19 Tuesday Final Budget Consideration. Adoption of Proposed
Budget and Approval of Tax Rate (Regular Council
meeting) - no more than 14 days after hearing.
I
September 24 Sunday Publish Notice of Adopted Budget available for
public inspection.
ICI ~
4758F
8/x'/89
I
I
i
rt:n n;a
N _ -
y
C
b
K
- - - - - - - - - - - - - - - - - - _
s
Z
0
K
H
C
tC
N
b
1 ~ K
i
-_____I --_-__.-IN__._-_-_I ----__-IW__-__
N A V
_ E G1
~ x H
M
K o
Ip _ IW _ I~ I~ 1N
l
b J
IW_ IA_ I~_ lo- ---I_--
H
C
b '
r ~
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LI co
d
i K
I
E
I
i
1
~o Iw - h Io 1-
fA
ZC
Y
K
- - -
aK Z
'C O
n Y
K
I
o
i
K
IP_ I; Iti ---h- ------I---
~ Z ~
I
Y ~
K ko
I~ to - -Iw -I~ I _
N
Y
K
---.--I--------I---------I~--_-_---IJ-----
/ - - -
I 111
ro
N
Y
i
I
H
C3
I
I y
I K
I
I I
I
I
I
i
i
,I
f
05 ,'3 op m.ai5
October 3, 1989
CITY COUNCIL AGENDA ITEM
WORK SESSION
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Manager
SUBJ: DISCUSSION OF THE LONE STAR GAS CONTRACTS.
RECOMMENDATION:
- The Public Utilities Board, at their meeting of May 24, 1989,
recommended to the City Council approval of the following gas
contracts:
1, Lone Siar Gas Sales Contract
2, Lone Stzr Gas Transportation Agreement
3, Lone Star Transfer of Gas Agreement
4. Enserch Gas Sales Contract
SUMMARY/BACKGROUND:
The Lone Star contract expired at the end of 1988 and negotiations
have been in progress since October 1988 on new five (5) year
contracts.
1. Lone Star Gas Sales Contract is a base contract for i BCF of gas
(approximately 113 of total requirements) with a 50% back out
provision to allow Denton to purchase gas from another supplier
through another pipeline beginning in 1990, it has a demand or
availability charge of $0.315/MCF which would amount to $375,000
If no gas was purchased under the contract, but allows credit of
up to 75% of this charge by $0,22/MCF gas purchases either from
l Lone Star or Enserch.
The purchase price has a beginning base price of $0.42/MCF in
winter and $0.38/MCF for remainder of the year for
transportation of the gas plus Lone Star's wellhead gas price
which is presently approximately $3.41/MCF. The transportation
rate escalates at $U.01 per year. This contract allows the City
to have 1 MCF per day for plant protection or pilot gas during
curtailment.
2. The Enserch Gas Contract allows the City to purchase up to
25,000 MCF/day finder "spot" market price cond:tions from Enserch
instead of using contract gas under the Lone Star Contract,
Present "spot" price is $1.55/MCF. A transportation fee of
$0.15 to $0.20/MCF would be added to this "spot" price.
}
R
CC Meeting
Page 2
3. The Lone Star Gas Transportation Agreemert allows shipmr-nt of up
to 30,000 MCF per day at a price of $0.20/MCF for volL!me less
than 5,000 hCF/day and $0.15/MCF for volumes exceeding
5,000/MCF/day.
4. The Lone Star Transfer of Gas Agreement allows Denton to have
gas delivered to other cities generating plants instead of
Denton. However, this is at the total discretion of Lune Stagy
If other cities do not have a gas contract with Lone Star. If
Lone Star does allow transfer to non-Lone Star contract cities,
Denton would have to pay a 50.201W7. If other cities have a
contract, Lone Star will unconditionally transfer the gas at no
charge.
FISCAL IMPACT:
The City presently receives approximately 35% of its power
requirements from gas generation. The cost of fuel has an effect on
our economics dispatch ii.e., split the savings) as well as gas used
in our plant. We estimate $~.9 million for nas generation this
fiscal year and about $11.3 Million by 1993 due to increase in both
price and quantity of naturel gas.
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
City of Denton, Texas Municipal Power Agency, Texa% Municipal Power
Pool, Lone Star Gas, power production costs.
4Resully ubm t d,
re y
- Manager
Prepared
9_.E. Nelson, Execut ve D rector
Department of Utilities
Exhibit I Four (4) Gas Contracts
I If Ordinance
III PUB Minutes of May 242 1989
i
b515U:3-4
I
r
i
CAS SALES CONTRACT
SETYEEN
LONE STAR CAS COXPANY
AND
i CITY 01 DENTON, YEW
i
f
f DATED JANUARY 1, 1959
i
I
~i
I~I
I
1
3 I
I I
I
i
1
~IZl'N wA d ar„R•~
I1
I
TABLE OF CONTENTS
ARTjCL PEE
Definitions 1
I
II Subject Matter 3
III Quantity 3
IV Demand Charge 8
! V Quality 10
j
VI Delivery and Connection Facilities 12
VII Measurement 13
VIII Price 16
IX Adjustment for Heating Value 19
X Reimbursement for Taxes and Rentals 19
xi Payment 22
I
XII Teto 24
i
xill Force Majeure 24
xIV Curtailment of Deliveries 26
xv Regulatory Bodies 28
xyl Termination Privilege 28
xvil intrastate Provisions 30
XVIII Warranty 31
XIX Right of Way 31
xx Indemnity 31
I~
xxt Vaivor of Broach 32
I
xxil Assignment 32
xxill Miscellaneous 32
L
i.
i
I
GAS SALES CONTRACT
THIS CONTRACT, made, entered into, and effective on this let day of
January, 1989, by and between LONE STAR GAS COHPANY, a division of ENSERCH
Corporation, a Texas Corporation, hereinafter referred to as 'Seller", and the
CITY OF DENTON, TEXAS, a municipal corporation, hereinafter referred to as
"Buyer',
WITNESS ET H:
WHEREAS, Buyer owns and operates an electric generating station known
and designated as the Spencer Generating Station, located in Denton County,
Texas, is hereinafter referred to as "Buyer's Plant" (or "Plant'); and
WHEREAS, Buyer desires to be assured of an adequate supply of natural
gas for the operation of said Plant, and Seller desires to sell gas to Buyer
a
under the terms and conditions of this Contract;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein containad, together with other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer do
f hereby contract and agree with each other as follows:
` ARTICLZ I
/ DEFINITIONS
For the purposes of this Contract, unless the context of the instrument
requires otherwise, the following definitions %hall be applicable:
1 1. "Gas" shall mean natural gas produced from gas walls, vaporized natural
gas liquids, gas produced in association with oil (casinghead gas) and/or
the residue gas resulting from processing casinghead gas and/or gas well
gas, 1
. 1
i
I
2. "Day' shall mean the 24-hour period beginning at 7:00 a.m., Dallas time,
on one calendar day and ending at 7:00 a.m., Dallas time, on the following
calendar day.
3. 'Month' or "billing Month' shall mean the period beginning at 7:00 a.m.,
Dallas time, on the first day of a calendar month and ending at 7:00 a.m.,
Dallas time, on the first day of the succeeding calendar month.
4• 'Contract Year' or 'Calendar Year* shall mean a period of twelve (12)
consecutive months beginning at 7:00 a.m
Dallas time, on January 1 of
I
each calendar year of the term hereof and ending at 7:00 a.m., Dallas time,
on the same date of each succeeding Year during the term hereof.
~I
5• 'Mcf' shall mean one thousand (1,000) cubic fast of natural gas.
6• The term 'Btu' as used herein shall moan British Thermal Unit and, what*
I
appropriate, the plural thereof. he term 'MMbtu' shall mean one. million
(1,000,000) Btu.
7. 'Meeting Value or `Heat Content- :hall mean the total heating value
expressed in Btu per cubic foot
(gross Mr.teng value) of the gas delivered
hereunder, and shall be determined at a temperature of sixty degrees (604)
Fahrenheit, saturated with water vapor and under a pressure equivalent to
that of thirty (30) Inches of mercury at thirty-two degrees (321) Fahrenheit
` converted to bass conditions of sixty degrees (60') Fahrenheit and an
absolute pressure of fourteen and sixty-fiv4 one-hundredths (14.65) pounds
par square inch and adjusted to reflect actual water vapor content,
8• 'psia' shall mean pounds par square inch absolute.
9• 'Pat$' shall mean pounds per square inch gauge.
~I
2
I
F4~' F`
10. 'Transportation Agreement" shall mean that certain Gas Transportation
Agreement between buyer and Seller dsted January 1, 1989.
It. 'Transfer Agreement' shall mean that certain Transfer of Gas Agreement
bstvsen buyer and Seller dated May 1, 1989.
ARTICLE 11
SUBJECT MATTER
Subject to the terms and provisions hereinafter set out arv! to the extent
of and in accordance with the terms, conditions and limitationx hereinafter
stipulated, Seller agrees to sell and deliver to Buyer and buyer agrees to
purchase and receive from Seller, at the point of delivery herein provided for,
natural gas for that portion of the natural gas fuel requirements of Buyer's
Plant during the term specified herein, including but not limited to Article III
hereof, hereinafter called 'Buyer's Fuel Requirements'.
ARTICLE 711
QUAM'i 1TY
1. The quantity of gas, computed on an MMBtu basis, to be purchased and sold
hereunder shall be a volume of gas equal to that amount of Buyer's Fuel
Requirements specified by this Contract for its plant, up to but not in
f excess of Buyer's Maximum Hourly Volume, Maximum Daily Volume and Maximum
Annual Volume for each Contract Year, as such requirements are set forth
below:
For Each Contract Year
Maximum Hourly Volume 1,500 MMbtu
Maximum Daily Volume 30,000 MMBtu
Contract Year Beginning
January 1. 1989
Maximum Annual Volume 1,000,000 MMBtu
3
I
I
F
4 4
2.(a). On or before September 1 of each Contract Year during the term of this
Contract, Buyer shall submit written notice to Seller specifying the
Maximus Annual Volume obligation for the immediately following Contract
Year. The Maximum Annual Volume designated for 1990 and each
succeeding Contract Year shall not be greater than one hundred twenty-
five percent (1251) nor less than seventy-five percent of the Maximum
Annual Volume designated for the immediately preceding Contract Year,
however, Buyer may, once and only once during the term hereof, increase
the Maximum Annual Volume for any one Contract Year to equal more than
one hundred twenty-five percent (1251) but not more than one hundred
fifty percent (1501) of the immediately preceding Contract Year's
Maximum Annual Volume. In no event will Buyer ever establish a Maximus
Annual Volume of less than one million (1,000,000) MMBtu for any
Contract Year.
I ~
(b), If, during any Contract Year, buyer fails to submit a Maximum Annual
Volume as provided for herein, Buyer's Maximus Annual Volume for the
next succeeding Contract Year shall be equal to the Maximum Annual
Volume in offset for the preceding Contract Year.
(c). Notwithstanding anything to the contrary contained herein, nothing in
this Article or any other provision of this Contract rhall prevent
Seller from selling and delivering to buyer hereunder quantities of
gas in excess of the volume Seller is obligated to mail and deliver
hereunder, which Seller ties available and desires to sell and which
Buyer desires to purchase.
Buyer agrees that all of the gas purchased hereunder will be used or
consumed in and for the operations of Buyer's Plant, and that no part of
i
4
I
it
i
f
4
such gas will be resold or used for any other purpoiss, except as otherwise
expressly provided in the Transfer Agreement,
4(a). Should Buyer, during any Contract Year beginning on or after January
1, 1990, receive a bona fide written offer to sell and deliver gas
directly to Buyer's facilities (which serve Buyer's Plant) through a
pipeline other than Seller's pipeline and at a price (including taxes,
transportation and all other costa necessary for delivery of gas to
Buyer's facilities which serve Buyer's Plant) lo,+er than Seller's then
current price (including taxes, transportation and all other costs
necessary for delivery of gas to buyer's facilities which serve Buyer's
Plant) per M Atu, Buyer may purchase and receive natural gas from such
other person, firm, or corporation in accordance with such offer (such
purchases herein referred to as "Supplemental Volumes"); provided,
however, the total of such Supplemental Volumes during such Contract
i
j Year do not exceed the following voluee limitations (herein referred
to as "Maximum Supplemental Volume');
{ (1) For the Contract Year beginning January 1, 1990, and each Contract
Year thereafter during the term hereof, Buyer say receive ,
Supplemental Volumes not to exceed fifty percent (501) of the
Maximum Annual Volume in effect for such Contract Year. '
(it) Notwithstanding anything to the contrary contained herein, if
Buyer notifies Seller as provided in paragraph 2(a) of this
Article that it desires to increase its Maximum Annual Volume for
any one Contract Year herein to equal more than one hundred
twenty-five percent (1251) but not more than one hundred fifty
percent (1501) of the immediately preceding Contract Year's
i S
11
t
M
i
Kaxlnum Annual volume, then for such Contract Year and each
Contract Year tharasfter the uxtmum Supplemental Volume
limitation specified to this paragraph 4(a) shall be reduced by
*-snty percent (201),
(b), Ni, vi standing the provisions of paragraph 4(a) above, prior to
entering into any agreement for the purchase of such Supplemental
Volumes, or prior to entering into any amendment to an agreement under
which Buyer may purchase Supplemental Volumes, Buyer shall notify
Seller in writing of the terms and conditions of the bona fide offer
for such proposed Supplemental Volumes (including a complete facsimile
of the offer which is presented to the Denton City Council for such
proposed Supplemental Volumes). If Seller (or its assignee) (1)
within five (5) days of receiving buyer's said notice if the delivery
period of such notice is one (1) month or less, (it) or within thirty
(30) days of receiving buyer's said notice if the delivery period of
such notice is greater than one (1) month, offers in vriting to sell
and deliver gas to Buyer all or any portion of the quantity offered
under such bona fide offer, under similar terms and conditions as
I
E, ( stated in Buyer's said notice to Seller, at the same or lower price
(including taxes, transportation and all other costs necessary for
delivery of gas to Buyer's facilities which serve Buysr's Plant) per
KMBty, then Buyer shall purchase from Seller (or its assignee) a
~i quantity of gas equal to the lesser of (1) the quantity offersd in
writing by Seller (or its assignee), (it) a quantity equal to i- less
i
i than 501 of the quantity offered for yurchsae under the aforesaid
bona fide offer, or (iii) a quantity equal to no lees than fifty
6
I
r
i
percent (501) of the applicable Maximum Supplemental Volume limitation
set forth in the preceding paragraph 4(a) above, under Seller's (or
its assigr.es's) aforesaid offered terms and conditions rather than
under the aforesaid bona fire offer. If Seller (or its assignee)
fails to meet or better the aforesaid bona fide offer as provided
above for all or a portion of the quantities offered under the bona
fide offer or if Buyer and Seller (or its assignee) cannot agree to
some other mutually agreeable offer within the said five (5) or thirty
(30) day period (whichever is applicable), nothing shall limit Buyer's
purchases of Supplemental Volumes under such bona fide offer provided
that during each Contract Year herein the sum of (i) all Supplemental
Volumes purchased by Buyer under any and all such bona fide offers
and (ii) all purchases of gas by Buyer from Seller (or its assignee)
under this paragraph 4(b), never exceeds the Maximus Supplemental
Volume for such Contract Year herein.
(c). If at any time during the tern of the bona fide offer for Supplemental
Volumes, the terms and conditions of such offer are changed in any
manner from the written terms and conditions which Buyer provided
Seller, then buyer shall notify Seller immediately of such change,
Once Buyer has made such notification to Seller, then Seller (or its
assignea) shall have the right to offer to eall and deliver gas to
Buyer for all or any portion of the quantity offered under the new
terns and conditions of such bona fide offer pursuant to the same
procedures as provided in the preceding paragraph 4(b).
(d). to the event Buyer enters into agreement(s) with other party(s) for
i
the purchase of Supplemental Volumes as set forth in this Article,
T
I
I
I
Puyer shall give Seller, at Se11er's request, prior verbal estimates
of such Supplemental Volumes which buyer expects to purchase and
consume each month and shall notify Seller in writing of the actual
volumes of Supplemental Volumes purchased and consumed during such
month as soon as practicable miter buyer has knowledge of such
volumes.
(e)• Buyer's Supplemental Volumes shall not reduce nor be credited toward
r-'1 Buyer's Demand Charge as set forth In Article IV of this Contract
unless hereinafter specified.
AR?ICLE IV
DEMAND CHARGE
1. Without limiting any obligations or rights of Buyer and Seller hereunder,
I Buyer agrees to pay an annual fee to Seller for the availability of gas fuel
service under this Contract (herein referred to as -Demand Charge-). .For
each Contract Year of
the tern herein, the Demand Charge ehc►lk be equal to
the Maximum Annual Volume in effect for such Contract Year multiplied by
j
the Demand Charge Rate of thirty-seven and one-half cents (37,50),
2. Seller shall render to Buyer after the end of each Contract Year an invoice
for the uncredited Demand Charge applicable for such Contract Year and Buyer
shall make payment to Seller for such amount no later than twenty (20) days
from the date Seller's statement is deposited postage prepaid in the United
Stated sail,
7, The Demand Charge due and payable by Buyer to Seiler at the and of each
Contract Year shall be credited as follows: For any Contract Year, buyer
will receive credits toward such Contract Year's Demand Charge, as defined
herein, by deducting the following amounts from the applicable Desand Charge
I
~I
~ B
I
r
t
for such Contract Year.
(a), For Buyer's purchases from Seller during any Contract Year of the tern
i
hereof, excluding any volumes Seller (or its assignee) delivers to
Buyer as allowed under paragreph 4(b) of Article III, Buyer will
receive a credit toward such Contract Year's Demand Charge equal to
the product resulting frou the multiplication of the total of all
MMBtua purchased from Seller hereunder during such Contract Year by
the Base Price applicable to each such MBtu purchased, as such Base
I
Price is defined in Article VIII.
(b). For Buyer's purchases from Seller (or Seller's assignee) during any
Contract Year as allowed under the terms of Article III, paragraph
i
4(b), Buyer shall receive a credit toward the Demand Charge in offset
for such Contract Year during which such gas is purchased, and such
credit shall be equal to the product resulting from the multiplication
of twenty-two cents (22C) by the total of such purchases (in KKBtu)
I ~
during such Contract Year. Notwithstanding anything to the contrary
contained herein, any gas delivered to Buyer through pipelines other
than Seller's pipeline shall never be credited in any way toward
i
Buyer's Demand Charge.
(c). For gas volumes which Bayer pays a transportation fat for under its
Transportation Agreement with Seller during any Contract Year of the
term hereof, buyer will receive a credit toward such Contract Year's
Demand Charge, and such credit shall he equal to the total of all.
applicable 'Transportation Fee(s)' PAIL Seller under the
Transportation Agreement for transportation of such gas volumes during
such year; provLdsd, however, for purposes of crediting hereunder,
I
9
I
M
such Transportation Fee will not include any amounts piid by buyer for
gas lost and unaccounted for, gas used as fuel and gas used in day-
to-day pipeline operations as described in the Transportation
Agreement.
4. Notwithstanding anything to the contrary contained herein, the combined
total amount to be credited toward buyer's Demand Charge during any Contract
Year of the term hereof under paragraphs 7(b) and )(c) of this Article IV
I~~
shell never exceed seventy-five percent (751) of the Demand Charge
applicable to such Contract Year.
5. Buyer shall never be entitled to recoup as gas any of the payments made to
Seller under the terms of this Article IV.
ARTICLg V
QUALITY 1
j 1. Seller shall deliver to Buyer natural gas which is of merebantable quality
and commercially free from water, sand and other objectionable fluids,
solids or gas components, and shall wet the quality requirements as
follows;
I
4 (a). shall have a heating value of not less than nine hundred fifty (950)
{ btus per cubic foot nor greater than one thousand one hundred and
fifty (1,150) Btus per cubic foot;
(b), shall contain no oxygen;
r
(c). shall have a temperature of not mote than one hundred twenty degrees
(1200) Fahrenheit not lass than forty degrees (40') Fahrenheit;
(d). shall not contain more than one-fourth (1/4) grain of hydrogen sulfide
per one hundred (100) cubic feet;
(a). shall not contain more than five (S) grains of total sulphur including
j
I
10
~I
I
{
1
4
not more than one (1) grain of mercaptan sulphur per one hundred (100)
cubic feet;
(f). shall not contain more than three percent (3e) by volume of carbon
dioxide)
(g), shall in no event have a water vapor content in exc,es of seven (7)
pounds per million (1,000,000) cubic feet of gas measured at a
pressure base of fourteen and sixty-five one•hundrodthe (14.65) pounds
~I per square inch absolute and at a temperature of sixty degrees (600)
Fahrenheit.
2. If at any time the gas fails to most the quality specifications enumerated
herein, buyer shall notify Seller and Seller shall make a diligent effort
to correct such failure. If Seller to unable to deliver gas according to
such specifications, buyer may refuse to accept delivery of gas for so long
j as such conditions exist. If such a refusal to the sole cause and makes
it necessary for buyer to completely and totally shut down its plant and
buyer gives Seller written notice of the occurrence of such plant shutdown,
then if Seller falls to correct the quality problem within forty•otght (46)
hours of Seller's actual receipt of the aforesaid written notice and buyer's
Plant has remained completely and totally shutdown during such forty-eight
(46) hour period, buyer shall costive credit against the Demand Charge
applicable to such Contract Year of the term hereof. Said credit shall be
determined as follows: the Demand Charge applicable to such Contract Year
I } shall be divided by the number of days to such Contract Year and the
I
quotient shall be multiplied times the number of days during such Contract
Year that buyer's Plant was so continually shutdown folloving the forty-
eight (48) hour poriod(s) described above.
11
t
M x
ARTICLE VI
DELIVERY AND CONNECTION FACILITIES
1• The point of delivery of gas to be gold and delivered by Seller to Buyer
hereunder shall be at the outlet side of Seller's regulating and metering
stations on the sites of Buyer's Plant or which may hereafter be installed
by Seller at locat'.re which are aNtually acceptable to Buyer and Seller.
Seller agrees that it will operate and maintain such regulating and metering
/ stations, as well as the necessary tap or lateral lines from its main
pipeline system to said regulating and metering stations; and Buyer agrees
that it will furnish to Seller, without charge, suitable space at the point
of delivery for Seller's tap and lateral pipelines, regulating and motoring
stations and appurtenant equipment, and that Buyer will maintain the
E
necessary service lines to connect with Seller's lines at the outlet side
' of Seller's regulating and metering stations. Buyer shall authorize no
~I
person other than an agent of Seller, or a person otherwise lawfully
authorized, to temper with, ii .pact, alter or remove Seller's facilities,
Seller shall have free ingress and egress to and from Buyer's premises for
the construction, maintenance, repair and replacement of Seller's property
i
located thereon, or for any purpose connected with supplying gas hereunder. J
` 2. Seller shall deliver gam hereunder to buyer at the point of delivery at
such reasonably study pressures as may be designated by buyer, of absent
such designation, at pressures which are sufficient to enter buyer's plant
against the prevailing pressures maintsined therein by buyer; provided,
however, taller shall not be required to deliver gas to buyer at a pressure
in excess of 75 paig.
12
i
k
i
~l
E
3, The title to and ownership of the gas delivered hereunder shall pass to
and absolutely vest in Buyer at the point of delivery herein provided. Each
of the parties hereto agrees to use reasonable efforts to promptly notify
the other party of any significant changes in operating conditions which
will affect the delivery and receipt of gas hereunder, and the reasons for
such significant changes. Notwithstanding anything contained herein to the
contrary, in no event shall Seller be required to install new facilities
or to enlarge or modify its existing facilities in order to make deliveries
of gas to Buyer, except to the extent that such facilities are necessary
to deliver the Maximum Hourly Volume of gas hereunder.
4. Subject to the terms and provisions of this Contract, Seller and Buyer
racognito and agree the point of delivery described in this Contract may
be a point at which Seller delivers gas for sale or transportation under
I
! other agreements with Buyer or under other agreements with parties other
than Buyer. It is understood and agreed by the parties that the Maximum
Hourly Volume and the Maximum Daily Volume set forth in Article 111,
paragraph 1 is the cumulative wmimum volume of gas which Seller is
r
obligated to deliver at such point of delivery on any given Day, under (i)
this Contract, (it) the Transportation Agreement herein described and (iii)
any other delivery of gas to Buyer by Seller on behalf of a third party,
AITICLS VII
MEASURKK iT
1. For the purpose of this Contract the volumetric unit of measurement of gas
shall be one thousand (1,000) cubic fast at a pressure base of fourteen and
sixty-five one-hundredths (14.65) pounis par square inch absolute and at
a temperature base of sixty degrees (601) Fahrenheit. Meter measurements
I r ,
13
i ~
4
E
shall be computed by Seller Into such units, adjusted for volume variations
due to pressure and temperature in accordance with the Ideal Cos Law, and
corrected for deviation using daily averages of recorded specific gravity
(determined to throe (3) decimal places) and a value for atmospheric
pressure of fourteen and tour-tenths (14.4) pounds per square inch absolute,
2, the period during which gas is flowing shall be used in determining daily
averages of motored pressure, specific gravity, flowing temperature and
heating value.
3. The gas delivered hereunder shall be measured by means of measuring devices
of standard type with flange connections (installed in accordance with
current Industry standards) which shall be operated and maintained by Seller
at its sole expense, and placed at the aforementioned point of delivery or
in as close proximity thereto as practicable. Motors, and other measurement
instruments and equipment, shall be tested and adjusted for accuracy monthly
i
j by Sailer at Sellers expense.
4. Buyer shall have access to said metering equipment at all times, including
telometr) output signals as long as such access is at no cost to Seller,
but the maintenance, reading, calibration and adjustment thereof shall be
I done only by the employees or agents of Seller. Records from such metering
equipment shall remain the property of Seller and shall be kept on file by
Seller for a period of not less than three (3) years, However, upon request
of Buyer, Seller shall make available to buyer records from its metering
equipment, together with calculations therefrom, for buyer's Inspection and
i
verification, subject to return by buyer within ten (10) days after receipt
thereof.
Buyer may, at its option and expanse, Install and operate meters,
14
I
1
!
instruments and equipment to check Seller's meters, instruments and
equipment, but the measurement of gas for the purpose of this Contract
shall be by Seller's meters only, ex-;*pt as hereinafter specifically
provided. The meters, instruments and equipment installed by Buyer shall
be subject at all reasonable times to inspection or examination of Seller,
but the maintenance, reading, calibration and adjustment thereof shall be
done onl;- by Buyer.
6. Each party shall give to the other party notice of the time of all tests
of meters sufficiently in advance of such tests so that the other party
may conveniently have its representatives present; provided, however, that
if either party has given such notice to the other party and such other
party is not present at the time specified, then the party giving the notice
may proceed with the test as though the other party were present.
7. Meter measurements computed by Salter shall be doomed to be correct except
i
where the measuring device is found to be inaccurate by as much as one
percent (It), fast or slow, or to have failed to register, in either of
which cases Seller shall repair or replace the meter. The quantity of gas
delivered while the meter was inaccurate or failed to register shall be
determined first by the reading of Buyer's check meter, if installed and
in good operating condition, or second, by correcting the error if the
percentage of error is ascertainable by calibration or mathematical
calculation. If it is not so ascertainable then it shall be determined by
estimating the quantity on a basis of deliveries under similar conditions
when the meter was registering accurately, Such adjustment or correction
shall be made only for one-half (1/2) of the period between the test in
which the inaccuracy was discovered and the previous test for accuracy;
I
1S
I
j
f
provided, however, such adjustment or correction period shall not exceed
ninety (90) days.
8. The daily average heating value and specific gravity of the gas delivered
hereunder, shall be determined at Seller's expense by t1e use of recording
devices of standard type, which shall be installed and operated by Seller.
Each device used to determine such average heating value and specific
gravity shall be tested for accuracy by Seller at regular monthly intervals
and should any test show it to be inoperative or recording in error as much
as one-half of one percent (.051), plus or minus, proper correction shall
be made for the period during which the recorder was inoperative or
recording in error, and if this period cannot be ascertained, correction
shall be made to an average of the values recorded during the most recent
fifteen (15) day period prior to the previous test under similar conditions
1 of flow, and such device shall immediately be calibrated to measure as
l
accurately as practicable. The degree of saturation by water vapor of the
gas to be delivered hereunder shall be determined monthly by Saller, using
standard instruments and methods, and the results thereof shall be properly
taken into account in determining the heating value of the gas delivered.
{
9. Seller will asks available to buyer, upon request, a compositional analysis
of gas delivered by Seller to buyer at the point of delivery hereunder,
AITICtg VIII
FRIC9
1. The price payable by Buyer for the gat to be delivered hereunder shall be
determined for each Billing Month by increasing the Base Price in effect
during such month, as set forth below in paragraph 2 of this Article VIII,
by an amount equal to the weighted average price per Mcf, as defined in
16
i
i
i
i I
~l 1
I lil
paragraph 3 of this Article VIII, for all gas purchased by Seller during
much Billing Month; provided, however, that the price payable by Buyer for
the gas to be delivered by Seller to Buyer hereunder is subject to
adjustment for variations In the Btu heat content of the gas in the manner
and to the extcnt set out in Article IX hereof.
2• The Base Price per Mcf for gas to be delivered hereunder shall be as
follows:
(a)• For the Contract Year beginning January 1, 1989 and ending December
31, 1989, the Bass Price par Mcf shall be (t) forty-two cents (42C)
for gas delivered and received hereunder during the Billing Months of
January, February, March, Novem.,er and December and (ti) thirty-eight
cents (38c) for the Billing Months of April through October.
(b). For each Contract Year beginning on or after January 1, 1990, both of
the aforesaid base Prices shall escalate one cent (1C) on January 1
of each such Contract Year.
i
3. The weighted average price of gas purchased by Seller hereunder shall be
determined as follows:
I
(a). The term "weighted average price" of gas purchased by Seller shall
mean the weighted average price per one thousand (1,000) cubic feet
of all gee purchased by Seller during the Billing Month, computed to
J the nearest one-hundredth of one cant ($.0001), and shall be
determined by dividing the total dollar amount paid or accrued on
Seller's books during such Billing Month for all gas purchased by
Seller by the total number of thousands of cubic feet of gas purchased
by Seller during such Billing Month, adjusted to the same pressure
bass as gas sold hereunder, and shall include, in addition to the test
i
17
I
i
4f
of gas itself, all Class A Texas, as hereinafter defined in Article
X hereof, provided, if any portion of the cost of gas (or if any Class
F A Tax) which has been paid by Seller is refunded to Seller, or if
Seller is required by the terms of any gas purchase contract, or of
any agreed settlement of a disputed claim, or by a determination or
judgement of a regulatory body or court having or asserting
jurisdiction, to make retroactive payments with respect to gas which
has been or may be purchased by Seller, or if billing corrections are
made with respact to gas previously purchased by Seller, than such
payments, refunds, or corrections shall be included in Seller's
ll
determination of the weighted average price of gee for the month
during which any such payments, refunds or corrections occur.
(b). It is recognised that some of the gas delivered by Seller to Buyer
hereunder during any month of the term hereof may be gas previously
purchased by Seller which is taken from one of its underground storage
reservoirs, but such gas shall not be considered in determining the
weighted average price of gas purchased by Seller during such month;
I
provided, however, that gas placed in storage by Seller for later
delivery to Buyer or to other customers of Seller shall be accounted
for as gas purchased during the month in which it was actually
purchased by Seller.
4. If at any time following the execution of this Contract by the parties
hereto, Seller's standard method of determining its weighted average price
as described in paragraph 3(a) of Article Vill hereunder is changed from
an Met basis to an MMBtu basis under Seller's standard industrial contracts
as described in the Schedule of Industrial Rates-N, State of Texas, or any
I ,
is
I ~
i
~I
1
i
F
replacement schedule. Seller will notify Buyer of such change and
incorporate that change into the method of determining Buyer's weighted
average price.
ARTICLE It
AD.USTIIENT ►OR HEATING VALUE
If the weighted average heating value of the gas delivered by Seller to
Buyer during Any month is less than one thousand (1,000) Btus per cubic foot,
the price payable by Buyer par Hof of gas computed as provided in Article VIII
hereof shall be deersaaed one-tenth of one percent (O,lt) for each Btu below one
thousand (1,000) Stus per cubic foot; and if the weighted average heating value
of the gas so delivered during any month is more than one thousand (1,000) Stus
per cubic foot, the price payable by buyer per Hof of gas as provided in Article
VIII hereof shall be increased one tenth of one percent (0.1t) for each Btu above
one-thousand (1,000) Btts per cubic foot for such gas so delivered during such
I
month,
ARTICLE I
RIMUMMNT ►OR TAUS AND RIIITAI.B
1. The tern 'tax' or "taxes', as used in this Contract, shall mean any kind
or cbstsater of tax (other than ad valorem, capital stock, general property,
income or excess profits taxes), license, fee, rental or charge of any
governmental authority, including specifically, without limitation by
enumeration, any production, severance, gathering, transportation,
processing, compression, dedication, use, sales, delivery or gross receipts
tax, now or hereafter levied, assessed or made by any governmental authority
on the gas itself ox on the act, right or privilege of production,
severance, gathering, transportation, processing, eomprssa.on, dedication,
19
f
I
i
f
i
i
,
use, sale, handling or delivery of gas which is measured by gross receipts
' or by the volume, value or sales price to Seller or Buyer of the gas in
question, but shall not include any value attributable to the liquid
L hydrocarbons in said gas; providel, however, that the term 'tax' or "taxes'
shall not be deemed to include any general franchise tax imposed on
corporations on account of their corporate existence or on their right to
do business within the State of Texas as a foreign corporation.
2. The terms 'Class A Taxes', 'Class B Taxes' and 'Class C Texas' as used in
this Contract shall have the following meanings, to wit:
(a). The term 'Class A Taxes' shall be construed to mean all taxes, as
herein defined, which Seller pays for the account of or by way of
reimbursement to its gas suppliers with respect to all gas purchased
by Seller,
(b). The term 'Class B Taxes' shall be construed to mean all taxes, ar
herein defined, which are or may be levied upon, and/or paid by
Seller, with respect to the gas sold by Seller to Buyer hereunder,
exclusive of any Class A Taxes or Class C Taxes.
t (c). The taro 'lass C Taxas' shall be construed to mean ■ny license, fee,
rental or charge which is or may be Levied or imposed upon by, and/or
paid by Seller to, any guvernmental authority for the use of its
public streets, alleys and thoroughfares in the cond-lct of Seller's
business, with respect to the Sao sold by Seller to Buyer hereunder
and/or the gross receipts received by Seller from the sale of gas to
buyer hereunder, or any sales or delivery tax which is or may be
levied or imposed upon, and/or paid by Seller, with respect .o the gas
sold by Seller to Buyer hereunder and/or the gross receipts received
20
I
I
3
by Seller from the sale of gas to Buyer hereunder, exclusive of any
Class A Taxes or Class B Taxes.
3• Buyer agrees to reimburse Seller with respect to all class B Taxes and
Class C 'taxes, as herein defined, which are paid by Seller with respect to
that gas sold by Seller to buyer hereunder, including any amounts due for
Demand charges billed hereunder.
4. It is understood and agreed that the amount of reimbursement fur all
existing, new, increased, or additional Class B Taxes and/or Class C Taxes
shall be determined by applying the rate of any such tax measured by gross
receipts, units of volute, value or sales price, to Seller's gross receipts
hereunder or to the volume, value or sales price respectively, of the gas
delivered hereunder; provided, that in the event such taxes cannot be
directly related to the gas delivered hereunder or the gross receipts
received by Seller, as hersinabove provided, the amount of reimbursement
r I
to Seller shall be in the same proportion to the volume of gas sold
hereunder as the total amount of such taxes is to the total volume of gas
sold by Seller to all its customers.
5. It is understood and agreed that in the went any tax, charge or rental
1 for which Seller has been reimbursid or paid by Buyer hereunder is
subsequently declared unlawful, Seller, upon recovery of the amount of such
unlawful tax, charge or rental, shall refund to Buyer the entire amount of
such reimbursement or payment made by buyer to Seller which is recovered
by Seller; provided, however, that Seller shall not be required to make a
refund to Buyer with raspact to any tax, charge or rental so recovered after
this Contract has terminated unless Seller has recovered such tax, charge
or rental prior to such termination.
21
I
i
i
1
p
y `
6. Any amounts due from Buyer to Seller as reimbursement for taxes, charges
or rentals, in accordance with the provisions of this Article K, shall be
paid by Buyer to Seller at the time and in the manner that invoices for gas
delivered hereunder are payable, as provided in Article %I hereof.
ARTICLE II
PAYNOT
1. For the purpose of billing and accounting for gas delivered hereunder, the
terms 'Day, 'Billing Month', and 'Contract Year' shall be as defined in
Article I hereof.
2. On approximately the tenth (10th) Day of each calendar month, Seller shall
render to Buyer at its office in Denton, Texas, statements of the amount
of gas delivered by Seller to Buyer at the point of delivery during the
preceding Billing Month, and shall also render an invoice for the gas sold
hereunder and an allocation statement for all the gas so delivered. In
computing much invoice for gas sold hereunder by Seller to Buyer during any
Billing Month, the weighted average price of gas purchased by Seller during
such Billing Month, as determined in accordance with paragraph 3 of Article
VIII, shall be used, Buyer shall make payment to Seller at Seller's office
i in Dallas, Texas for all gas delivered hereunder to buyer during the
j
preceding Billing Month by no later then twelve (12) days frou the date
i
Seller's stAteuent is deposited postage prepaid in the United States mail
or in case of hand delivery, within ten (10) days from the data Seller's
statement is delivered to a representative of Buyer from a representative
of Seller,
3. If Buyer should fail to pay any amount owing to Seller when the seas is
' due, interest thereon shall accrue at the rate of eighteen percent (181)
22
t
i
{
t
per annua from the date when such amount is due until same is paid;
provided, howaver, no interest shall accrue on unpaid amounts when failure
to make payment is the result of a bona fide dispute between the parties
hereto regarding such amounts and Buyer timely pays all amounts not in
dispute. If such failure to pay continues for sixty (60) days, Seller may,
in the absence of any bona fide dispute as to the amount or the time when
same was due, suspend deliveries of gas hereunder, and the exercise of such
right shall be in addition to any and all other remedies available to
Seller; provided, however Seller shall be entitled to suspend deliveries
of gas hereunder in the avant Buyer fails to pay any and all amounts not
In dispute.
4. Each pActy shall have the right at reasonable hours to examine the books
and records of the other party to the extent necessary to verify the
accuracy of any statement, payment, calculation or determination made
pursuant to the provisions hereof. If any such examination shalL reveal,
or if either party shall discover, any error or inaccuracy in its own or
the other party's statements, payments, calculations or determinations, then
proper adjustments and corrections shall be made a promptly as practicable
I
thereafter; provided, however, that no ad)ustaent or correction shall be
made with respect to any error or inaccuracy which occurred more than two
(2) years prior to the discovery thereof.
5. All notices, billings, and payments provided for herein shall be in writing
and shall be deemed to be delivered (except for when actual receipt of
notice is expressly required herein) when properly addressed to the other
1 party as indicated below, and deposited in the United State mail, postage
prepaid.
27
I
3
III
SELLER: BUYER:
Pament, Lone Star Gas Company City of Denton, Texas
301 South Harvood Street Municipal Building
Dallas, Texas 73201 Denton, Texas 76701
Attn: Utility Related :ttn: Executive Director
Credit Croup of Utilities
Notices. Lone Star Gas Company
301 South Harwood Street
Dallas, Texas 75201
Attn: Cam Marketing Division
ARTICLE III
TERM
Subject to the other terns and provisions hereof, this Contract shall
be effective from the date set forth heteinabove and shall thereafter continue
and remain in full force and effect for a period and tern extending to tvelve
(12:00) o'clock midnight on December 31, 1993 and year to year thereafter until
cancelled by either party upon one hundred and tventy (120) days prior written
notice to the other party.
{ ARTICLE ]LIII
FORCE XAJEULI
1. In the event of either party hereto being rendered unable, vholly or in
j part, by force maleure to carry out its obligations under this Contract,
other than to make payments due hereunder, it is *Stood that on such party
giving notice and full particulars of such force maseurs in vriting to the
other party as soon as possible after the occurrence of the cause relied
on, then the obligations of the party giving such notice, so far as they
are affected by such force majaurs, shall be suspended from the inception
and during the continuaaus of any inability so caused but for no longer
24
j
it
I,
I~
i
,
period, and such cause shall be as far as possible remedied with all
reasonable dispatch. 'fie term 'force majeure' as employed herein shall mean
acts of Cod, strikes, lockouts or other industrial disturbances, acts of
the public enemy, wars, blockades, insurrections, riots, epidemics,
landslides, lightning, earthquakes, fires, storms, floods, washouts,
arrests, orders, directives, requirements and restraints of governments and
governmental agencies, either federal or state, civil and military, any
application of governmental conservation rules and regulati-)ns, civil
disturbances, explosions, breakage or accident to machinery or lines of
pipe, the necessity for making repairs to or alternations of machinery,
h equipment or lines of pipe, breakage of transmission lines, failure of
electric equipment due to sleet, ice or other unavoidable causes, accidents
to or failure of electric substations, transformers or switching devices,
shortage of water, freesing of gas wells or lines of pipe, partial or entire
k failure or loss of wells and/or sources of gas supply, and any other causes,
whether of the kind herein enunerated or otherwise, not within the control
of the party claiming suspension and which by the exercise of due diligenea
such party is unable to prevent or overcome. Such term shall also include
the inability to acquire, or the delays in acquiring, at reasonable cost
and after the sxerciss of reasonable diligence, any servitudes, right of
way grants, permits or licenses required to be obtained to enable a party
to fulfill its obligation hereunder.
2. It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the discretion of the party have the difficulty,
and that the above requirements that any force majeurs shall be remedied
with all reasonable dispatch shall not require the settlement of strikes
25
or lockouts by acceding to the demands of opposing party when such course
is inadvisable in the discretion of the party having the difficulty.
ARTICL8 IIV
CURTAIi.l M 01 DILIVIRIts
1. Seller does not guarantee a continuous, uninterrupted supply of gas to
Buyer hereunder and, subject to the provisions hereinafter set forth in
this Article %IV, Seller shall have the right to interrupt or curtail the
supply of gas to Buyer, in whole or in part, if in the judgment of Seller
a continuance of the supply of gas to Buyer under this Contract would
jeopardize or threaten service to Seller's domestic, commercial or
industrial customers who are accorded a higher priority of service by the
Railroad Commission of Texas. Notwithstanding anything to the contrary
I
contained herein, refusal or inability by Seller to supply gas to Buyer in
excess of Seller's obligations provided for in Article III herein shall not
constitute a curtailment of the supply of gas to Buyer hereunder for
purposes of paragraph 4 of this Article IIV.
2. Buyer and Seller recognize the "act that each is engaged in rendering a
service which is essential to the public health and safety and both consider
the continuity of Buyer's fuel supply essential to the public welfare;
therefore Seller agrees to exercise due diligence in making reasonable
advance preparations to enable it to provide. reasonably continuous service
to Buyer, and Buyer agrees that it will provide an adequate quantity of
standby fuel and equipment to meet its fuel requirements during periods when
the gas supply hereunder may be curtailed pursuant to this Article XIV.
3. Vithin approximately ten (10) days after the end of any curtailment of gas
deliveries by Seller, Buyer shall notify Seller in writing regarding the
i
26
I
i
amount of gas which was actually curtailed for any reason, including force
majeure, and the details of the computation of such amount, and Buyer's
determination of the amount of such curtailment shall become final and
binding on both parties unless protested in writing by Seller within ten
(10) days after receipt by Seller of such notification.
4. Notwithstanding anything to the contrary contained herein (except for the
provisions of paragraph 1 of this Article XIV), in case of interruption or
curtailment of service, as provided for in this Article XIV, including
curtailment by reason of force majoitra as defined in Article XIII hereof,
the amount of gas which was actually curtailed during any Contract Year
shall be added to the amount of gas actually purchased and received by Buyer
during such Contract Year for the purpose of determining Buyer's credits
against the Demand Charge applicable to such Contract Year, as calculated
in accordance with the provisions of Article IV, paragraph 4(a) of this
Contract; provided, however, only gas curtailed under this Contract shall
I
receive credit against the Demand Charge for any Contract Year of the tern
hereof.
S. Buyer and Seller recognize the fact that Buyer requires one million
i
_J (1,000,000) cubic feet of gas each day for plant protection gas, and Buyer
and Seller agree that during periods of curtailment Buyer shall be allowed
to take one million (1,000,000) cubic feat per day for p'Ant protection gas;
provided, however, that buyer shall not be allo,red to take such gas during
periods of time in which it is necessary for Seller to curtail the supply
of gas to other industrial customers of Seller in the sage curtailment tone
in which Buyer's plant is located who are accorded by Seller a priority of
service equal to that provided in Railroad Commission of Texas Gas Utilities
I
f 27
I
i
I
I~
~1
i
Docket No. 496 for service to "(2), Large commercial (100 Mef or more on
a peak day) and industrial requirements for pilot lights and plant
protection gas* under category 'B. Industrial Rats 1.0
ARTICLE Iio
REGUTATORT BODIES
1. rhis Contract and all operations hereunder are subject to the applicable
federal and state law and the applicable ordinances, orders, rules and
regulations of any local, state or federal governmental authority having
or asserting jurisdiction; but nothing contained herein shall be construed
as a waiver of any right to question or contest any such law, ordinance,
order, rule or regulation in any forum having jurisdiction over sane.
2. In the event either Buyer or Seller shall be required by a judgment or
order of any governmental authority having or asserting jurisdiction to
either pay or charge prices for gas sold by Seller to Buyer hereunder which
are higher or lower than the prices stipulated or provided for herein with
respect to gas sold by Seller to Buyer hereunder, the party adversely
affected shall have the option of cancelling this Contract upon giving the
other party written notice of Its intention to do so within ninety (90) days
I i
- after the date of such judgment or order, which cancellation shall become
effective at the and of six (6) months from and after the date of such
notice.
ARTICLE Zvi
TRRXIXATIOM PRIVILEGE
1. If either party hereto shall fail to perform any of the covenants or
obligations imposed upon it under and by virtue of this Contract (except
where such failure shall be excused under any of the provisions of this
I
26
i
i
c
Contract), then in such event the other party may, at its option, terminate
this Contract by proceeding as follows: The party not in default shall
cause a written notice to be served upon the party in default, stating
specifically the cause for terminating this Contract and declaring it to
be the intention of the party giving the notice to terminate the same;
whereupon, the party in default shall have thirty (30) days after the actual
receipt of this aforesaid notice in which to remedy or remove the cause or
causes of default stated in the notice of termination, and if within said
` period of thirty (30) days the party in default does so remedy and remove
said cause or causes than such notice shall be nullified and this Contract
shall continue in full force and effect. In case the party in default does
not so remedy and remove the cause or causes of default within said period
of thirty (30) days than this Contract shall terminate and become null and
void upon the expiration of said period.
2. Should Buyer obtain from any court, administrative or regulatory authority
an order directing seller to continue gas service after expiration of this
{ Contract, or after Seller's termination of this Contract or gas service
hereunder pursuant to any provision contained berain, such continued gas
service shall be at a price and upon terms mutually agreeable between Buyer
and Seller unless said order contains a specific
prohibition to the
contrary.
3. Any cancellation of this Contract pursuant to the provisions of this Article
XVI shall be without prejudice to the right of the party not in default to
collect any amounts then this it and without waiver of any other remedy to
which tho party not in default may be entitled for violation of this
Contract,
24
I
i
4
ARTICLE RVII
INTAASTAT= PROVISIONS
Each party warrants to the other that its facilities utilized for the delivery
and acceptance of gas hereunder are wholly intrastate facilities and are not
subject to the Natural Qas Act of 1938, as amanded. As a material
representation, without which both parties would not have been willing to execute
this Contract, each party warrants to the other party that it will take no action
or commit an act of omission which will subject its facilities, this transaction,
or the other party's facilities to jurisdiction of the Federal Energy Regulatory
Commission (FERC) or its successor governmental agency under the terms of the
Natural Gas Act of 1938, as amended. The gas delivered and accepted hereunder
shall not have been nor shall be sold, transported or otherwise utilized in
interstate commerce in a manner which will subject either party to the torsi of
the Natural Gas Act of 1938, as amended. In addition to and without excluding
h
any remedy the aggrieved party may have at law or in equity, the party who
breached the above warranties and representations shall be liable to the
aggrieved party for all damages, injury and reasonable expense the aggrieved
party may sustain by reason of any breach hereof. Further, should either party
perform any act, or cause any act to be performed, at any time, that results in
any gas covered hereunder becoming regulated by or subject to the jurisdiction
of the FERC or successor governmental authority under the Natural Gas Act of
1938, this Contract shall be doomed of its own torsi to torsinate on the Day
before the date of such occurrence; provided, however, such termination shall
never be construed to impair any right arising under this pars.orRph,
I
I
30
E I
I JI
I
I I
I I
I
v
ARTICLE IVIII
VARRANTT
Seller hereby warrants to Buyer that at the time of delivery of gas hereunder
it will have good title or the right to deliver such gas, and that such gas will
be free and clear of all liens and adverse claims; and Seller agrees with respect
to the gas delivered by it, to indemnify Buyer against all suits, actions, debts,
accounts, damages, costs (including attorneys' fees), losses and expenses arising
from or out of any adverse claims, relating to Seller's title, of any and all
persons to or against said gas.
ARTICLE LIZ
RICUT-07•WAT
Buyer hereby grants to Seller the right to lay and maintain pipelines and to
install metering stations and other necessary equipment at the point of delivery,
as provided for in Article 11 hereof, solely for the purpose of supplying gas
hereunder, and such lines and other equipment placed by Seller at said point of
delivery shall remain the personal property of Salter, and, subject to the terms
j of this Contract, may be removed by Seller at any time.
ARTICLE RZ
INDEWITT
As between the parties hereto, Seller shall be in control and in possession of
i
gas delivered hereunder and responsible for any damages or injuries caused
thereby until the same shall have been delivered to Buyer at the point of
delivery and shall indemnify and hold buyer harmless from any damage or injury
caused thereby while mama is in Seller's possession, except injuries and damages
I which shall be occasioned proximately by the negligence of Buyer, After such
delivery of gas at the point of delivery hereunder, Buyer shall be deemed to be
31
i
r 3
t
In exclusive control and possession thereof and responsible for any injuries or
damages caused thereby, and shall indemnify and hold Seller harmless from any
damage or injury caused thereby while Same is in Buyer's control and possession,
except injuries and damages which shall be occasioned proximately by the
negligence of Seller.
ARTICLE RxI
WAIVER Of BREACH
No waiver of either party hereto of any one or more breaches, defaults or
right(s) under any provisions of this Contract shall operate or be construed as
a waiver (continuing or otherwise) of any other breaches, defaults or right(s),
whether of a like or of a different character,
ARTICLE V it
ASSICUULUT
This Contract shall be binding upon the parties hereto and their respective
k successors and assigns. All or any part of the rights or obligations of either
party hereto may be at any time assigned, but any such asst ent w
g~ ~ Mess
accepted in writing by the other party hereto, shall not relieve the assignor
1 of its obligations hereunder, in the event the assignee shall fail to perform
k
the same in accordance with the terms hereto; provided, however, consent to such
assignment would not be unreasonably withheld,
ARTICLE MIX
UISCLLLAMEOUS
i~ 1. The captions o:• headings preceding the various parts of this Contract are
inserted and included solely for convenience and shall never be considered
or given any affect in construing this Contract or any part of this
Contract, or Iii connection with the intent, duties, obligations or
i
32
r
tl
i
4
liabilities of the respective parties hereto.
2. Buyer and Seller agree that this Contract will be construed according to
the laws of the State of Texas.
3, This Contract constitutes the entire agreement b%tween the parties covering
' the subject matter hereof, and there are no agreements, modifications,
conditions or understandings, written or oral, expressed or implied,
pertaining to the subject matter hereof which are not referenced or
( contained herein.
4. Nothing contained in this Contract shall prevent Seller from (i) terminating
or allowing the termination or expiration of any of its existing or future
gas supply contracts, or (ii) entering into any amendment, modification,
renewal, extension or replacement of, or any accord and satisfaction under,
i
any existing or future gas purchase contract or contracts between Seller
and its gas suppliers.
IN WITNESS WHEREOF, this Contract has been executed in duplicate
originals by the parties hereto on the day and year first herein written.
ATTEST: SELLER:
LONE STAR CAS COMPANY,
i
a Division of ENSERCM CORPORATION
i By.,
J. R, Moore
Vice President
ATTEST: BUYER:
CITY OF DENTON, TEXAS
By:
f
I i!I
33
I
k`
{
THE STATE OF TEXAS(
COUNTY OF DALLAS (
BEFORE ME, the undersigned authority on this day personally appeared J.
R. Moore, Vice President of LONE STAR GAS COMPANY, a division of ENSERCH
CORPORATION, a Texas corporation, known to me to be the person and officer whose
name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in the
c ~
capacity stated, and as the act and deed of said corporation.
Given under my hand and seal of office this - day of
19-
1 Notary Public in and for the State
of Texas. My comission expires
THE STATE OF TEXAS(
COUNTY OF DALLAS
BEFORE ME, the undersigned authority on this day personally appeared
a municipal
corporation, known to me to be the person and officer whose nape is subscribed
to the foregoing instrument and acknovledged to me that he executed the sage for
J the purposes and consideration therein expressed, in the capacity stated, and
as the act and deed of said corporation.
Given under my hand and seal of office this _ day of
19~
Notary Public in and for the State
of Texas. My comission expires
74
i i
i
I~
6
R
6
1
L,S•T•MC•s
GAS TRANSPORTATION AGREEMENT
THIS ACREEMENT, made and entered into the 1st day of January, 1989 to be
effective with the date of initial. deliveries hereunder, by and between LANE
STAR CAS COMPANY, a Division of ENSFRCH Corporation, a Texas corporation,
hereinafter referred to as "Transporter" and CITY OF DENTON, a municipal
corporation, hereinafter referred to as "Shipper";
1[1ItlB8~ETS:
WHEREAS, Shipper owns or controls certain quantities of natural gas and
desires that Transporter (a) receive gas from Shipper (or its designee) at the
Point(s) of Receipt hereinafter set forth and (b) deliver equivalent
quantities of gas to the Point of Delivery hereinafter set forth: and
i
WHEREAS, Transporter owns and operates a pipeline system and is willing to
transport gas for Shipper under the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions herein contained, Transporter and Shipper hereby agree as follows:
ARTICLE L.
OUAKITY
1,1 Shipper represents that from time to time it may desire for
Transporter to receive and deliver gas at the points hereinafter set forth in
1 quantities to agreed to by the parties. It is agreed that the volume of gas to
be transported under this Agreement will not exceed a daily volume of twenty-
five thousand (25,000) Ref unle.: mutually agreed to by the parties hereto.
Transporter's obligation to deliver gas to Shipper under any and all agreements
between Transporter and Shipper, including but not limited to this Agreement,
shell not exceed a daily volume of thirty thousand (30,000) Mcf. It is further
j I
1
I
i
I
1
4
1t.
1
hereby agreed that the calculation of all quantities of gas received and
delivered hereunder shall, for all purposes, including, but not limited to,
payment and determination of imbalance and retention volumes. be on an HMEtu
basis. Transporter's recoipt and delivery of such gas transportation volumes
will be done on a best efforts basis subject to Transporter's existing or
future pipeline capacity, system transmissibility and operating capabilities;
and Transporter may refuse to transport gas hereunder if in the reasonable
opinion of Transporter to do so would adversely affect Transporter's sales
service to rrstdential and commercial customers and other priorities of sales
service established by the Railroad Commission of Texas, or any succ.ssor
thereto. Transporter will In good faith endeavor to receive and deliver such
gas and will not arbitrarily and capriciously refuse to transport gas on behalf
of Shipper hereunder.
1.2 It is recognized that a day-to-day balance of gas received by
Transporter snd delivered to Shipper may not be possible due to the inability
of the parties to control precisely such receipts or deliveries. However,
Transporter, co the extent practicable, will deliver to Shipper oath day a
k
f quantity of gas equivalent to nicety nine percent (99%) of the quantity of gas
received by Transporter from Shipper (or its designee). Transporter shall
retain the one percent (11) balance of the quantity of gas received as normal
gas lost, gas used as fuel and gas used in day-to-day pipeline operations (the
'Retention Volume'). An imbalance shall exist hereunder where there is a
numerical difference between the quantity of gas delivered by Transporter to
Shipper; exclusive of (i) the total of the volumes of gas delivered under the
Cas Sales Contract between Transporter and Shippar dated January 1, 1999,
(hereinafter referred to as the 'Cas Sales Contract') (ii) the total of any
volumes of gas delivered by Transporter to Shipper at the point of Delivery
2
I
I
[ e A
1 e
I
i
specified herein, under transportation agreements between Transporter and other
third parties, and (iii) the Retention Volume; end the quantit;, of gas received
by Transporter from Shipper (or its designee) during any month, and any such
imbalance shall be corrected insofar as practicable during the month following
the month in which It occurs; provided, however, should Shipper fail, by the
end of any month of the terra hereof to make up a prior month's imbalance due
Transporter, the cumulative imbalance, as hair inafter defined, owed Transporter
by Shipper shall be deemed to be sold to Shipper by Transporter in accordance
i
with the terms and conditions of the Cas Sales Contract during the most recent
Billing Month, and thereafter such cumulative imbalance shall be accounted for
and construed for all purposes as gas sold under the We Sales Contract, For
the purposes of this paragraph, the term 'cumulative imbalance' shall mean the
sum of (1) any imbalance due Transporter and carried forward from an
immediately preceding month to the next succeeding month, plus (ii) any
imbalance due Transporter based on tha delivery and receipt of gas hereunder
during such succeeding month.
1,3 At least two (2) working days prior to the first calendar day of each
month during the term hereof, Shipper and/or its designee shall notify
Transporter of tha volumes of gas Shipper nominates for transportation at each
1
active Receipt and Delivery Point under this Agreement, Each such
transportation nomination shall contain Shipper's nominated maximum quantities
for each applicable Receipt and Delivery Point, designation of the appropriate
contract(s) covering such gas, and the identity by name and telephone number of
individual(s) who have authority to confirm the nominated gas volumes at each
Receipt and Delivery Point, Timely nominations may be given by verbal notice;
provided, however, Shipper shall furnish written canfirmation thereof within
I
five (S) business days of the date of such verbal notice. Shipper and/or Its
3
I
,
f
designee may revise nominated quantities on any business day upon verbal
notice of any such reduction of nominated quantities. Such verbal notice must
be received by Transporter prior to 12:00 noon C:i'.as time of any business day
to be effective the next succeeding business day. If Shipper and/or its
designee does not furnish transportation nominations as required herein for
any month during the term hereof, Transporter may interrupt transportation
service hereunder for such month and such interruption of service shall not
prevent enforcement by Transporter of any other of its legal rights or remedies
nor be construed as a breach of Transporter's obligations hereunder. If
Shipper and/or itr designee does not nominate any transportation volumes as
foresaid for twelve (12) consecutive months during the term hereof.
Transporter, upon thirty (30) days' prior written notice to Shipper, may
terminate this Agreement and all rights and obligations hereunder; provided,
however, the obligation to make payment for monies due hereun4er shall not be
extinguished. Shipper shall be entitled to assign any or all such nomination
obligatLon(s) to a third-party ("Shipper's designee') upon thirty (30) days
prior written notice to Transporter.
ARTICLE II.
LOCATIONS OF POINTS OF RECEIPT AND DE1,IM
2.1 Receipt Point: Gas delivered by Shipper (or its designee) to
Transporter hereunder shall bs delivered at points which ate sometimes herein
referred to as the 'Receipt Point(s)' or 'Point(s) of Receipt' and which are
specifically set forth and identified in Exhibit 'A', entitled 'Transporter
Receipt Point(s)', which is attached hereto and is hor,.br incorporated in this
Agreement and made a part hereof for all purposes. It is agreed that
additional prints to be established hereunder, pursuant to paragraph 2.3, will
be subject to Transporter's approval which shall not be unreasonably withheld.
4
f
G
y
c
H
w
2.2 Delivery Point: Cas transported by Transporter hereunder shall be
delivered to Shipper (or for its account) where gas first passes from
Transporter's metering equipment Into Shipper's Spencer Steam Electric Station
in Denton, Texas (sometimes heroin referred to as. "Point of Delivery') or other
points as provided In the Transfer of Cgs Agreement between, Transporter and
Shipper dated May 1, 1989,
2.3 Additional Points: It is understood by both parties that Shipper and
Transporter may mutually agree in writing to establish other Receipt Points
hereunder; provided, however, Transporter shall not be obligated to establish
new Receipt Points more frequently than once every two (2) months, unless due
to circumstances beyond Shipper's control Shipper (or Its designee) is unable
to supply gas to the original Receipt Point(s) hereunder, In such event, and
i
upon receipt by Transporter of documentation satisfactory to Transportar
verifying such event and Shipper's inability to remod; same, Transporter may,
I
in its sole discretion, agree to establish an additional Receipt Point. In the
event Shipper desires that Transporter receive gas at a proposed point(s).
Shipper shall notify Transporter in writing of such proposed point(s),
including In such notice estimated maximum drily delivery volume(s) at such
1 point(s) and the location(s) thereof and Shipper shall therein warrant that the
- quality of gas to be received at such proposed
point(s) moots the quality
specifications as defined herein and that such gas and such ;-roposed point(s)
meat the requirements of Article Vi, paragraph 2 of this Agreement and all
r~ other applicable terms and conditions contained In this Agreement. Transporter
will promptly evaluate each point ■nd if such Receipt Point(s) is an
established Receipt Point on Transporter's pipeline system, will notify Shipper
within ten (10) working days of Transporters receipt of Shipper's notice,
unless otherwise mutually agreed to by the parties hereto, whether or not
S
~1
Transporter is able to accept gas from Shipper's proposed new Receipt Point(s)
If such Receipt Point(s) is not an established Receipt Point(s) on
Transporter's pipeline system, Transporter will notify Shipper within thirty
(30) days of Transporter's receipt of Shipper's notice, unless otherwise
mutually agreed to by the parties hereto, whether or not Transporter is able to
accept gas from Shipper's proposed new Receipt Point(s). In the event
Transporter anticipates the inability to complete raid evaluation within the
specified ten (10) and/or thirty (30) day periods, Transporter will promptly
notify Shipper and provide the status of and estimated completion date of the
required evaluation; provided, however, no additional Receipt Point(s) will be
established hereunder without prior .mitten agreement between Shipper and
Transporter, Upon Transporter's agreement to establish any additional Receipt
Point(s) pursuant hereto, Exhibit "A" shall be revised to reflect the
additional Receipt Point(s).
ARTICLE 111.
PRESSURES AT PQIh":e OF RECEIPT AND DELIYEaY
3.1 Shipper and/or its designee shall deliver gas to Transporter at the
Receipt Point(s) at pressures sufficient to enter Transporter's pipeline system
at such point; provided, however, that Shipper's delivery pressure into
Transporter's system at the Receipt Point(s) shall not exceed Transporter's
maximum allowable operating pressura at any such point.
3.2 Transporter shall deliver gas to Shipper at Transporter's operating
pressure at the Delivery Point, provided, however, Transporter shall not be
obligated to delivery gas at a pressure in excess of seventy five (15) prig
into Shipper's Spencer Steam Elactric Station in Denton, Texas.
1
6
lil I
r
ARTICLE 1Y
RATES
4.1 Shipper shall pay Transporter for services renderea hereunder at the
rates set forth below commencing with initial deliveries of gas hereunder.
(a) if during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average volume of gas less than, five thousand (5,000)
Mcf per day during such Billing Month, the fee charged hereunder shall be
! twenty cents (20C) for each MMBtu delivered hereunder at the Delivery
Point, after allowing one percent (11) reduction in such delivered
volumes for gas lost and unaccounted for, gas used as fuel, and gas used
in day to day pipeline operations pursuant to Article 1, paragraph 1.2.
(b) If during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average volume of gas greater than or equal to five
thousand (5,000) MeE per day, the fee charged hereunder shall be fifteen
cents (15C) fcr each MMBtu delivered hereunder at the Delivery Point,
after allowing one percent (11) reduction in such delivered volumes for
gas lost and unaccounted for, gas used as fuel, and gas used in day to day
j pipeline operations yursuant to Article I, paragraph 1.2,
J (c) It is agreed by the parties hereto that the fees charged in
paragraphs (a) and (b) above shall escalate one cent (1C) per MMBtu
beginning on January 1, 1990, and annually thereafter during the tern of
this Agreement,
r~ (d) It is understood and agreed by the parties that the rates provided
for herein have been reached through arms length negotiations and that
neither party had an unfair advantage during the negotiations thereof,
However, should the appropriate regulatory agency find such rates to be i
unreasonable for any reason or in any way in violation of any provision of
7
IfI
i
i
x 41
II~
law, and determine a rate lower than that provided for heroin, Transporter
say terminate this Agreement upon giving Shipper written nctice of its
intention to do so within sixty (60) days after the Jets of such judgement
or order, which cancellation shall become effective at the and of thirty
(30) days from and after the date of such notice. Should the agency
determine a rate higher than that provided for herein, Shipper may
terminate this Agrei.menc upon giving Transporter vritcen notice of its
Intention to do so within sixty (60) days after the dolts of such judgement
or order, which cancellation shall become effective at the end of thirty f~
1
(30) days from and after the date of ouch notice.
(a) Shipper agrees to reimburse Transporter for any Taxes as defined In
Section S of GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX 'A'.
ARTICLE V.
TE81i
5.1 This Agreement is effective as of January 1, 1989, and shall remain
in full force and effect for a primary term extending through necember 31,
1493, subject to the terms and provisions hereof, and month to month thereafter
until cancelled cy either party giving tte other party thirty (30) days' prior
write a notice. Notwithstanding anything contained herein to the contrary, in
the event of termination or cancellation of the Cas Sales Contract,
Transporter shall have tts right, to terminate this Agreement by giving Shipper
one hundred (100) days notice of such teruination. Notwithstanding the above,
if an imbalance in deliveries ex.sts on the date of termination hereof between
the quantities theretofore delivered at the Receipt Point(s) and Delivery
Point, the term of this Agreement shall be extended for a period sufficient to
allow the party vhoss deliveries are in ares.trs to eliminate promptly any
deficit. Provided further, any termination, cancellation or expiration of this
g
I~
i
Agreement shall never operate to extinguish the obligation to make payment for
monies due hereunder,
5.2 In the event that on or before January 1, L990, deliveries of gas for
transportation hereunder have not commenced, than in such event and
thereafter, until such deliveries are tendered and accepted, Transporter may
cancel this Agreement by giving Shipper thirty (30) days' prior written notice
of such cancellation.
ARTICLE VI.
LAWS &ND REGULATIONS
6,1 This Agreement shall be subject to all applicable State and Federal
laws, and orders, directives, rules and regulations of say governmental body,
official or agency having jurisdiction.
6.2 Each party warrants to the other that its or its agent's facilities
utilized for the delivery and acceptance of gas hereunder are wholly intrestata
facilities and are not subject to the Natural Gas Act of 1938, at heretofore
amended. As a material representation, without which both parties would not
have been willing to execute this Agreement, each party warrants co the other
j
party that it will take no action nor commit any act of omission which will
subject its facilities, this transaction or the other party's facilities, to
jurisdiction of the Federal Energy Regulatory Commission or its successor
governmental agency under the terms of the Natural Gas Act of 1918, as amended.
The gas delivered and accepted hereunder shall not have been nor shall be sold,
transported, or otherwise utilized in interstate commerce in a manner which
will subject either party to the terms of the Natural Gas Act of 1938, as
amended. In addition to and without excluding any remedy the aggrieved party
may have at law or in equity, the party who breaches the above warranties and
representations shall be liable to the aggrieved party for all damages, injury
9
f
i
e
and reasonable expense the aggrieved party may sustain by reason of any breach
hereof. Further, should either party perform any act, or caose any action to
be performed, at any time, that results in any gas covered hereunder becoming
regulated by or subject to the jurisdictional consequances of the Natural Gas
Act of 1938, as emended, or successor governmental authority contrary to this
agreement, this agreement shall be deemed of its own terms to terminate on the
day before the date of such occurrence; provided, however, such termination
shall never be construed to impair any right under this paragraph.
ARTICLE Vli,
GENERAL TERMS AND COND1TIQjig
7.1 The GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX •A' are
i
incorporated herein and made a part hereof by this reference.
ARTICLE VI11.
;;;4GEL~aNFnl~c
8.1 This Agreamen: shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be transferred or assigned by either party
without the prior written consent of the other party, which shall not be
I
unreasonably withheld. Any purported transfer or usignment without such
consent shall be null and void and shall not operate to relsasu the transfarror
or assignor from its obligations hereunder.
8,2 Any notice, request, demand, statement or payment provided for in
this Agreement may be given in writing directed to the party to whom given and
mailed or delivered at such party's address as follows!
City of Denton
Hunicipsl Building
Denton, Texas 76701
Attn: Executive Director of Utilities
10
~I
I
S
(Notices) (Payments)
Lone Star Cam Company Lone Star Gas Company
301 S. Harwood Street 301 S. Harwood Street
Dallas, Texas 75201 Dallas, Texas 75201
ATTN: Transportation Department ATTN: Utility Related Credit
Croup
or at such address as each party may by like notice give to the other, Such
mailed notices shall be deemed to have been given when deposited in the United
/ States mail (first class, registered or certified), postage prepaid, or in the
tote of hand delivery, when accepted by a representative of either party from a
representative of the other party.
i
8.3 This Agreement constitutes the entire agreement between the parties
covering the subject matter hereof, and there are no agreements, modifications,
h
conditions or understandings, written or oral, express or implied, pertaining
to the muSJect matter hereof which are not contained herein.
8,4 Modifications of this Agreement shall be or become effective only
upon the mutual execution of appropriate supplemental agreements or amendments
hereto by duly authorized representatives of the respective parties,
!
ACCEPTED AND AGREED to this day of 1969.
i
LONE STAR CAS COMPANY, a Division CITY OF DENTON
of ENSERCH Corporation
By By
Title Title
Attest: Attest:
i
By By
y
i
11
j ~
I ,
i
d
e~
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared a,
of a corporation, known to
me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and dead of
said corporation.
GIVEN UNDER NY NAND AND SEAL OF OFFICE, this the day of
_ A.D., 19_
I
Notary Public in and for
County,
My commission expires tha
day of 19
i
STATE OF TEXAS
COUNTY OF DALLAS
BEFORE ME, the undersigned authority, a Notary Public in and for the
State of Texas, on this day personally appeared W. F. Voidler. Jr.._ Vice
President of LONE STAR GAS COMPANY, a Division of ENSERCH Corporation, a Texas
corporation, known to as to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated,
and as the act a,id deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
A.D. 19_
Notary Public in and for
the State of Texas
I~
12 ~
I
i~
SHEET NO, 1
APPENDIX "A"
GAS TRANSPORTATION AGREEMENT
GENERAL TERNS AND CONDITIONS
1. Definitions
(a) "Cas" shall mean natural gas produced from gns wells, vaporized
natural gas liquids, gas produced in association with oil (casinghead gas)
and/or the residue gas resulting from processing cssinghead gas and/or gas
well gas.
(b) "Day' shall mean the 24-hour period beginning at 7:00 a.m., Dallas
time, on one calendar day and ending at 7:00 a.m., Dallas time, on the
following calendar day.
!
(c) "Month" or "Billing Month" shall mean the period beginning at 7:00
a.m., Dallas time on the first day of a calendar month and ending at 7:00 a.m.,
Dallas time, on the first day of the succeeding calendar month.
(d) "Year" shall mean a period of twelve (12) consecutive months
beginning at 7:00 a.m., Dallas time, on January 1 of each calendar year of the
term hereof and ending at 7:00 a.m, Dallas time, on the sane date of each
succeeding year during the tern hereof.
(e) "Mcf" shall mean one thousand (1,000) cubic feet.
/-1 (t) The term *Btu" as used herein shall mean British Thermal Unit anJ,
where appropriate, tt.e plural thereof. The term "MMBtu" shall mean one million
(1,000,000) Btu.
(g) "Heating Value" or "Heat Content" shall mean the total beating value
expressed in Btu per cubic foot (gross heating value) of the gas delivered
hereunder, and shall be determined at it temperature of sixty (60) degrees
Fahrenheit, saturated with water vapor and under a pressure equivalent to that
i
F
l
t SHEET NO. 2
of thirty (30) inches of mercury at thirty-two (32) degases Fahrenheit
converted to base conditions of sixty (60) degrees Fahrenheit and an absolute
pressure of fourteen and sixty-five one hundredths (14,65) pounds per square
inch and adjueted to reflect actual water vapor content,
(h) "Pita" shall mein pounds per square inch absolute.
(L) "Psig" shall mean pounds per square Inch gauge,
(j) "Point of Receipt" or "Receipt Point" shall meau the point(s) where
Transporter receives gas delivered to it by Shipper or by the designee of
Shipper for Shipper's account,
(k) "Point of Delivery" or "Delivery Point" shall mean the point where
Transporter delivers gas to Shipper.
2. Me Suring Eauioment and Testina
(a) The gas delivered to Transporter at the Receipt Point(s) shall be
I
measured by means of measuring devices of standard type which shell be
installed, operated and maintained by Transporter (or its designee) and gas
delivered to Shipper (or for its account) at the Delivery Point shall be
measured by meters of standard type which shall be installed, operated and
maintained by Transporter (or its designee). Measurement devices and equipment
shall be tested and adjusted for accuracy on a regular schedule by the party
metering the gas ( the "metering party"),
(b) Shipper agrees to reimburse Transporter, within ten (10) days from
the date of receipt of Transporter's invoice, for any tap valves, metering
facilities and associated equipment and all labor and overhead expenses,
{ attributable to the installation of such equipment, incurred by Transporter in
effectuating the receipt and delivery of gas hereunder. If the invoiced amount
i I
is not paid when due, interest on all unpaid amounts shall arcrue at the rate
II
j
{
SHEET NO. 3
of one and one-half percent (141) per month from the date such amount is due
Transporter; provided, however, no interest shall Accrue on unpaid amounts when
failure make payment is the result of a bona fide dispute between the
parties hereto regarding such amounts and Shipper timely payc all amounts not
in dispute. Failure of Transporter to receive total reimbcrsement, for any
amounts not in dispute, within thirty (30) days of Shipli.,r's receipt of
Transporter's invoice will allow Transporter to suspend and/ar terminate this
i
Agreement. It is understood that although Shipper shall reimburse Transporter
for any tap valves, metering facilities and all associated coats incurred by
Transporter in establishing any Receipt and/or Delivery Point(y), Shipper shell
receive ownership of only the metering facilities and Transporter will be
solely responsible for all activities in connection with said metering
facilities, including, but not limited to, operation, testing, calibration,
i, adjusting, repair and replacement (at Shipper's expense), and maintenance,
necessary for performance hereunder until Transporter disconnects and removes
the metering facilities within a reasonable time after termination of this
Agreement. After said disconnection and removal, Shipper will have the right
within a reasonable period of time thereafter to pick up the metering
- facilities from Transporter. Shipper's failure ao to claim the metering
facilities within ninety (90) days of Transporter's notice to Shipper of the
disconnection and removal thereof, shall constitute a waiver i,y Shipper of any
r
right, title or interest in and to such metering facilitie.e and all right,
title and interest therein shall thereafter vest in Transporter. Transporter
shall retain ownership of all equipment associated with the rap and tap va ~s
installation, Notwithstanding the above, if adequate metering facilities are
already in existence at the Receipt and/or Delivery Points hereunder, such
~ I
~ I
I 1
En
i
SHEET NO. 4
existing metering facilities shall be used and the party having title to such
facilities shall retain title to such facilities.
(c) The other party shall have access to the motoring party's metering
equipment at all times, but the maintenance, calibration and adjustment thereof
shall be done only by the employees or agonts of the metering party. Records
r from such metering equipment shall remnin the property of the metering party
r
and shall be kept on file by said party for a period of not less than three (3)
years. However, upon request of the other party, the maturing party shall
make available to the other party volume records from its metering equipment,
together with calculations therefrom, for inspection and verification, subject
to return by the other party to the mater Gig party within thirty (30) days
after receipt thereof.
(d) The other party may, at its option and expense, install and operate
motors, instruments and equipment, in a manner which will not interfere with
the metering party's equipment, to check the metering party's meters,
instruments and equipment, but the measurement of gas for the purpose of this
Agreement shall be by the metering party's motor only, except as hereinafter
specifically provided, Tha meters, check meters, instruments and equipment
installed by each party shall be subject at all reasonable times to inspection
or examination by the other party, but the calibration and mAjustsent thereof
shall be done only by the installing party.
/ (e) Each party shall give to the other party notice of the time of all
tests of meters sufficiently in advance of such tests so that the other party
may conveniently have its representatives present; provided, however, that if
either party has given such notice to the other party and such other party is
f not present at the time specified, then the party giving the notice may proceed
I
4
SHEET NO. S
with the test as though the other party were present.
(f) Meter measurements computed by the metering party shall be deeded to
be correct except where the meter is found to be inaccurate by as much ■s one
perce.it (lt), fast or slow, or to have failed to register, in either of which
cases the metering party shall repair or replace the meter, The quantity of
gas delivered while the meter was inaccurate or failed to register shall be
determined by the readings of the other party's check meter, if installed and
in good operating condition, or by correcting the error if the percentage of
error is ascertainable by calibration or mathematical calculation. If not to
ascertainable, then it shall be determined by estiaating the quantity on a
l basis of deliveries under similar conditions when the meter was registering
accurately. Such adjustments or correction shall be made only for one-half (4)
of the period between the test in which the inaccuracy was discovered and the
previous test fat accuracy; provided, however, such adjustment or correction
period shall not exceed ninety (90) days.
3. Measurements
(a) In gas measurement computations, the metering party may use the
findings and rules of the Railroad Commission; with respect to flowing
temperature, the metering party shall at its expense properly install and
operate a device of standard make to continuously determine or record flowtug
temperature, Vith respect to specific gravity, such shall be determined by
1 *on-site' sampling and laboratory analysis or any other mutually agreeable
method which is of standard industry practice (provided, however, that either
i
party may at its expense properly install and operate a recording specific
gravity instrument of standard make and in this event the specific gravity as
recorded shall be used).
1
I~
i
I
i
I
s
SHEET NO. 5
(b) The meters for measurement of volumes at the Receipt Point(s) and
Do)ivsry Point hereunder shall be installed and operated, and computations
shall be made, in accordance with current industry standards, The unit of
measurement of gas shall be one thousand (1,000) cubic fe.•t at a pressure bass
of fourteen and sixty-five one hundredths (14,65) pounds per square inch
absolute and at a temperature base of sixty (60) degrees Fahrenheit. Meter
measurements shall be computed by the measuring party into such units in
accordance with the Ideal Gas Laws for volume variations due to metered
pressure and corrected for deviation using daily averages of recozied specific
gravity and flowing temperature, or by using the calculated specific gravity
determined by the method mentioned in paragraph (c) below.
(c) The dally average heating value and specific gravity of the gas
j delivered hereunder by either party may be determined by the use of BTU
recording Instruments of standard type, which may be installed and operated by
the metering party at the metering point, or at such other point or points as
are mutually agreeable to both parties; provided, however, if there is no BTU
I
recording instrument at a particular receipt or delivery point specified herein
or agreed upon hereunder, then the heating value and specific gravity of the
gas st such point may be determined by "on-site" sampling and laboratory
analysis or any other mutually agreeable method which is of standard industry
practice.
(d) The daily average meter pressure. specific gravity, flowing
I
cemperatura and hosting value shall be determined only during periods of tine
i
when the gas is actually flowing,
(a) Each party shall deliver to the other party hereto natural gas which
I I
f
I
i
SHEET NO. 7
!s of merchantable quality and is commercially free P:om water, other
objectionable fluids, sand and other objectionable solids or gas components and
which contAins (i) no oxygen, (ti) not more than five (5) grains of total
sulphur consistinr, of not more than one quarter (4) grain of hydrogen sulphide
and one C0 grain of mercapten sulphur per one hundred (100) cubic feet of gas,
(iii) not more then three percent (31) by volume of carbon dioxide, and (iv)
not more than seven pounds (70) of water vapor per one million (1,000,000)
cubic feet of gas, The gas shalt be at teaperatures not in excess of one
hundred twenty (110) degrees Fahrenheit nor less than forty (40) degrees
Fahrenheit and shall have a heat content of not loss than nine hundred fifty
(950) or more than eleven hundred fifty (1,150) Eritish Thermal Units per cubic
foot ender the conditions of measurement contained herein. Transporter shall
not be obligated to accept any gas delivered b Shipper (or its designee)
i
hereunder which is not interchangeable with other gas In Transporter's pipeline
k at the Point(s) of Receipt hereunder, Trsn:porter's determination of such
interchangeability shall be based upon a factor which is equivalent to the
quotient obtained by dividing the total heating value of such gas, expressed in
v
BTU's, by the square root of the specific gravity of such gas. Such factor
must be within t71 of the interchange factor so calculated by Transporter for
the gas in its system at the Receipt Point(s) hereunder.
r-~ (b) It at any time the gas fails to meet the quality specifications
enumerated herein, the party receiving much gas shall notify the party
delivering such gam, and the delivering party shall isseedtately correct such
i failure. If the delivering party is unable or unwilling to deliver gas
according to such specifications, the party receiving such gas may refuse to
accept delivery of gas hereunder for so long as such condition exists.
li
I
,
i
Y
4
SHEET NO. g
5. Taxes
(a) Shipper agrees to pay Transporter, by way of reimbursement, all
Taxes levied and imposed upon Transporter with respect to the transport of gas
and associated facilities related to the performance of this AgresLV nt. If any
such Taxes levied and imposed upon Transporter by any gover =antal authority
are calculated based upon the value or sales price of tht gas transported
hereunder, Shipper shall disclose to Transporter the value nr sales price of
such gas to enable Transporter to calculate and pay all such fees end taxes to
appropriate governmental authorities in a timely manner. If Shipper fails or
refuses to disclose the value or sales price of such gas, Transporter shall
have the right to terminate this agreement by giving Shipper ten (10) dais'
prior written notice and Shipper hereby agrees to indemnify and hold
Transporter harmless from and against any and all claims, demands, losses or
expenses, including attorneys' fees, which Transporter may occur as a result of
Shipper's failure or refusal to disclose the value or sales pried of gas
transported hereunder.
(b) The term "TaMez_" as used heroin, shall mean all taxes lovia-' upon
j ~
and/or paid by Transporter (other than ad valorem, capital stock, income or
excess profit taxes, except as provided heroin, ginerai franchise taxes
imposed on corporations on account of their corporate existence or on their
right to do business within the state as a foreign corporation and similar
taxes), including, but not limited to, gross receipts tax, street and alley
rental tax, licenses, feee and other charges levied, assessed or made by any
governmental authority on the act, right or privilege of transporting,
handling or delivering gas, where such taxes are based upon the volume, heat
i
{
i
~ r
~l
r
SHEET N0. 9
content, value or sales price of the gas, or transportation fee payable
hereunder.
6. Billing
(a) On approximately the 15th day of each month, Transporter shall render
to Shipper a statement for the preceding month showing the Hcf and MMatu
delivered at the Receipt Point(s) and Dslivety Point; the amount of
1 compensation due to Transporter hereunder, including the tax reimbursement; and
other reasonable and pertinent information which is necessary to explain and
support same ■nd any adjustments made by Transporter in determining the amount
billed.
i
(b) Shipper shall pay Transporter within twelve (12) dnys from the date
Transporter's statement is deposited postage prepaid in the United States mail
or in the case of hand delivery, within ten (10) days from the date
I
Transporter's statement is delivered to a representative of Shipper from a
i
representative of Transporter, for gas transported hereunder during the
precedinf, month, or as to payment which is otherwise due hereunder, according
to the measurements, computations and rates herein provided. If the invoiced
amount of any payment due is not paid when due, interest on all unpaid amounts
shall accrue at the rate of one and one half percent (141) per month from the
data such amount is dui Transporter; provided, however no interest shall accrue
on unpaid amounts when failure to make payment is the result of a bone fide
dispute between the parties hereto regarding such amounts and Shipper timely
pays all amounts not in dispute.
(c) Each party hereto shall have the right ne all reasonable times to
examine the measurement records and charts of the other party to the extent
necessary to verify the accuracy of any statement, charge, computation or
I
1
Y
1
SHEET NO. 10
demand made under or pursuant to any of the provisions in this Agreement, if
any such exa:2inattons reveal or If either party should discover any Inaccuracy
in such billing theretofore made, the necessary adjustments in such billing and
payment shall be made; provided, that no adjustments for any billing or payment
shall be made for any Inaccuracy claimed after the lapse of two (2) years from
the rendition of the invoice relating thereto.
7. Responsibility
Shipper shall be deemed to be in control and possession of the gas until
such gas shall have been delivered to Transporter at the Receipt Point(s) and
after such gas shall have been delivered at the Delivery Point. Transporter
i
shall be deemed to be in control and possession of the gas after receipt of the
gas at the Receipt Point(s) and until such gas shall have been delivered to
Shipper (or for its account) it the Delivery Point. Each party shall have
responsibility for gas handled hereunder, or for anything which may be done,
happen or arise with respect to such gas, only when such gas Is in its control
and possession as aforesaid. Each party shall be responsible for any damage or
injuries caused thereby until the cams shall have been delivered to th4k other
i
party at the Receipt Point(s) or Delivery Point, except injuries and damages
which shall be occasioned solely and proximately by the negligence of the
receiving party,
s Wauancx
Each party hereto warrants to the other that at the time of delivery of
gas hereunder it will have good title or the right to deliver such gam, and
that such gas shall be fraw and clear of all liens and adverse claims; and
each party agrees, with respect to the gas delivered by it, to indemnify the
other against all suits, actions, debts, accounts, damegeo, costs (including
I ~
~ I
~ I
~ i
I
~ I
i
i
s
SHEET NO. 11
attorneys' fees), losses and expenses arising from or out of any adverse claims
of any and all persons to or against said gas. Title to and ownership of the
gas delivered hereunder shall pass to and vest in the party receiving the gas.
9. Egrge !lateurs
(a) In the event either party is rendered unable, wholly or in part, by
1 force majeure to carry out its obligations under this Agreement, except the
obligation to pay monies due hereunder, it is agreed that, on such party's
j giving notice and reasonably full particulars of such force majours, in writing
or by telegraph, to the other party within a reasonable time after the
occurrence of the cause relied on, the obligations of the party giving such
f notice, so far as they are affected by such force majeurs, shall be suspended
during the continuance of any inability to caused, but for no longer period,
i
and such cause shall, so far as possible, be remedied with all reasonable
I,
dispatch.
(b) The term "(orce majeure", as employed herein, shall mean acts of
Cod, strikes, lock outs or other inlustrial disturbances; acts of the public
anemy, wars, blockades, insurrecti,)ns, civil disturbances and riots, and
epidemics; landslides, lighting, earthquakes, fires, storms, floods and
washouts; arrests, orders, directives, restraints and requirements of the
gove.noent and governmental agencies, either federal or state, civil and
military; and application of governmental conservation rules and regulations;
explosions, breakage or accident to machinery or lines of pipe; outages
(shutdowns) of power plant equipment or lines of pipe for inspection,
maintenance or repair; fres:ing of wells or lines of pipe; the partial or
entire nonperformance of any third party transportation pipeline which is
i
necessary to receive and deliver gas under this Agreement; end any other
s
i
i
i
SHEET NO. 12
causes, whether of the kind enumerated or otherwise, not reasonably within the
control of the party claiming suspension. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion of
the party having the difficulty, and that the above reasonable dispatch shall
not require the settlement of strikes or lockouts by acceding to the demand of
the opposing party when such course is or is deemed to be inadvisable or
inappropriate in the discretion of the party having the difficulty,
I
10, flaiver of s,tieaches. Defaults c;Y,,&L" I
No waiver by aithsr party hereto of any one or more breaches, defaults or
rights under any provisions of this Agreement shall operate or be construed as
i
a waiver of any other breaches, defaults or rights, whether of a like or of a
different character. by providing written notice to the other party, either
party may assert ~ any right not
previously averted hereunder or may assert its
right to object to a default not previously protested. Except as specifically
provided herein, in the event of any dispute under this Agreement, the parties
shall, notwithstanding the pendency of such dispute, diligently proceed with
the performance of this Agreement without
prejudice to the rights of either
party,
11. Remade for Breach
Except as otherwise specifically provided herein, if either party shall
fall to perform any of the covenants or obligations imposed upon it in this
Agreement (except where such failure shall be excused under the provisions of
Section 9 hereof), then, and in that event, the other party may, at its option
(without waiving any other remedy for breach hereof), by notice in writing
specifying wherein the default has occurred, indicate such party's election to
terminate this Agreement by reason thereof; provided, however, that Shippor's
i
I
t
F
G
SHEET NO. 13
failure to ;gay Transporter within a period of tan (10) days follovin6 Shipper's
receipt of written notice from Transporter advising of such failure to make
payment in full within the time specified in Section 6 hereof, shall be a
default which sha?! give Transporter the right to immediately terminate this
Agreement, unless such failure to pay such amounts is the result of a bona fide
dispute between the parties hereto regarding such amounts hereunder and Shipper
i
timely pays all amounts not in dispute. With respect t) any other matters, the
party in default shall have thirty (30) days from receipt of such notice to
remedy such default, and upon failure to do so, this Agreement shall terminate
from and after the expiration of such thirty (30) day period. Such termination
shall be an additional remedy and shall not prejudice the right of the perty
i
not in default to collect any amounts due it hereunder for any damage or loss
suffered by it and shall not wive any other remedy to which the party not in
default may be entitled for breach of this Agrament.
i
1
i 4
t
{
i
i I
~II
1
I
t~ ~vf!:`YYA
4ilti :f
1
EXHIBIT 'A'
TO
GAS TRANSPORTATION AGREEMENT
BETVEEN
LANE STAR GAS COMTANY
AND
CITY OF DENTON
h
TransgoKLar Race of Point(m)
i v
ascription Maxim,n Daily Volume
1. Lone Star's interconnection with 25,000 Net
Valero at Ennis (Ellis County, Texas)
2. Lone Star's interconnection with 25,000 Met
1 Mobil at Waha (Pecos County, Texas)
3. Lone Star's interconnection with 25,000 Met
Exxon's Katy Plant (Waller County, Texas)
4. Lane Star's interconnection with 25,000 Met
Palo Duro Pipeline (Nolan County, Texas)
I
5. Lana Star's interconnection with 25,000 Mcf
Delhi .(Denton County, Texas)
I`
I
~ i
I
II
TRANSFER OF GAS AGREEK.Nr
THIS AGREEMENT, made and entered into by and between the CITY OF DENTON,
a municipal corporation, hereinafter referred to as "buyer," and LONE STAR GAS
COMPANY, hereinafter referred to as "Seller,"
W I T N E S S E T H:
WHEREAS, Buyer and Seller have entered into a Gas Sales Contract dalted
I
January 1, 1989 (herein "Gas Sales Contract") and a Gas Transportation Agreement
dated January 1, 1989 (herein "Gas Transportation Agreement'); and
WHEREAS, the City of Bryan, the City of Greenville, the City of Garland
and Brazor Fuel Company,Inc., hereinafter collectively referred to as "Cities",
own and operate the following electric generating stations: Roland C. Dansby
Power Plant, the Ray Clinger Power Plant and the Greenville Steam Power Plant,
Such electric generating stations and the intersection of Seller's Line X(360)
f and Brazos Fuel Company, Inc, Is 12. Inch pipeline near Huckabay in Erath County,
Texas (hereinafter referred to as the "Huckabay Point of Interconnection") are
hereinafter collectively referred to as 40ther Cities' Plants;' and
- WHEREAS, Buyer and Seller desire to enter into a "Transfer of Gas
Agreement" as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and agresments
herein contained, together with other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer do
hereby contract and agree with each other as follows:
1
1
i
i ~
1
ARTICLE I
SUBJECT MATTER
It Is agreed that from time to time buyer may elect to take and receive
a quantity of gas that is less than the 'Maximua Daily Volume' or 'MaxiTum Annual
Volume' provided in the Gas Sales Contract, or the maximum daily volume provided
in the Gas Transportation Agreement, between Buyer and Seller under the terms
and conditions of such agreements and may elect instead to receive such quantity
of gas (on an equivalent MMBtu basis) at any of the Other Cities' Plants, which
shall be hereinafter referred to as a "transfer of gee', subject to the following
conditions;
a. Buyer shall notify Seller by telephone through normal dispatching
procedures a reasonable amount of time in advance of Its desire to
I
make such a transfer of gas and shall designate (I) the quantity of
I
gas (in MMbtu) by sales or transportation category, (it) which of
the Other Cities' Plants that such gas will be transferred to, as
well as (iii) the period of time during which such transfer shall
take place.
b. Seller shall agree to such a transfer of gas except when Seller
{ determines that to do so would interfere with Seller's curtailment
program or with Seller's ability to provide adequate service to
customers accorded an equal or higher priority than Buyer by Seller's
curtailment program; provided, however, Buyer shall never receive
curtailment credit under the Gas Sales Contract for curtailment of
gas transferred hereunder.
2
I
i
f
I
C. This Agreement shill never be construed to give Buyer the right to
deliver gas at rates in excess of any contractual limitations
provided for any of the Other Cities' Plants.
d. All such quantities of gas transferred from Buyer as provided herein
shall be credited toward the Demand Charge under Buyer's Gas Sales
Contract with Seller as such credits are set forth in such Gas Sales
Contract as if such gas had been delivered to Buyer at Buyer's
- plants. Notwithstanding anything to the contrary, Buyer shall never
have the right to transfer (i) any quantities of gas which are sold
by Seller under paragraph 4(b) of the Cu Sales Contract or (ii) any
quantities of gas which are delivered under agreements other than
the Cam Sales Contract or the Cam Transportation'Agreement.
e. The heating value to be used for 4easurement and billing purposes
of the gas transferred hereunder shall be the heating value of such
gas as delivered at the Other Cities' Plant(s).
I
{ E. The total annual volume of all gas transferred under this Agreement
by Buyer during any Year of the term of the Gas Transportation
Agreement shall not exceed tventyfive percent (251) of the combined
total volume of gas transported by Seller for Buyer to any and all
delivery points during such Year. Such twenty five percent (251)
limit shall apply only to gas Folum*s transferred to such Other
Cities' Plant(s) where such Other City(s) does not have both a gas
Salts contract and a gas transportation agreement vith Seller which
is then currently in effect. Hovever, without obligating Seller in
any way to transfer gas for buyer in excess of the limit set forth
in this paragraph, if Buyer should transfer quantities of gas in
v
3
i
I
1
1
i
i
q
excess of such limit, Buyer shall pay Seller for any such gas an
additional amount of twenty (209) per MMBtu in addition to the sales
price or transportation fee provided in the Gas Sales Contract and
Gas Transportation Agreement, whichever agreement/contract is
applicable.
g, Buyer shall be alloved to transfer gas to any of the Othet Cities'
Plants provided such City has both a gas sales contract and a gas
transportation agreement with Seller which is then currently in
effect. However, if any of such Cities does not have both a gas
sales contract and a gas transportation agreement in effect with
Seller at such time and Seller should desire to allow buyer to
transfer gas to such City, then Seller may elect to allow such
transfer for any time period Seller chooses, all at Seller's sole
option. 'therefore, on or before each April 1 and October 1 of any
Contract Year during the term of the Gas Sales Contract, Seller
shall inform Buyer of each City which does not have both a gas sales
1 contract and a gas transportation agreement in effect with Seller
at such time and Seiler shall also then infors Buyer of; (i) which
1 of such Other Cities' Plant(s) shall be allowed to receive gas
transferred hereunder for the consecutive six (6) month period
beginning on such April 1 or October 1, and (ii) the maximum hourly
and daily volumes Seller may deliver hereunder at each such Plant(s)
during ouch period. However. if any City(s)'s gas sales contract
i
and/or gas transportation agreement terminates during such sit (6)
month period, Seller shall not be obligated to deliver gas
transferred bareundar to such City(s). Provided, however, if Seiler
4
4
E
k`
fails to submit to buyer on or before April 1 or October I of any
Contract Year the allowed Plant(s) and volumes as provided in the
previous sentence, then such allowed Plant(s) and volumes for the
immediately preceding consecutive six (6) month period shall apply.
h. buyer may terminate such a transfer of gas ■t any time by giving
reasonable advance notice to Seller of its desire to do so and Seller
may likewise terminate a transfer of gam by giving Buyer reasonable
advance notice if Seller has determined that to continue a transfer
would interfere with Seller's curtailment program or with Seller's
ability to provide service to customers accorded an equal or higher
priority than Buyer under Seller's curtailment program.
l ARTICLE I1
i
TERN
Subject to the other terms and provisions hereof, this Agreement shall be
effective on the lot day of Nay, 1999 and shall thereafter continue and remain
t
In full force and offset for a period and term extending until the termination
of the Car Sales Contract between Buyer and Seller.
ARTICLE III j
j PAYKENT
All quantities of gas transferred from Buyer to one of the Cities as
provided for herein, shall be deemed to have been purchased by Buyer or
transported for Buyer, whichever is a;gltcable, and such quantities transferred
shall not be credited in any way toward any agreement in offset for the City to
which the transfer is made. The sales price or transportation tee for such
volume of transferred gas, the rendering of statements and bills, and the
i
payments for same and any other similar matters shall be according to the terns
S
I
i
3
1.1.x.
and conditions of buyer's Cam Sales Contract or Gas Transportation Agreement,
whichever is applicable.
ARTICLE IV
NOTICES
The parties hereto recognize that In order to determine and allocate sales
and/or transport volumes delivered each billing sonth under (i) the Gas Sales
Contract and/or the Cam Transportation Agreement and (ii) the aforesaid Cities'
contracts, it is necessary for Seller to deduct the transferred volume(s) of gas
which was delivered under the Cam Sales Contract and/or the Gas Transportation
Agreement at each Other Cities' plants during each billing month from total
deliveries to such plant(s). Thorofare, for confirmation purposes, Buyer agree
to furnish to Seller at its office in Dallas, Texas, a written report of all gas
transferred hereunder during each billing month within four (4) working days
~ following the and
of each such billing month. Only transferred volumes so
reported each month shall be considered as gas valuate transferred hereunder,
The parties hsrsto agree that this Agreement may be executed in one or
more copies, or counterparts, each of which, when executed by Seller and Buyer,
I~
as well as any of the parties listed below, as Other cities, shall constitute
and be an original effective agreement between Buyer and Seller and such Other
- -f Cities,
II
i
I
i
6
I
I
IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals
by the parties hereto on the day of 1989.
i
ATTEST: SELLER:
LANE STAR CAS COMPANY, a Division of
ENSERCH CORPORATION
J. R. Moore
\ Vice President
f ATTEST: BUYER:
CITY OF DENTON, TEXAS
1
it
OTHER CITIES:
ATTEST: CITY OF ARYAN, TEXAS
` t
ATTEST: CITY OF GARLAND, TEXAS
i
i
i
ATTEST: CITY OF GREENVILLE. TEXAS
J
ATTEST; BRAZOS FUEL COMPANY, INC.
I ~ 1
I
i
ii
I 4
E
i
f
a
Y {S
T,
CAS SALES CONTRACT
L
1HIS CONTRACT is made and entered into as of the 1st day of January, 1989
by and between ENSERCH GAS COMPANY (Seller), whose mailing address is 1700
Commerce Place/8th Floor, Dallas, Texas 75201, and the CITY OF DENTON (Buyer),
whose address is Municipal Building, Denton, Texas 76701, and provides for the
sale and purchase of such quantities of gas which Seller has available and the
right to sell from various sources within the State of Texas under Seller's
existing agreements, Said gas production will be made available to Buyer or Lone
Star Gas Company (Buyer's Agent) under this Contract on a monthly basis at the
Delivery Point(s) hereunder.
1.
Delivery Point. The Point(s) of Delivery for all gas delivered hereunder shall
be at the inlet flange of Buyer's Agent's meters located at various points on
buyer's Agent's pipeline within the State of Texas. Title to all gas delivered
hereunder shall pass from Seller to Buyer at said Point(s) of Delivery, Buyer
shall arrange and pay for the transportation of the gas euwn d hereunder from
the delivery point to its final destination.
it.
Lt, The term of this Contract shall commence on the data of initial delivery
hereunder and continue through December 31, 1993, and month to month thereafter
until cancelled by either party giving thirty (30) days prior written notice to
the other party. Buyer affirms that it will suffer no Irreparable injury by
virtue of the expiration of this Contract at the time and date such expiration
i occurs and hereby authorises the abandonment of service as set forth herein.
i
Quantity. Subject to the terms and conditions herein, Buyer may purchase and
receive such quantities of gas that Seller has available for sale from various
sources hereunder on any given day not to exceed a saximum quantity of twenty-
five million cubic feet (25 MKcf) of gas per day, The quantities of gas which
Seller has available for sale to buyer shall be determined solely by Seller and
shall be that quantity of gas which Seller delivers each day to Buyer's Agent
at the Point(s) of Delivery hereunder for delivery to Buyer, h'rthing contained
heroin, however, rhall be construed as preventing the parties from mutually
agreeing in writing to the sale and purchase of quantities of gas in excess of
those provided in this paragraph.
Prior to the beginning of each month, Buyer shall notify Seller of the estimated
monthly volumes, if any, that Buyer in good faith estimates it will purchase
I
I
i
i
1
i
i F
i e r
hereunder during much month. Buyer may assign, upon thirty (30) days prior
written notice to Buyer's Agent, any ov all nomination obligations to Seller.
Upon such assignment, Seller shall inform Buyer's Agent of estimated monthly
volumes which Seller estimates Buyar's Agent will deliver to buyer for much
month.
Both parties recognize that the volumes delivered at the Point(s) of Delivery
hereunder may be commingled vlth volumes of gas delivered under agreements
between Seller and other third-parties; therefore, for allocation and billing
purposes Buyer and Seller hereby agree that the procedure for allocation of all
volumes delivered at the Point(s) of Delivery shall be mutually agreed upon by
the involved parties.
In no event shall the vol,,us of gas that Seller sells and delivers to Buyer or
that buyer purchases and receives from Seller under the terns of this Contract
ever exceed the volumes of gas which can be legally produced under the applicable
rules and regulations of the Railroad Commission of Texas in the course of
reasonably prudent operations.
Seller shall be in control and possession of the gas sold and purchased hereunder
and be responstble for and shall tndemnify and hold Buyer or Buyer's Agent
harmless from any damages or injury caused thereby until the same shall have been
delivered to Buyer or Buyer's Agent at the Point(s) of Delivery, except for
injuries and damage occasioned proximately by the negligence of buyer or Buyer's
Agent. Buyer shall be in control and possession of the gas sold and purchased
hereunder and be responsible for and shall indemnify and hold Seller harmless
from any damage or injury caused thereby once the same has been delivered to
Buyer or Buyer's Agent at tho Point(s) of Delivery, except for injuries and
damages occasioned proximately by the negligence of Seller.
IV.
Price and Pavmant. For all of Seller's gas delivered to buyer or Buyer's Agent
at the Point(s) of Delivery and p,irchaesd hereunder for the period beginning
January 1, 1989 and ending January 31, 1989, Buyer agrees to pay Saller and
Seller agrees to accept $1.98 per MMAtu. The price to be paid by Buyer for gas
hereunder for the period beginning February 1, 1969 and ending at 4:00 p.m.
February 3, 1969 shall be $1.60 per MMBtu. The price to be paid by Buyer for
gas hereunder for the period beginning at 4:00 p.„. February 6, 1989 and ending
February 21, 1969 shall be $1,95 per MMAtu. The price to be paid by Buyer for
gas hereunder for the period beginning february 22, 1969 and ending February 26,
1989 shall be $1.75 per MMStu, The price to be paid by Buyer for gas hereunder
for the period beginning March 1, 1989 and ending March 31, 1989 shall be $1.45
per MMAtu. The price to be paid by buyer for gas hereunder for the period
beginning April 1, 1989 and ending April 30, 1989 shall be $1.33 per MMbtu. The
price to be paid by Buyer for gas hereunder during the remaining term hereof
after April 30, 1989, shall be negotiated by buyer and Seller for any mutually
agreeable time period(s), In the event Buyer and Seller cannot mutually mgras
upon a negotiated price prior to the beginning of any such period, than neither
party shall have any obligation to perform under this Contract during such
period, except for the requirement to make payment of any amounts due hereunder,
2
ICI
~I
II
C
F
1
In no event shall any price paid and collected hereunder exceed any maxtaua
lawful price established by the Natural Gas Policy Act of 1978 (NGPA) which is
applicable by vintage, character, and category to the gas sold heceunder. If
such contract price is reduced to such lesser maximum lawful price, Seller shall
be entitled to collect such allowances as are available under Section 110 of the
NGPA for gathoring, treating, compression and tax reimbursement (as limited by
Article VI hereof), but the sum total of such maximum lawful price and Section
110 allowances shall not exceed an otherwise applicable contract price.
Seller shall render a statement to Buyer on approximately the 15th day of e.+c
month for gas delivered the previous month. Said statement shall be based on
Buyer's Agent's sales meters and Buyer shall pay Seller the amount of the
statement within twelve (12) days from the date Seller's statement is deposited
postage prepaid In the United States mail or in came of hand delivery, within
representative of Seller's Seller EOe If the d total r invoiced representative
amount of of any
nbu(10) days yer from a from the
payment due is not paid when due, interest on all unpaid amounts shall accrue
at the rate of one and one-half percent (1 1/2%) per month from the date such
amount is due Seller; provided, however, no interest shall accrue on unpaid
amounts when failure to make payment is the result of a bona fide dispute between
the parties hereto regarding such amounts and buyer timely pays all amounts not
in dispute. Should litigation on any of thu a amounts be required, Buyer agrees
to reimburse Seller for its reasonable attorneys fees.
Bills rendered for gas delivered hereunder shall be payable at Seller's office
located at P. 0. Box 910264, Dallas, Texas 75191.0264, or such other address as
may from. time to time be designated by Seller upon reasonable notice.
V.
M aauramaat. Heating value to to be calculated at a pressure of 14.65 psis on
a dry basis and temperature of 606F. The unit of volume for purposes of
measurement shall be one thousand (1,000) cubic fast of gas at 14.65 psis and
606F, as corrected pursuant to current industry standards, and buyer's Agent's
maters and other measurements shall be conclusive except for when the meter to
found to be inaccurate by as such as one percent (l%) feat or slow, or to have
- failed to register. The quantity of gas delivered while the mater was inaccurate
or failed to register shall be determined by correcting the error it the
percentage of error is ascertainable by calibration test or mathematical
calculation. If not so ascertainable, then it shall be determined by estimating
the uantity an a basis of was registering accurately. deliveries vadjustment under or similar forn astiirn inthe accuracy
or failure shall be made for a period longer than ninety (90) days.
VI.
Taxdj~ Buyer and Seller acknowledge that the present severance, production,
gathering or similar taxes amount to seven and one-half percent (7.1/2%) of the
purchase price and is included therein, In addition to the terms and provisions
of Article IV heroin, Buyer agrees to reimburse Seller monthly fr one hundred
percent (1001) of the aggregate amount of all severance, production, I
II
l
or similar taxes levied, assessed or fixed by any taxing authority or authorities
and paid by Seller with respect to gas sold and delivered hereunder which exceeds
the aforesaid amount in effect on the date hereof. In addition to the
aforementioned taxes. Buyer also agrces to reimburse Seller for any and all taxes
(not including excess profits, capital stocks, franchise or general property
taxes) levied, assessed or fixed by any taxing authority or authorities,
including but not limited to gross receipts taxes, and paid by Seller with
respect to the sale, transportation, handling, and/or delivery of gas sold
hereunder.
VII.
Quality. Seller shall deliver for receipt by Buyer's Agent natural gas which
is of merchantable quality and free of water and other objectionable fluids and
solids. The gas shall contain no oxygen, and not more than five (5) grains of
total sulphur, consisting of no more than one-quarter (.25) grain of hydrogen
s•slfide and one (1) grain of mercaptan sulphur per one hundred (100) cubic feet
of gas, not more than three percent (31) by volume carbon dioxide, and not more
than seven pounds (70) of water vapor per one million (1,000,000) cubic fact of
gas, and which has a heat content of not less than nine hundred fifty (950) nor
more than eleven hundred fifty (1,150) British Thermal Units per cubic foot under
the conditions of measurement contained herein. The gas delivered hereunder
shall be at temperatures not in excess of one hundred and twenty degrees (1204)
Fahrenheit, and not less than forty degrees (40e) Fahrenheit.
VIII.
Warranty. Seller hereby warrants to Buyer that at the time of delivery of gas
hereunder it will have good title or the right to deliver such gas, and that such
gas will be free and clear of all liens and adverse claims; and Seller agrees
with respect to the gas delivered by it, to indemnify Buyer against all suits,
actions, debts, accounts, damages, coats (including attorney's fees), losses and
expenses arising from or out of any adverse claims, relating to Seller's title,
of any and all persona to or against said gas.
Each party warrants to the other that its (and/or its agent's) facilities
utilized for the delivery and acceptance of gas hereunder are wholly intrastate
facilities and are not subject to the Natural Cos Act of 1938, as heretofore
amended. As a material representation, without which both parties would not have
been willing to execute this Contract, each party warrants to the other party
that it (and its agents) will take no action or comit an act of omission which
will subject its (or its agent's) facilities, this transaction, or the other
party's (or the other party's agent's) facilities, to jurisdiction of the Federal
Energy Regulatory Comaisaion (FERC) or its successor goverrumental agency under
the terms of the Natural Gas Act of 1938, as amended, The gas delivered and
accepted hereunder shall not have been not shall be sold, transported or
otherwise utilized in interstate commerce in a aannar which will subject either
party (or their agents) to the terms of the Natural Gas Act of 1938, as amended.
In addition to and without excluding any remedy the aggrieved party may have at
law or in equity, the party who breached the above warranties and representations
4
k
~ I
I
I
r
i
shall be liable to the aggrieved party (and the aggrieved party's agent) for all
damages, injury and reasonable expense the aggrieved party (and the aggrieved
party's agent) may sustain by reason of any breach hereof. Further, should
either party (or their agents) perform any ace, or cause any act to be performed,
at any time, that results in any gas covered hereunder becoming regulated by or
subject to the jurisdictional consequences of the FUC or successor governmental
authority contrary to this Contract, this Contract shall be deemed of its own
terms to terminate on the day before the date of such occurrence; provided,
however, such ternination shall never be construed to impair any right arising
under this paragraph.
Buyer and Seller agree that this Contract will be construed according to the
laws of the State of Texas.
IR.
Force Mgleura. In the event of either party hereto being rendered unable, wholly
or in part, by force majeure to carry out its obligations under this Contract,
other than to make payments due hereunder, it is agreed that on such party's
giving notice and full particulars of such force majeure by written notice or
by telegraph to the other party as soon as possible after the occurrence of the
cause relied on, then the obligations of the party giving such notice, so far
as they are affected by such force majeure, shall be suspended during the
continuance of any inability to caused but for no longer period, and such cause
shall as far as possible be remedied with all reasonable dispatch. The term
'force majeure•, as employed herein, shall mean acts of Cod; strikes, lockouts,
or other industrial disturbances; acts of the public enosy, wars, blockades,
insurrections, civil disturbances and riots, and epidemics; landslides,
lightning, earthquakes, fire, storms, floods, and washouts, arrests, orders,
directives, restraints and requirements of the government and government
agencies, either federal or state, civil and military; any application of
governmental conservation rules and rogulations; explosions, breakage or accident
to machinery or lines of pipe; shutdowns of equipment or lines of pipe for
inspection, maintenance or repair, shortage of water, freezing of wells or lines
of pipe; partial or entire failure, depletion or loss of wells or sources of
supply of gas; inability or refusal of Buyer's Agent to accept deliveries of
gas from Seller or redeliver gas to the Point(s) of Dolivsry, cancellation by
Buyer's Agent of Buyer's transportation agreement with buyer's Agent for any
reason whatsoever; and any other causes, whether of the kind enumerated or
otherwise, not reasonably within the control of tae party claiming suspension.
It is understood and agreed that the settlement eZ strikes or lockouts shall be
entirely within the discretion of the party having the difficulty, and that the
above requirement that any force majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demand of the opposing party when such course is or is deemed to be
inadvisable or inappropriate in the discretion of the party having the
diffiwlty.
S
1
I
i
1
,I
~ l
9
}
1
Y
X.
Recitals and Covenants, rho intent and purpose of this Contract is to enable
Buyer to purchase gas from a source other than its traditional utility source
of supply, buyer is not relying on and will not rely on any expectation of sales
or service from Seller except as specifically provided in this Contract. It is
intended that Seller's furnishing of gas to Buyer be solely and strictly under
the quantity, terms, and other provisions of this Contract.
Buyer believes that it is in its best interest to purchase gas under the terms
and conditions of this Contract and without the benefit of the duties,
obligations, and conditions of sale and service which could apply to Seller wars
Seller doomed to be a utility, Buyer recognises and agrees that in purchasing
gas under those conditions it will not have available certain legal remedies
against Seller which it would have were Seller to be a utility or, even if Seller
were deemed to be a utility, were gas to be purchased from Seller under
circumstances and conditions other than under this Contract.
Buyer agrees and stipulates that, in making sales to Buyer under this Contract,
Seller is neither the sole nor exclusive source of supply of gas to Buyer nor
will Seller be engaged to the asking of a city gets sale to Buyer.
Buyer hereby waives any and all rights to assert or claim that Seller has any
obligations whatsoever to provide natural gas sales or service to Buyer other
than under the tarns and conditions of this Contract, or that any obligations
will accrue by virtue of sales or service under this Contract. This waiver
specifically includes, but is not limited to, any claim or assertion that any
cessation of sales or service provided by Seller to Buyer, provided such
cessation is in conformance with the provisions of this Contract, constitutes
abandonment of Buyer or that Seller must receive permission for such cessation
from any governmental authority.
I
j Should, for any reason, Seller ever be deemed to require the permission of any
governmental authority for the cessation, whether of a permanent or temporary
nature, of service and sales to Buyer as provided for in this Contract, Buyer
agrees that such cessation is in the public tntstest and that such permission
should be granted and/or deemed granted at the time of execution of this
Contract.
XI.
Miscellaneous. Buyer's purchase of said gas under this Contract shall be subject
to all terms and conditions of any releaso(s) applicable to said gas from prior
-1 contracts of other purchasers.
Waiver by Seller of a particular right or default hereunder shall not be deemed
a waiver of other rights or defaults whether similar or dissimilar.
This Contract supersedes and replaces all prior contracts between the parties
hereto, or their respective predecessors in interest, for gas at the location
and for the purposes harein designated, and constitutes the entire contract
between the parties, i
6
Il I
Q. T 14.f':S
This Contract constitutes the entire agreement between the parties covering
the subject matter hereof, and there are no agreements, modifications, conditions
or understandings, written or oral, expressed or implied, pertaining to the
subject matter hereof which are not referenced or contained herein.
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Contract in duplicate originals as of the day and year first herein written,
I
BUYER: SELI.ER.
CITY OF DENTON ENSERCH CAS COMFANY
By: By:
Title: Title.
ATTEST:
I
I
i
i
i
i
{
{ {
i
{
7
{
( ~ k,: vA
i
ft{a
.
fN t\
pha,.~
6i2+Y1~
I
1
I
I
\~~/1
~r~
i`
i
1
i
I
1
_ ~I
JtT nl k i.-p
M.9a
Y EXCERPT
Public Utilities Board Minutes
May 24, 1989
8. REVIEW LONE STAR GAS CONTRACTS
Nelson introduced Paul Brietzman, Gas Consultant, and Jim Thune,
Superintendent of the Power Plant. He then proceeded to review the
main points of the four gas contracts:
a. Lone Star Gas Sales Contract
b. Lone Star Gas Transportation Agreement
c. Lone Star Transfer of Gas Agreement
d. Enserch Gas Sales Contract.
Nelson stated that, although Denton got better concessions than ever
before from Lone Star Gas, the Board needs to be well cognizant of
the fact that there are going to be times when Den0n's contract
price is not going to be as good as Bryan's or Garland's.
F Brietzman gave a short presentation. After general discussions,
E Frady made a motion to recommend to the City Council approval of the
I four contracts upon legal Department review and acceptance. Second
by Thompson. All ayes, no nays, motion carried.
I
i
j ,
6445U:6
I
r
i
1 '
1 I
J
I
I
r/ I
I
I
I I~
11I
I
III
7, oOP.m•
DATE: 10/3/89
CITY COUNCIL REPORT FORMAT 2• A
TO. Mayor and Members of the City Council
FROM. Lloyd V. Harrell, City Manager
SUBJECT: Consider the petition of Chi Omega House Corporation for approval of
a zoning change and a detail plan for the Wattam Addition,
Lots 7 and 8.
RECOMMENDATION:
The Planning and Zoning Commission recommended approval at its
August 23, 1989 meeting. (4-0)
SUMMARY:
See attached.
BACKGROUND:
See attached.
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
I
N/A
FISCAL IMPACT:
{ N/A
1 Respec lly sabmi t
oy Harrell
I
4 City pager
Pre , V
G. Owen Yost, ASIA
Urban Planner
App;bveds
'F ank H. Ro bins, AICP
Executive Director
Planning and Development
19521
i
i
I
I
i
E
lI
1 '
I
4
STAFF REPORT
To: Denton C-ty Council
Case No.: Z-89-011 Meeting Date: October 3, 1989
GENERAL INFORMATION
Applicant: Robert 'T. Cunningham
r~1 5401 N. Central Expressway
Suite 230
Dallas, 1A 75205
Status of Applicant: Representative
Owner: Chi Omega House Corporation
2901 Carmel
Denton, Texas 76205
Requested Action: A change in zoningg from single family
residential (SF-7) to Planned
Development, and approval of a
j Detailed Plan.
I ~
Location and Size: 1.054 acres located on the northwest
l corner of Welch and Fannin Streets,
generally southeast of the campus of
the University of North Texas, in the
City and County of Denton, Texas.
Surrounding Land Use
j and Zoning: North - apartments/multi-family
1J zoning.
South - (across Fannin Street) -
aparti+ents/multi-family
zoning.
East - (across Welch Street) -
apartments/multi-family
zoning.
West - single family
structures/single family
zoning (SF-7).
j Several adjacent Specific Use Permits and planned developments
exist in the area. They are:
i
o S-75: Day nursery for children
0 S-68: Fraternity, up to six people, Delta Sigma Pi
E o PD-44: Apartments, 15 units
o PD-33: Handicraft and artists' shops
Denton Development Plan: Low Intensity aroa, number 118,
i
j
Il
V. Al
tln Y' K(Case Z-8)-011}
Page Two FF
SPECIAL. INFORMATION
Transportation: The property has frontage on both
Welch and Fannin Streets. Welch
Street functions as a north-south
collector street, having a right-of-
way of 80 feet. Fannin Street is an
east-west local street, having a
60 foot right-of-way. The Detailed
Plan proposes to have one-way traffic
entering the parking area from Welch
Street and exiting onto Fannin
Street. Tide entrance and exit are
each 15 feet wide, in accordance with
standards, and sufficient stacking
room has been provided,
Utilities: Existing utilities are adequate for
the proposed use. The applicant
propose. to tap onto a six inch
sanitary sewer line in L'elch Street,
in addition to two taps onto an
existing water line, also in Welch
Street, for the fire sprinkler system
and for domestic water and the lawn
ii sprinkler.
Drainage: On-site drainage will be directed,
via sheet flow, to Welch Street.
Chen, drainage will flow into
existing storm sewers.
i
Vegetation: Tnere are almost two dozen mature
trees in varying degrees of health on
j the site. The applicant proposes to
preserve the majority of them, by a
combination of sensitive design, '
fertilizing and pruning prior to con-
struction, and the use of porous pipe
for witering any paving-covered
roots. Approximately five trees will
be removed in order to accommodate
the parking lot. The preserved exis-
ting trees, together with vegetation
proposed to be planted by the appli-
cant, nearly double the landscaping
required by the Landscape Ordinance,
and are markedly higher than any
other multiple-resident structure in
the area.
I '
~I
i
II
i
i
li
S
(Case Z-89-011)
Page three
HISTORY
This tract is contained within the Wattan Addition, which was
first surveyed and sold in 1903 as single family lots. With the
growing influence of the University of North Texas, and the
demand for student housing, many lots in the addition are zoned
multi-family and used as student apartments. The remaining
single family homes, with several exceptions, are rental
properties, otten in need of repair.
Currently, most of the proposed tract is vacant. On the north,
however, there are two residential structures which are proposed
for demolition.
ANALYSIS
Despite pressure from the University of North Texas, the area is
primarily residential. file Denton Development Plan directs that
the residential character of the neighborhood be preserved as
much as possible. To quote: "Special consideration shall be
given for the protection of older residential neighborhoods."
In r°sponse, the applicant has placed the large parking area
which is necessitated by such a development away from the public
streets, behind the building, as directed by the Plan. The
building itself is intended to have a residential appearance,
and the applicant is working with the staff and the neighborhood
to this end. At the Planning and Zoning Commission hearing of
August 23, 1989, the applicant offered an additional measure to
protect the existing neighborhood. A six foot buffer strip,
with a continuous hedge row, in addition to the proposed wood
fence, has been added to the Detailed Plan at the Comr,ission's
request. fhe Plan also suggests "Strict site design review for
all projects within 1,600 feet of existing single family
dwellings" such as this. Such site plan review is integral to
the planned development process chosen by the applicant.
The Plan also spells out criteria for reviewiig zoning changes
in existing neighborhoods. They are 1) Upgrading or elimina-
ting deteriorating structures will be encouraged to the extent
that it is judged positively for the overall neighborhood.
2) Review criteria will consider the impact of proposed
development in areas adjacent to or nearby existing older neigh-
borhoods. Another criteria of the Plan is that any proposed
development near the University of North Texas not conflict with
any Master Development Plan of the University, The University
has no plans for academic buildings or dormitories in this area
and is content to let the demand for housing govern the land use.
II
i
I
i
r-1 IF"'i
k -
' (Case Z-89-011)
Page Four
ANALYSIS
Since the character of the development is a major determinant of
the proposal's adherence to the Denton Development Plan, the
staff researched several indecis.
One measure--the Landscape Volume Index, or "L.V.I." was
developed i>y staff for a means of evaluating this, and future,
zoning cases. Simply, the L.V.1, is an index that expresses the
three-dimensional volume of a site, and the extent. to which that
volume is filled with landscape material. 'Chas, a site that
remains a forest scores 100%; where a site that has no
landscaping at all scores 0%. (A more complete explanation of
the Landscape Volume Index is attached.)
In this case, the proposed development will yield an L.V.I. of
15.Ik. This is somewhat higher than adjacent lots, and is one
basis for judging that this development is compatible with
existing neighborhoods.
the planned development zoning provides the most control
available to implement the design intent, and to ensure
compatibility with the neighborhood. In the planned development
process, many aesthetic factors, and factors outlined in the
Denton Development Plan will ensure adequate opportunity to
review such things as materials, plantings, and setbacks.
Abundant landscaping is being preserved or planted in
consideration of Denton's Landscape and Tree Preservation
Ordinance. Landscaped setbacks shown in the Detailed Plan are,
at least, equivalent to those of adjacent residences. Screening
has also been provided to buffer the existing single family
structure to the west, in the form of a b foot tall wood fence
running approximately 180 feet along the west property line of
the tract.
J
The intensity study area is over allocated; having 2021 of its
intensity trips allocated. The Denton Development Plan directs
that in areas where disproportionate allocation of intensity has
already been granted, the proposal will be evaluated in
reference to the least intense, most logical laud use. In
addition, the effect on the surrounding areas and compatibility
with other policies of the Plan should be reviewed. One of the
most logical uses is a sorority house, particularly one within
walking distance of the UNT campus.
i
i
it
,y
t
s
(Case Z-89-011)
Page Five
RECUMMENDATION
The Planning and Zoning Commission recommends approval.
ALTERNATIVES
1. Approve petition
2, Approve petition with condition(s)
3. Deny petition
ATTACHMENTS
1. Location Map
2. Detailed Plan
3. Development Standards
d. Intensity Map and Statistics
S. Landscape Volume Index report
jj 6. Minutes
i
1993k
I
E
J
1
k~
ATTACHMENT I
Z 89-011
:
NORTN
e ~-JI~SJ
®I 00 TOWN
Jam
64
OC~~C~ ~aoc
O~
AOLI o
a f M!N
❑ ddd
a
El CUM
amm
• Lorooo
L T `
Y
I
AL! N40Nr- OA TI g
i
I
r
Z 8 9 O i l ATTACHMENT 2
DETAIL PLAN CHI OMEGA '
NORTH
ra
, ~ I I
I .aura •7:i.a. • Y\~ ~f Jt ,g. _ .c. jy` Y ,
5 1 a••w!'L dui ' i,
I .'.er' f..'.: u •.i i _ ('1 y ,O _ _ ~ _ ~ 444x111 i
`J
jI ~.•wa.• + I xoe n .u rri
~ i f'rti i ~ au•.r~w.~~ 1 '~f~. iaw/ f•. ~ i
i
/ 1'w.7 ` -jam ~ • ~ ~ ^
ram m
- '17
,i!•ACTM~\ A
AwtiJ ci) w.~y..rav
r. eat ~.r, ~a. , .
es) 6, -A,-soom
I
i
f
SCALE rVfiN~ DATE `J'.6',7• e~?
I
~I
I
4
Z 89 Oil ATTACHMENT 2
I
DETAIL PLAN CHI OMEGA NOATH
i .q'-►' t'• • a w. wry rst:a. a'ir
_ ~ L I
I~trum e.., l v • j I -
,'n0 R' Lt
i i ou"q•f.'C...~e/ •u•. ta{{~« w t y .f.a ~I
1
+ ~ . ~e .aywy. '
i i .4a 1 !tv! Nw N MM ice: k .
/IOLJE~ _ 1 I~Y '
x 't
~1 • Ilf`
a,wV~ _~__1• ~~{'c4r. •rRy ADe Alw tr ~r7 ,N f'•
~ ~ J~~ a'arar•a6irf ~ h JMiM
% fie' Mf. -ra_ _f•G.`y.,. ) ~'tT. i
J%-swr 4,
Ir.- .f fss ws. ~ >r ~ _ - 1
a .lay w/ ail nla, 4 i•.. {f+sM
FA" Wft&d
I
t
{ SCALE A14'Ald - OATE 7 ZJ
i 1
1
N
ATTACHMENT 3 a
DEVELOPMENT STANDAdDS
DETAILED PLAN
August 18, 1989
1. Statement of Intent of Ovuecs
To construct a sorority nouse witnin easy walking distance of the University
of Nortn Te:as Cam us.
2. Statement Indicating Relation to Denton Development Plant
The property is in a Low intensity area bordering University of North T, :a s. it
I _ is an ideal location for a socority house because it is close to the campus,
it fronts on Welch Street wlilcn has a high traffic capacity end it allows traffic
access to Eagle Drive without driving paat aay single family coned property.
f 3. Lotal Number of Acres in Proposed Districts
1.054 acres.
i I
4. Land Uses and Total Number of Acres to Each Carrel or Tcactt
Total Proposed Acreage
j k a. Single Family Detached .41-
b. Single Family Attached (tovanouses, cluster, etc.) -0-
c. Attached Pstio/Garded/Zero Lot Line -0- -
d. Duplex -07
k e. Multi-Family
f. Office -0-
g. Neighborhood Service -0h. General Retail -Oi. Commercial -0
J. Light %dustrisl -0
k. Heavy icdustrial -0-
1. Other (specify) sorority house - 1.054
I
r i
I
3-1
i
f
4
5
L
l i
t
Development Standards
Page 2
5. Off-Site Information - adjacent or surrounding land uses, zoning, streets,
drainage facilities, and other existing or proposed improvements.
(Shown on detailed plan.)
i
6. Traffic and Transportation - indicate existing and proposed streets, parking lots,
loading areas, access points. (Shown on detailed plan.)
Projected Traffic Generation, (Based on traffic study, if required.)
See attached worksheet.
1. Buildingst
i
a. Approximate location. (Shown on concept or detailed plan.)
b. Maximum heights
Two stories.
c. Minimum setbacks: (Shown on concept or detailed plan.)
Front yard: 25 feet; Side yards 6 feet; Rear yards 10 feet
i
d. Maximum gross floor area (square fee') for aonresidentials
8. Residential Subdivisions
a. Number of unite per acre (density):
b. Number sad location of lotat (Shown on concept or detailed plan.)
c. Minimum site, width and depth of lots, (Shown on concept or detailed plan.)
d. Minimum front, aide and rear yard setbacks: (Shown on concept or detailed plan.)
i
I
3-2
1
Ii
Development Standards
Page 3
9. Water and Drainage - approximate location of all existing or proposed creeks,
ponds, lakes, floodplains, otner water retention or major drainage facilities
and improvements. (Show on detailed plan.)
IU. Utilities - location of all major sewer, water or electrical lines and facilities.
(Shown on detailed plan.)
11. Location of trees 10" in diameter - six (o) feet from ground level.
(Show on detailed plan.)
12. Open Space - location and sire of greeabelts, parks, common and recreational areas.
\ (Shown on detailed plan.)
1 13. Screening - location, type and site of all fences, berms or screening features.
(Shown on detailed plan.)
14. Development Schedule (concept plan) - showing specific date detailed plan will
be submitted, date to start construction and complete construction, and rate of
development. All dates snould indicate month and year.
r
i
ADDITIONAL REQUIREMENTS FOR A DETAILED PLAN
i
15. Landscaping Plan - major features and types of landscaping to be used.
Refer to plan.
J
16. Signs. - show location, type and site on detailed plank otherwise, signs must
conform to Article 11 of the Zoning Ordinance.
17. Sidewalks. (Show on detailed plan.)
II
3-3
I
i
I
v
i
1 a
I a}j}
Development Standards
Page 4
I
18. All information required for preliminary pla., in accordance with Appendix A
(Denton Development Code) of the Code of Ordinances.
(A separate plat is required.)
19. Development Schedule (detailed plan) - indicating start aad completion of
construction and the rate of development. All dates should indicate month
and year.
( The latest constructioa start would be January, 1997; completion would be
August 1997.
I
I
I
j I
it
,I
i
i
i
I
I
I r
I
2560 jilU 3-4
ATTACEVENT a
INTINUTY AREA ♦ lie EI=E 182.43 ACRES
BOUNDARY DEICRIP710N i.
East: Fort Worth Drive and South Carroll Blvd
West: Collier Street
North: Eagle Drive
South: 1-35E and a line that follows Greenlee Street to Fort Worth ~I.
Drive
it nL-JL 77
`JI
it
i
f ~ n
of J 1
I/ v
y A M O
it O
a 'SRI
Of
JI
r i
ICALS
0 1000 2000 `
C/IY of D#NFOA, TOXAE
11 1
ME m R~-~ MUM=
4-1
i
Ili .
t
` k
.3
1
I~
q'., •SE 44NAGEMENT I"+FC2MAT:C'I SYSTEM
PLANNING ANO CEVEL:P4E'4T CEPAP,T4VJ
'k CITY OF CENTCN
TyFe: Lcw in:en;it/ Tr'p5,'aC 70
Irten;l:j 1rc] a 1' - -
Traff'.: survey :ones: 7547 05;6 :554
Ec~,r~fry Cejcr+ptzar: North: 0gl9 Cr.
South: t-:5E, a lire fo',Cw:n3 ;reenlee 'c '4,:r'*
Cate: last: ;t. wor.h Or. and South Carroll S kd.
lest: Collier 3t.
0 ND LSE--- EeISTI`;G LANG-USE- C+'RR£VT :CN:NG -PLANNED OEViL,CPYE?4TS--
CATEGCRY 'JNITS ACRES INTENSITY ACRES INTENSITY AIRES :NITS INTENSITv
aF-16 c t1 49 ,0 0 0 0 0 0
SF-10>16 6 28.72 760 0 r 0 ) u
SF-,00 33 23.51 98C 2710` 1136.1 0 0 0
LESS SF-7 34 21.82 340 ) 0 0 0 0 I
MOB.HCMES 0 0 0 0 0 0 0 0
OI:FLEX 2 0.37 20 1.1 98 0 0 C
MF-R 4 7.19 32 0 0 0 0 )
W-162 536 27.6 4288 0.92 184 3.34 54 432
R :OM/p ET 0 13.06 8389 1.IT 825.5 5 0 3250
r OFFICE 0 1.06 371 0 J 0 )
INOVSTRY 0 0 0 0 0 0 0
INSTI'`IAL c 2.3 238 0 0 0 0 L
P.PxS 0 0 0 0 0 0 0 9
R/O/SPACE b 1 0 0 0 0 C 0
TRANSROPT ) 12.54 0 0 0 0 0 0
AGRIC. 0 0 0 0 0 0 0
JACANT 0 39.:8 C 0 0 0 0 0
TOTAL 32' 182.43 16228 30.34 2234 8.94 54 3E82
INTENSITY CALCULATIONS
(i) Intensity area total trips 162.43 times 60 10946
12) Trips allocated to exlsting land uses (built) 16228
(3) Trips allocated to current toning Incl. P Os (not built) 5916
(4) Trips allocated to vacant lands not toned plus Agric, zoning C
(5) Estimated unallocated Intensity trips 1)m1nus(2)+(3)+141 -11198
(6) Percentage of intensity trips allocated
i
i
4-2
I
1
w a
e
~e
ATTACHMENT 5
ClTYOf DENTON, TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76107 / TELEPHONE (817) 566-8200
MEMORANDUM
DATE: October 3, 1999
TO: Denton City Council
FROM: G. Owen Yost, ASLA, Urban Plenner
SUBJECT: LANDSCAPE VOLUME INDEX
The Planning staff has developed a way to realistically measure
and compare landscaping at a proposed site; the landscape
volume index.
In the LVI, we assume that a site's size is a volume defined by
its two-dimensional square footage, and a third dimension,
height. The height, in all cases, is 20 feet, the height of an
average, mature landscape tree.
So, you could visualize the site as a three-dimensional volume;
which is the full (though impractical) potential for
landscaping--no building, no parking, nothing but mature
trees. This volume is the unattainable goal of 100%. We'll
call it the site volume (Vs).
i ~
J '
5-1
I
F, 'C
i
f :I
Denton City Council
October 3, 1989
Page 2
so, the extent to which this volume is filled up with
landscaping is the Landscape 'Volume Index (1002 is perfect, 10%
is more realistic).
The actual LVI considers the volume taken up by trees, shrubs,
expressed: areas. This
isdcalled dthe vLandscape well as lawn and
Landscape Volume = (Vt + Vg + V1 + Vh + Vb) + (.4 x Vp)
Where:
Vt = Volume of trees in cubic feet (the number of trees
times the square of the radius of the dripline
f times Pi (3.1416) times the average height of
trees five years after installation).
Vg = Volume of the ground cover in cubic feet (the
height of a typical ground cover may be four
inches, or .33 feet).
f
V1 = Volume of the lawn in cubic feet (the height of a
typical lawn may be 1 1/2 inches, or .125 feet).
` Vh = Volume of hedges, shrubs, and bushes in cubic feet
(measured the same way Vt is measured, out
discounting for any overlapping drip areas).
Vb - Volume of berms in cubic feet (using standard
mathematical formulae).
i
Vp = Volume of paving blocks in cubic feet, when laid
on a permeable base (this figure is multiplied by
.4, the approximate coefficient of runoff).
Plug in all the numbers and run the calculations and you have
the raw landscape volume, in cubic feet.
Then simply divide the landscape volume by the site volume
(both in cubic feet) and you have the Landscape Volume Index
(LVI).
LVI = landscape volume
site volume
I
Clearly, there are several advantages to uniformly applying the
Landscape Volume Index to sites--particularly in the City's
entranceways:
i
5-2
I
i
Denton City Council
October 3, 1989
Page 3
1. The LVI is an easily-understood, meaningful, number
that's based on a range of 0 to 1008.
2. It's possible to make 'combinations' of landscape
elements do double duty--such as a berm covered with
ground cover.
3. There is an incentive to plant larger trees (which
screen better, provide more shade, and tend to live
longer) instead of purely decorative trees/shrubs.
The LVI will provide a meaningful measurement for all future
j proposed development, and will provide an understandable
'target' standard for planned developments.
i
3
G. Owen Yost, ASLA
wp
{ 26071
I '
{
i
r 1
i
E
r
5-3
ATTACHMENT 6
DRAFT
Minutes
Planning and Zoning Commission
August 23, 1989
The regular meeting of the Planning and Zoning Commission of the
City of Denton, Texas was held on Wednesday, August 23, 1989, at
5:00 p.m. in the Council Chambers of the Municipal Building, 215
East McKinney, Denton, Texas.
Present: Eulino Brock, Jim Engelbrecht, William Kamman, and Fran
Morgan
Absent: Ivan Glasscock, Judd Holt, and Etha Kiker
Present from Staff: Frank Robbins, Executive Director for Planning
and Development; Elizabeth Evans, Planning Administrator; Joe
Morris, Assistant City Attorney; Owen Yost, Urban Planner; Harry
Persaud, Senior Planner, Lee Allison, Senior Civil Engineer; Renee
3 Baker, Civil Engineer, Water/Wastewater; Jerry Clark, City
Engineer; and Olivia Carson, Clerk-typist
Chairwoman Brock called the meeting to order.
I. Minutes
A. Consider approval of the minutes of the regular meeting
of May 10, 1989989.
Mr. Kamman moved to approve the minutes of the regular
meeting of May 10, 1989. Seconded by Ms. Morgan and 1
unanimously carried (4-0).
i
_ B. Consider approval of the minutes of the regular meeting
of May 24, 1989.
It was moved by Mr. Kamman, seconded by Mr. Engelbrecht,
and
the re,gularumeetingrofdMay 24,t1989prove the minutes of
II. Chi Omega House Corporation A. Z-89-011
Mold a public hearing on the petition of Chi Omega House
Corporation requesting approval of a zoning change of the
Wattam Addition, Lots 1 and 8, Block 2.
Notices were mailed tc 24 property owners within 200 feet
of the site. Four were received in favor and two in
opposition.
STAF~Rr: Mr. Yost stated that sidewalks will be
required along Fannin and Welch Streets. He presented
the staff report to the Commission (attached).
6-1
I
I
t
P82 Minutes nn D d 5``.:~
August 23, 1989
Page 2
Petitioner; Robert Cunningham, architect for Chi Omega,
stated that the zoning change request from Single family
-7 (SF-7) to Planned Development (PD) is to allow the
construction of a sorority house. He said that copies
of the design had been sent to adjoining property owners
and the response was favorable. The University of Norch
Texas (UNT) also gave a favorable response. The new
structure will be compatible with the neighborhood.
Jane Moynagh, 4501 N. Mzjsa, stated that she is the
president of the Chi Omega Corporation. Their plans are
for a homy-like housing facility for 40 students of UNT.
The building will have approximately 9000 square feet of
living space and will be landscaped. ';he parking area
will be lighted. A resident house mother ,rill be charged
with daily operatior of the house and the building will
be locked securely. Chi Omega was founded in 1895 and
is the largest Greek womens' fraternity. The local
chapter was installed in 1953 and has contributed to the
City and the university. Members have been active in
campus honorary and service organizations and have
maintained high scholastic standards. For the chapters
25th anniversary on campus, they gave a $10,000
scholarship to the University. An advisory board of
seven local alumni work closely with the members to
provide council, supervision, and a support structure.
The proposed house will be owned and maintained by a
local house corporation which is governed by a board of
directors made up of seven Denton and Metroplex alumni.
These women assume the responsibilities of managing the
material assets of the chapter and plan for the future
development of these assets and provide stability for an
ever-changing membership. A concern of the City staff
was the generation of additional traffic in a low
intensity area and tha compatibility of the proposed
structure to the surrounding neighborhood. Because of
the close proximity to the university, the students are
within walking distance. Additionally, traffic could be
minimized by virtue of the fact that friends living
together often travel together. The structure will look
residential and will greatly onhan-e the area and add to
the value of surrounding property.
Ms. Brock asked how many parking spaces there would be.
Mr. Cunningham said that there would be 50.
6-2
i
f
l
i
PAZ Minutes
August 23, 1989
Page 3
Mr. Er.gelbrecht asked why the western edge of the parking
lot was designed all the way to the property line without
a groenbolt.
/ Mr. Cunningham answered that there is a dense row of
trees along the property line. It can hardly be seen
through. The trees will remain. The parking lot was
designed to save as many [.rose as possible.
Mr. Kamman asked if this c,ito would be the beginning of
a sorority row.
Mr. Cunningham said he did not know of such plans but it
would be a good lo:.ation.
T,N FAVQg: Phil I)i: 01, 303 E1 Pasoo, stated that he is
the Vice Prosicen~ of Fiscal Affairs at UNT. The Chi
Omegas have boon ~xcollont citizens at UNT and in Denton.
They are part of the leadership on campus. Growth in the
80's has stressed university housing. The facilities are
full. Currently, the sorority members are living on
campus. The proposed new house would free existing
housing for other students and will upgrade the
neighborhood. It is not in conflict with the university
master plan and it will be good for the Greek system.
Ms. Brock asked if the University is planning a
fraternity row.
Mr. Diobel answered that it mould be within two or three
blocks of Lh:j Chi Omega site along Highland, Maple, and
Eagle Streate. The row has boon approved by the board
of regents.. Three fraternities have signed up to build
facilitie3. They have each put up 16,000 and will be
building within the next two years.
1
Mo. Brock asked if the University will continue to own
the land.
I
M^. Diebel said yes. The fraternities will lease it for
$1 per year; however, they must live within restrictions
and use their own resources to build the housing.
Ms. Brock asked what would happen if the University
k decided it needed the land before the lease is up.
I 6-3
i
{
i
k
PSZ Minutes
August 23, 1989
page 4
Mr. Diobel said that the fraternities would be
compensated and provided with other space on the campus.
He said he does not think that they would be required to
give notice along a specific time period but would
certainly give a reasonable warning.
Ms. Brock asked if the University has plans for a
sorority row.
Mr. Diobel said that discussions were hold with all the
sororities. They have difforent r.)riorities than the
fraternities and are larger groups. They need larger
amounts of land than the university is willing to commit.
They are eligible to build along fraternity row.
Mr. Engelbrecht asked why the fraternities ware being put
together instead of at different locations.
Mr. Diobel replied that there are no other largo lots
within the university master plan. The university is
committed to having space for them and the chance of
taking the sites away from the fraternities is slim. The
university is also committed to strengthening the Greek
organizations.
14s. Brock stated that in the cities study of sexually
oriented businesses, they debated concentration versus
- diversity. There are certain qualities about
fraternities that could affect neighborhoods.
Mr. Engelbrocht stated that in his underc';nding of land
use planning, there are certain values in having
diversity of hcusing as opposed to concentrations of one
kind.
Carroll Goan, 110 Skyline, Argyle, stated that he owns
property adjacent to the subject property and across the
street from it. He has soon the architect'e rendering
of the proposed He exterior, It ipleaaod imposing
have the
structure by his property. This request lo not an
example of spot zoning. The proposed zoning will take
up one-fourth of that block. There is an existing fence
separating his property from the zoning because the
current rental houses on the property have dogs in the
back yard.
6-4
3
i
9
P&Z Minutes
August 23, 1989
Page 5
He said that he used to live on Eagle and could walk to
school faster than driving there and finding parking.
Most of the residents of his apartments walk to the
- University. The girls in the sorority will probably walk
also. He supports the project. He owns one of the lots
the Chi Omegas are buying and is tired of mowing it.
Ms. Brock asked if there is an existing sidewalk along
Welch.
Mr. Goon said that thorn is no sidewalk on that block.
There is a city easement along it. The street may be
widened in the future and turned into a collector street.
Ms. Brock stated that sidewalks are required in now
developments. This will be important for students that
walk.
Mr. Goon said that most of the girls will probably cut
through his parking lot. Another sorority looked at the
property last year but ho has not heard back from them.
Sidewalks are definito Iy needed in the area because there
are a lot of walkors.
OPPOSE None present.
I
Me. Brock stated that in one of the roply forms there wat.
reference to a right-hand turn lane. Jewel Nichols iE
concerned about the City taking her property.
Mr. Clark said that it will be a left turn lane onto
Eagle off of Ave. A and is in the Capital Improvements
Program (CIP). It will take about three feet of Ms.
Nichols property and would not effect the zoning change.
Mr. Engelbrecht asked the construction date of the
sorority house.
Mr. Cunningham said that it would be 1997 at the latest
but they hope to begin as soon as possible.
Mr. Engelbrecht asked if consideration was given to
buffer greenery along the western boundary of the
property.
i
Mr. Yost said that a six foot wooden fence should be
sufficient and there is a three foot strip of grass
between the parking lnt and the adjacent property.
6-5
I
i
I
•.e! 4 v. r. j[rsjj
r t'
Y
D R A
PRZ Minutes
August 23, 1969
page 6
Mr. Engelbrecht asked if the trees on the adjacent
property are of the protected type.
Mr, Yost said that some ara but most aro not worth
saving,
Mr. Engelbrecht said that the goal in the De m.on
Development Plan is to presorve older neighborhoods and
he is concerned about the parkinq lot running right up
to single family dwellings. The sorority house is really
a multi family usa and buffers are often used for multi
family. He asked if trees could be planted as a buffer.
Mr. Yost said yes but they would be bumped by the cars.
Mr. Engelbrecht asked about moving the parking lot back
toward the sorority house.
Ms. Brock said that would entail cutting trees that they
are trying to preserve.
Mr. Engelbrecht stated that it is a question of trading
the trees for additional buffering of the residential
area. If he lived there, he would rather have the
additional buffering.
~ Mr. Yost said that the tree line is right on the property
line.
Mr. Engelbrecht suggested putting vines on the fence.
Mr. Yost, replied that it would help absorb the sound but
the plant choice would have to be looked at. Some vines
retain moisture and rot wood.
Mr. Engelbrecht pointed out that if the parking lot were
moved throe feet to the east the trees would not be
affected.
Mr. Cunningham said that the parking lot could be moved
back. The fence is a City requirement but they are
willing to do a hedge instead of a fence and will try to
save the tree l ini.
i
Mr. Engelbrecht stated that he was thinking of having
both the fence and trees. Upper and lower buffers will
protect the neighbors from lights and sounds.
I
t
I
I
I`
CD ~Ir ~
PdZ Minutes
August 23, 1989
Page 7
Mr. Cunningham said that the adjacent property is for
sale at a price that does not suggest it will be used
for single family dsvolopment.
Chairwoman 3rock closed the public hoaring.
DECISION; Mr. Kamman stated that if the western boundary
of the parking lot is moved throe feet to the east and
additional buffering provided with trees and shrubs
approved by the staff, it would be good for the
noighborhood. He moo,ad approval of the request with the
aforomontioned r,,ditions.
Ms. Brock seconded tho motion. She said that one problem
with anything other than eingle family is that other
people in an area also begin to want more intense zoning.
She would like to preserve the neighborhood against
another concrete city. Housing variety is desirable.
Some of the single family houses in the neighborhood have
been renovated recently and are attractive. Many houses
in the neighborhood are rental and lots of students want
to rent houses. She is concerned about traffic to UMT.
It is good for sororities to have their own houses within
easy walking distance. The intensity in the area will
be increased but not as much as other uses would cause
and the neighborhood will benefit from the request.
Motion carried unanimously (4-0).
Mr. Allison and Ms. Baker left the melting.
B. Consider recommending approval of the preliminary roplat
of tho Wattam Addition, Lots 7 and 8, Block 2 into Lot
7R, Block 2.
aJU_E REPORT: Mr. Yost presented the staff report to the
Commission.
I Mr. K.amman moved to approve the preliminary replat of the
Wattam Addition. Lots 7 and 8, Block 2 into Lot 7R, Block
2. Seconded by Mr. Engelbrecht and unanimously carried
(4-0).
I
i
6-7
I
i
I
1,71 (rys tvL )G •1
`ff1' SrA?F REPORT
To: Denton Planning and Zoning Commission
Ease No.: Z-89-011 Aeeting Date: August 23, 1989
GENERAL INFORHArioN
Applicant: lohert T. Cunningham
54J1 N. Central Expressway
Suite 230
Dallas, TX 7520S
Status of Applicant: Representative
Owner: Chi Omega House Corporation
2901 Carmel
Denton, Texas 76105
Requested Action: A change in zoningg from single family
residential (SF-7) to Planned
Development, and approval of a
Detailed Plan.
i
Location and Size: 1.OS4 acres located on the northwest
corner of Welch and Fannin Streets,
generally southeast of the campus of
the University of North Texas, in the
City and County of Denton, Texas.
Surrounding Lani Use
and Zoning: North - apartments/mufti-family
zoning.
South - (across Fannin Street) -
apartments/multi-family
zoning.
East - (across Welch Street) -
apartments/multi-family
zoning.
West - single family
structures/single-family
zoning (SF-7).
Denton Development Plan: Low intensity area, number 118.
I
s
I~
I
I
i
-a 5e a'd - Ulll
Page Two
SPECIAL INFOR14ATION
Transportation: Toe property nas frontage on both
Welch and Fannin Streets. Welch
Street functions as a north-south
collector street, having a
right-of-way of SU feet. Fannin
Street is an east-west local streeet,
having s 60 foot right-of-way. The
Detailed Plan proposes to have
one-way traffic entering the parking
area from Welch Street and exiting
onto Fannin Street. fne entrance and
exit are each 1S feet wide, in accor-
dance with standards, and sufficient
stacking room has been providee.
Utilities: Existing utilities are adequate for
the proposed use. The appllcant
proposes to tap onto a six inch
sanitary sewer line In Welch Street,
in addition to two taps onto an
existing water line, also in Welch
Street, for the fire sprinkler system
and for domestic water and the lawn
sprinkler.
Drainage: On-site drainage will be directed,
via sheet flow, to Welch Street.
Then, drainage will flow into
existing storm sewers.
i
Vegetation: There are almost two dozen mature
trees in varying degrees of health on
the site. The applicant
proposes to
preserve the majority of them, by a
combination of sensitive design, fer-
tilizing and pruning prior to con-
struction, and the use of porous pipe
for watering and paving-covered
roots. Approximately five trees will
be removed in order to accommodate
the parking lot. The preserved exis-
ting trees, together with vegetation
proposed to be planted by the appli-
cant, nearly double the landscaping
required by the Landscape Ordinance,
and are markedly higher than any
other multiple-resident structure in
the area.
i
k
6-9
I
i
t
i
F
t
base :•dv-Jll} "
Page Three
ii is roRY
This tract is contained wttttin the aattam Addition, which was
first surveyed and sold in 1:03 as single-family lots. With the
growing influence of the University of Nortn Texas, and the
demand for student housing, many lots in the addition are toned
multi-family and used as student apartments. Tne remaining
single-family homes, with several exceptions, are rental
properties, often in need of repair.
Currently, most of the proposed tract is vacant. On the north.
I however, there are two residential structures which are proposed
for demolition.
Upon recommendation by the Planning and Zoning Commission, this
item ,.ill be forwarded to the City Council for a Public Hearing.
ANALYSIS
Despite pressure from the University of North Texas, the area is
primarily residential. The Denton Developpment Plan directs that
! the residential character of the neighoorhood be preserved as
much as possible. To quote: "Special consideration shall be
Won
given for the protection of older residential neighborhoods."
response, the applicant has placed the large parking area
wnicn is necessitated by such a development away from the public
streets, bgnind the building, as directed by the Plan. The
building itself is intended to have a residential appearance,
and the applicant is working with the staff and the neighborhood
to this end. The Plan also suggests "Strict site design review
for all projects within 1,600 feet of existing single family
dwellings" such as this. Such site plan is integral to the
planned development process chosen by the applicant.
'rho Plan also spells out criteria for reviewing toning changes
in existing neighborhoods. They are 1) Upgrading or elimina-
ting older deteriorating structures will be encouraged to the 1
extent that it is judged positively for the overall
neighbor- noon. 2) Review criteria will consider the impact of proposed
development in areas adjacent to or nearby existing older neign-
borhoods. Proposed development in nearby neighborhoods should
be judged by the same design and development standards that
would be applied if the development was proposed !a the existing
neighborhoods. Another criteria of the Plan is that any pro-
posed development near the University of North Texas not
conflict with any Master Development Plan of the University.
The University has no plans for academic buildings or dormitor-
ies in this area and is content to let the demand for housing
E govern the land use.
E
6-10
i
I
I
1
9
, (Case :•dv•Jtlf
ti Page roar
ANALYSIS (continued)
Tne planned development toning provides the most control available
to implement the design intent, and to ensure compatioll!;y with
the neignbornood. In the planned development process, many
aesthetic factors, and factors outlined in the Denton Development
Plan will ensure adequate opportunity to review sucn things as
materials, plantings, and setbacks. Abundant landscaping is being
preserved or planted in consideration of Denton's Landscape and
Tree Preservation Ordinance. Landscaped setbacks shown in the
Detailed Plan are, at least, eq-jivalent to those of adjacent
residences Screening has also been provided to buffer the I
existing single-family structure to the west, in the form of a 6
foot tall wood fence running approximately 180 feet along the west
property line of the tract.
1
Fhe Ueaton Development Plan directs that in areas where dispropor-
tionate allocation of intensity has already granted, or in areas
of left out lots, the proposal will be evaluated in reference to
the least intense, most logical land use. Id addition, the effect
on the surtound.ng areas and compatibility with other policies of
the Plan should be reviewed. Staff, upon review of the practical-
ity of various types of development, envisions that future devel-
opment of the site as single-family homes is unlikely. One of the
most logical uses is a sorority house, particularly one within
~I
walking distance of the UNT campus.
RECOMMENDATION
c
I
Staff recommends approval with the following condition:
1. Measures be taken wnien are satisfactory to the staff
to protect and preserve those existing trees to
remain, both during and after construction.
ALTERNATIVES
1. Approve petition _
2. Approve petition with additional conditions
3. Deny petition
ATTACHMENTS
1. Location Map
2. Detailed Plan
3. Development Standards
4. Intensity Map and Statistics
1903x
I E-11
I
i
C
S Y
NO.
AN ORDINANCE OF THE CITY OF OENTON, TEXAS, PROVIDING FOR A CHANGE
FROM SINGLE FAMILY - 7 (SF-7) TO F'.ANNED DEVELOPMENT (PD) ZONING
DISTRICT CLASSIFICATION FOR 1.054 ACRES OF LAND LOCATED ON TAE
NORTHWEST CORNER OF WELCH AND FANNIN STREETS, AS MORE PARTICULARLY
DESCRIBED HEREIN; PROVIDING FOR THE APPROVAL OF A DETAILED PIN;
FOR THE DISTRICT; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF
$2,000.00 FOR VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, Chi Omega House Corporation has p:titioned for a
change in zoning from single family - 7 (SF-7) to planned deve-
lopment (PD) zoning district classification for. 1.0549 acres of
land located the northwest corner of Welch and Fannin Streets
to provide for the use of the property as a sorority house; and
WHEREAS, on August 23, 19890 the Planning and Zoning
Commission held a public hearing on the petition and recommended
approval thereof; and,
WHEREAS, on October 3, the City Council held a public hearing
on the petition, notice of which was given as provided by law;
NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
6ECTION,I. That the 1.054 acres of land described in Exhibit
"A", attached hereto and incorporated herein by reference, is
changed from single family - 7 (SF-7) zoning district classifica-
tion to Planned Development (PD) zoning district classification
under the comprehensive zoning ordinar.•e of the city of Denton,
Texas.
SECTION_IIi That pursuant to the provisi%ns of article 11
of Appendix B - Zoning of the Code of Ordinances, the Detailed Plan 1
designated as Exhibit "B", attached hereto and incorporated herein
by reference, is approved for the district, so that hereafter such
land shall be developbd, used, and maintained in accordance with
the detailed plan herein approved.
SECTION III, That the Zoning Map of the City of Denton,
Texas, adopted the 14th day of January, 1969, as. an Appendix to
the Code of Ordinances of the City of Denton, Texas, under
ordinance No. 69-1, as amended, is further amended to show such
'I
Ordinance No. 69-11 as amended, is further amended to show such
change in the zoning district classification and use designation
for the property described.
SF.CTIO jy1, That any person violating any provision of this
ordinance shall, upon convi.:tion, be fined a sum not exceeding
all $2,000.00, Each that a
constitute a separate and i distinct offense Hance is violated
shall
fFCTION V. That this ordinance shall become effective
fourteen (14) day from the date of its passage, and the City
to be secretary hereby directed
the Denton R cord-Chronicle, the official
newspaper of the City of Denton, Texas, within ten (10) days of the
date of its passage.
PASSED AND APPROVED this the day of 1989.
i
4
RAY STEF::ENS, MAYOR
ATTEST:
JENNIFER WA.LTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCHO CITY ATTORNEY
BY: bv~i
'I
4
Z-89-011/Page 2
k
!
t ,
h M.~
Gti" . V l .M11..'jq
l
EXHIBIT "A"
OWNER'S CERTIFICATE AND DEDICATION
STATE OP TEXAS:
COUNTY OP DENTON: WIIEAEAS, Chi Omega !louse Corporation is the
owner of that certain lot, tract or parcel of land situated in the
Eugene Puchalski Survey, Abstract Number 996, in the City dnd
County of Denton, Texus, being all of Lots 7 and 8, Block 2 of
Wattam Addition, an addition to "he City of D-nton, Denton County,
\ Texas, according to the plat thereof recordev in Volume 86, Paq,S
` $26 and 527, Deed Records of Denton County, Texas, and being inure
particularly described as followar
BEGINNING at an iron rod set for corner In the west line of Welch
Streit, a public roadway having a right-of-way of 80,00 feet, and
in the north line of Fannin Street, a public roadway having a
right-of-way of 60.00 feet, said point being the southeast corner
of said Lot 8=
'
THENCE West, 215.00 feet with said north line of said Fannin
Street to an iron rod found for corner, said point being the
southwest corner of said Lut 7j
THENCE N 01 01'09" W, x10.65 fact with an old fence line to an
iron rod found for turner:
i
THENCE N 88 45142" t, 216,31 feet to an iron rod set for corner in
said west line of said Welch Street
THENCE S 00 39'41" E, 215.30 feet with so d west line of said
Welch Street to the PLACE OF BEGINNING and containing 1,054 acras
of land.
I ,
I
~ Z-89-011
jI
~l
a
EXHIBIT "B"
DETAILED PLAN FOR CHI OMEGA, CONSISTING OF:
1. Detailed Site Plan (1 page);
2. Development Standards (4 pages).
rte,
1
I `
i
II
Z-89-011
f
I
,o
i
i
f
i
1
I
III
'i
DATE: 10/3/89
CITY COUNCIL REPORT FORMAT
8
'r0: Mayor and Members of the City Council '
FROM: Lloyd V. Harrell, City Manager
SUBJECT: V-48 - VARIANCE OF ARTICLE 111, 4.04, SECTION Q OF APPENDIX A FOR
THE RNDRES ADDITION, LOT IR, BLOCK 1.
RECOMMENDATION:
The Planning and Zontng Commission recommended a partial variance at
its September 13, 1989, meeting. It was the Commission's recommen-
dation that 379.7 feet of sidewalk not be constructed, and that
502.53 feet be built according to City regulations, as shown on the
attachment '1. (4-2)
SUMMARY:
The requested variance is from the complete requirement of Article
4.04 Q, of Appendix A, Code of Ordinances, which requires sidewalks
to be built along one complete side of perimeter streets. The
Endres Addition is a proposed replat immediately west of Interstate
35 at Airport Road. The proposed purpose in an addition to a
warehouse and related offices for the Mille! Brewing Company of
Denton. The applicant was present At the scent Planning and Zoning
hearing and agrees that the partial variance is the most appropriate
solution.
BACKGROUND:
The variance procecure in the Subdivision and Land Development
Regulations states that all of the following criteria must be met to
grant a variance:
1. Grantin3 of the request would not violate any master plan.
2. The special or peculiar conditions upon which the request is
based relate to the topography, shape, or other unique physical
features of the property, which are not generally common to 1
other properties.
3. The special or p?culi.ar conditions upon Yhich the request is
based did not reault from or were not created by the owner's or
any prior owner's action or omission.
Specific findings associated with each criteria should be stated if
a variance is to be .approved.
The Planning and Zoning Commission's findings in support of its
recommendation for the variance are attached.
FISCAL IMPACTS None.
Nespec ily aubmitte S
Prep f oy arrel
City anger
Urban Planner
Approve i
F an H. obbins, AICP
Executive Director
Planning and Development
I
i
RECOMMENDATION TO CITY COUNCIL
-V-4T -
The Planning and Zoning Commission held a public hearing on September 13, 1989
to consider the petition of Metroplex Engineerin requesting a
variance of Article II11 4.071, , Sidewalks of Appendix A of
the Code of Ordinances of the City of Denton, Texas.
After consideration and discussion of the following criteria, the Commi:sion
recommended ~oroval off a variance for 379.7 feet of sidewalk by a vote of
4 - 2 _ at its meetng on §U ember 13, L989 The commission based
its recommendation on the folluwing responses to the eriteri3:
1. Granting of the request would not violate any master plans.
The Denton Develo rent Plan emphasizes the need for sidewalk,i but dues
not specifically addreas them by street location.
2. The special or peculiar conditions upon watch the request is based relate
to the topography, shape, or other unique physical features of the prop-
erty, which are not generally common to other properties.
The topography of this portion of the site does not al.luw for the
development of safe, usable sidewalks between the guardrail and the
pavement and the steepness of the embankment would not allow the sidewalk
-
to be located at a distance from the roadway.
3. T'ne special or peculiar conditions upon which the request is based did not
result from or were not created by the owner's or any prior owner's action
or omission.
The configuration of the site in relation to the highway road is
not the result of any action by the owner or any prig?r owner.
1
Respectfully submitted: ~~Jj
&4,&4 v ~ ~j~~ _
Euline BBrock, Chairman
i
I
I
I I
I
I~
i
i
r,"« awa 1
a! ~G
ATTACHMENT 1
P89016MORTI
L_7LJL---)u ut
9 K
SCRPItII[ a Q , ~ _ ~~T
y QL^___-=3U0LW,
LAMA
II
AIRPORT 00
- Yrf
POAIIII NON916 OATR 9>~s s1
i
I~
Ik
t
T-Z
r
;~,saaa
~3G~I~iis~~~~. ~1 1 sa¢~.s. ~ tovlNC c1
sf~ 1~#~ I Q y 219
Rr y I~,~I e a
® } } r lei r INS
&Tw
ytjg~
~ N
I
IV TI
~ Iz d
' f'MFH 15115 AI POR r ROAD
2Y2.L~i - -
- - - ' ~LAl2
w
r ~
ATTACHMENT 3
Pd2 Minutes r
September 13, 1989 Pago 2 rrrsss GGG ~ i
III. Endres Addition
A. Y:a•
Hold a public hearing on petition of Metroplex
` Engineering requesting a variance of Article III, 4.04,
I Q, Sidewalks to the Denton Subdivision and Land
Development Regulations, for the Endres Addition.
Five reply farms were mailed to surrounding property
owners, three wero received in favor and zero in
opposition.
a STAFF REPORT: Mr. Yost presented the staff report to the
Commission (attached), He said that the 20 year plan
being developed calla for hiking and biking ways within
the City. He added that the applicant feels that a
variance is needed because the terrain is not good for
a sidewalk and it would interfere with a drainage ditch
which would have to be romodolod. The ditch is a foot
deep in the center. Ho said that the applicant also
fools that there would be safety problems having a
1 sidewalk at this location. Mr. Yost showed the
Commission slides of the subject site.
Ms. Brock asked if a trail had boon worn along the side
of the road.
Mr. Yost replied that there appears to be one. He said
that there is an existing sidewalk on the bridge across
Airport Road.
Ms. Brock asked if the curving asphalt surface is
required by the Highway Department,
Mr. Yost stated that it is merely the shoulder of the
road.
Mr. Engelbrecht asked where staff 1s recommending the
sidewalk be constructed.
Mr. Yost stated that the sidewalk would have to be built
between the curb and the guardrail. It is the most level
place. As close to the rail as possible would bo boat.
A sidewalk elsewhere would require a retaining wall and
would probably drain poorly.
Mr. Engelbrecht asked if building a sidewalk between the
curb and the guardrail would match the existing sidewalk
design on tha bridge.
3-1
I
I,
1
N
jFF
i
PSZ Minutes
Soptomber 13, 1989
Page 3
Mr. Yost said yes.
Mr. Engelbrecht asked if the sidewalk in front of the
actual building could be built between tho ditch and the
sidewalk.
rtr. Yost replied that the ditch would still have to be
reworked.
PETTT_who: Bud Hauptmann, Metroplex Engineering, passed
out photographs of the site. He stated that he obtained
a letter from Dwight Byrd of the State Highway Department
about their policy. They only put sidewalks along the
bridge because it is a state requirement. If a car
stalls along the bridge, the people can get off of it
safely. The bridge sidewalks are for safety purposes,
not for normal pedestrian traffic. A sidewalk connecting
to the bridge would have to be right up against the
guardrail and the petitioner fools it would be unsafe to
encourage pedestrian traffic in this area. The Highway
Department said that they would approve a request from
the City but they might have to construct retaining
wall
~ guardrail and E.andwicfi. the sidewalk.
would be required and the Highway Department would need
additional right-of-way. He said that he has not seen
ji a path. The bridge sidewalk ends abruptly at the road
shoulder. There is 3 lot of truck traffic. Tho so
is probably from trucks cutting the curve too
sharply. The patitioner fools that the first requirement
for a sidewalksVer Thit; ure mot. be There is the works but it does not
exist at this time. They support sidewalks but there are
exceptions and it would be dangerous to have one in this
case. He added that the slope of the ditch in front of
the building would make a sidewalk difficult. The
Highway Department installed the ditch and doing
Earthwork would affect it.
Mr. Engolbrocht asked how far back the property line is asked if there was in front of tha building.
question about putting the sldowalk on the property and
being able to maintain enough parking spaces.
Mr. Hauptmann said that it is 30 feet from the back of
the curb to the property line where the car stol.s are.
At the present time there is 18 and one-half feet for
the parking spaces.
Mr. Clark said ,.hat amount exceeds requirements.
3-2
i
I
I
h
ti
F
~ AFT
PdZ Minutes
September 13, 1989
Page 4
I
Mr. Hauptmann said that 20 feet is required for 60 degree
angle parking. There is not room for a sidewalk,
parking, and a fire land.
Mr. Clark stated that the State does not allow anything
for the first three foot in front of the property line.
That area is for utilities. The sidewalk would have to
be between 3 and 10 feet out from the property line.
Mr. Engolbrecht asked where the property frontage begins
to narrow.
Mr. Hauptmann said about 100 feet south of the south
driveway. The railroad right-of-way is on the west side
of the property.
IN FAVOR: Clyde Fisher, owner of the uroperty, stated
that the center part of the tract was originally platted
in 1982 and the building was built according to City
codes. The cost of the sidewalk is not drastic. It is
the safety factor that is a concern and the liability.
The insurance company does not want to insure the
sidewalk. Fifty Peterbilt trucks go by the site every
day. Mr. Fisher said that he has seen numerous accidents
and the curb is run over frequently. Their own trucks
have a hard timra making the corner. He added that he has
not soon a jogger by his building in the past 8 years.
It is a madhouse on Airport Road ct 3 p.m. He questioned
who would be liable for accidents along the sidewalk. '
Miller of Denton employs 28 people and loves Denton. They
hopo to grow and expand in Denton but do not want
liability alorg a sidewalk at this location.
OPPOSED: Mitchell Turner, 2118 Stoneridge, )toted that
the citizens of Denton have clearly indicated that they
want the City to sti,:k to its rules and not grant
variances. Sidewalks are an important part of plans for
Denton's future and should not be waived unless there
truly are safety problems. He asked that the variance
be denied.
STAFF RECOMMENDATION: Mr. Clark stated that the only
real concern about safety would be the guardrail posts
giving enough stability. If the Commission does not want
the sidewalk on the traffic side of the guardrail, the
posts would probahly give enough stability that the
sidewalk could be hung off the other s1do without
spending as much on a retaining wall as would normally
bo required.
3-3
I
I
.r;
DRAFT
PdZ Minutes
September 13, 1989
Page 5
Ms. Brock asked Mr. Clark his evaluation of the safety
issu3.
Mr. Clark replied that in an urban situation unless there
is a master plan for everything, there will be places
where sidewalks will not be in the most opportune places.
Some of the sidewalks built along Teaslny Lane and North
Locust would be nice if they were separated by 8 to 10
feet. But even if they were on that level, if someone
lost control of their car, they could still run up there
and hit somebody. There is not a lot of guarantee
regardless of where sidewalks are placed that there will
be ah•nlute safety unless there is a barrier. He said
f that hb is not aware of any laws that require sidewalks
to be separated by barriers when there is a lot of truck
traffic. The pedestrian traffic will not be vary heavy
between 3 Ind 6 o'clock. Most of it would be between 10
a.m. and 2 p.m. and would mostly consist of LINT physical
education students and ,loggers.
I
Ms. Brock asked about the liability.
Mr. Clark answered he assumed it would be a public
improvement and fall under laws a)ncerning infra-
structure.
E
Mr. Morris said it would be the City's sidewalk. Having
a sidewalk is not an assurance of safety frorr negligently
operated vehicles.
Mr. Clark stated that the sidewalk must meet engineering
guidelines. The final plans would be taken to the State.
Mr. Byrd has writton that he would prefer not to approve
the sidewalk in their right-of-way but would do so at the
City's request. The sidewalk would be a public
improvement and would be bonded in an e3crow account.
It would be built in conjunction with the building on
this site. It could be done for t16-i5 dollars a aquare
yard in the flat area. Final coat to the petition would
be several thousand dollars but that is not the issue.
The guardrail is sturdy and rabar could be attached to
the poles to put the sidewalk away from the traffic side
of guardrail. If the State wanted to move the guardrail,
replacing the sidowalk would be the City's
responsibility.
I
Mr. Engalbrecht asked if the rest of the property around
the bridge is State right-of-way.
i I 3-4
a
i
I
ti
DRAFT
P62 Minutes
September 13, 1989
Page 6
Mr, Clark said yes. The slope is right-of-way. The
State often buys large areas for future road expansion.
When Airport Road is widened, there is a good chance the
corner by the bridge will be used.
Mr. Engelbrocht asked if the sidewalk could curve down
the slope and up into Airport Road,
Mr. Hauptmann replied that the railroad right-cf-way is
a uniform width of 100 feet. It continues past where
Miller of Denton's property comes to a point. East of
the railroad is highway right-of-way. A sidewalk coming
parallel to the property line whore it comes to a point
would have to end at tho railroad right-of-way or
transition up and down the steep slopes of the bridge
over the railroad and would then have to pass through the
guardrail.
Chairwoman Brock closed the public hearing.
QI,CUSSIQN AND DECISION: Mr. Bolt stated that something
to keep in mind is what will be happening down the road
to the north. No said that he is in favor off the
sidewalk in front of the building and would be willing
to give a partial variance, Ho does not see whore the
k sidewalk would connect to Gy the bridgo.
E Ms. Brock asked if the sidowalk could be made conditional
upon further development.
Mr. Robbins stated that the trigger for public
r improvoments io development. The Commission can not make
them build a sidewalk upon completion of a project by the
State. The Subdivision Regulations call for a sidowalk
.inloss a variance is grantod,
Mr. Engalbrocht, stated that on Woodrow Lane the sidewalk
is up to the curb. He does not sei the differoieo,
i
Mr, Glasscock stated that ho is concerned about safoty
and the need for the sidowalk is questionable at this
time. It could ~o in front of the building but he has
doubts about the need by the bridgo.
3-5
i
t ~
r 1
1
z
i
NZ Minutes
Septombor 13, 1989
Fago 7
Mr. Holt stated that the petitioner does rnvet some of the
requirements for a variance, To the north of the
property there is potential fer tho sidewalk to be
connected with some other dovelopmont. He does not see
that potential to the south. If the City sees a need at
a later time, it can ba built then. He moved to grant
the variance from the point where the property line
changes direction to angle toward the railroad right-of-
way for 379.7 foot because of topographical problems and
because granting the roquost would not violate the master
plan. The sidewalk will still be required along 502.63
foot of frontage along the service road.
Mr. Robbins stated that the Denton Development Plan
emphasizes the need for sidewalks but does not call for
them specifically on Airport Road or the I-35 Service
Road.
i
Mr. Clark disagreed with tho interpretation.
Motion socondod by Ms. Kikor and carried (4-2), Ms,
Brock and Mr. Engolbrecht voted no. 1
B. Consider recommending approval of the preliminary roplat
of the Endres Addition, Lot 2, Block 1 into Lot 1R, Block
~ 1.
PTAFF REPORT;
Mr. Yost presented the staff report to the
Commission (attached).
Mr. Robbins said that Mr. Morris has indicated that the
fire flow issue r.hould be processed as a variance rather
than as an exception. Fire flow standards cannot bo met
for this subdivision. The Subdivision Regulations
specify when an exception is applicable to certain
situations. For a variance, the situations are not
spelled out and the guidelines are more broad, The way
the ordinance is written, there are no situational
I standards that would apply for the exception. So it
' looks like a variance but they are calling it an
exception. The eocund issue is that the ordinance does
not address the City Council. 'rho variance section
requires the City Council to make final determination.
Mr. Morris has suggostod that the fire flow issue be
handled from a legal perspective as a variance because
there are no standards laid out in the ordinance for an
exception.
3-6
1
1
r
DATE& 9/13/d9
PLANNING AND ZONING COMMISSION REPORT FORMAT
T03 Planning and Zoning Commission
FROM: Owen Yost, Uroan Planner
sualECTt VARIANCE OF ARTICLE III, 4.04, SECTION Q OF APPENDIX A FOd THE
ENDRES ADDITION, LOT IR, BLOCK 1.
ttECOMMENDATIONt
The Development Review committee recommends denial.
SUMMARY1
Tne requested variance is from the requirement of Article 4.04 Q, of
Appendix A, Code of Ordinances, which requires sidewalks to be built
along one side of perimeter streets.
The Endres Addition is a proposed replat imaediitely west of
Interstate 33 at Airport Road. The proposed purpose to an addition
to a warehouse and related offices for the Miller Brewing Company of
Deatoae The applicant feels that a variance should be recommended
due to considerations of safety, coat and low predicted use.
I I
i
BACKGROUND,
The variance procedurb to the Subdivisioo and Land Development
1 Regulations statei that all of the following criteria must bs met to
grant a varisacer
1. Granting of the roquest would not violate any master plan.
2. The special or peculiar conditions upon which the request Is
based relate to toe topography, shape, or other unique physical
features of the property, which are not generally common to
other properties.
3. The special or peculiar conditions upon which the request is
based did not result from or were not crested by the owner's or
any prior owner's action or omission.
The City Staff has analyzed this request and the subsequent
recommendation is capsu.lieed in a memorandum dsted September S,
I 19890 which is included.
City Staff feels that two of the three criteria for granting a
variance have not been met.
i
3-7
1929:/2 {
J
j
1 ~
,I
r
i
-
y
1
f
I
I
I
i
I
I
it
I
~ L
DATE: 10/03/89
C [TY _COU¢'C [ L_WORT_ FORMAT
TO: Mayor and Members of the City Council
[ROM: Lloyd V. Harrell, City Manager
SUBJRCT: PRELIMINARY RRPLAT OF TNCI 9ND999 ADDITION, LOT 2, BLOCK 1, INTO LOT
IR, BLOCK 1
I
ItBCOMMENDATION:
The Planning and Zoning Commission recommended approval at its
September 13, 19139 meeting; contingent upon City Council approval of
f the partial sidewalk variance, (6-0)
SUMMARY:
This is a 2.9 acre tract located immediately west of the Interstate
35W service road, and north of Airport Road (FM 1515). The tract is
zoned light industrial (Ll). All adjacent land, as well a9 land
across streets, is oleo toned for light industrial use. The site to
shown in the Eugene Puchalskl Survey, Abstract No. 596, in the City
and County of Denton, Texas. Development as an expansion of a
warehouse, with related offices, is proposed.
BACKGROUND:
A partial variance of typical sidewalk requirements to being
sought. The Planning and Zoning Commission recommended a partial
variance to the minimum oidewalk requirement eltminnting 379.7 feet
of sidewalk. The applicant ha3 agreed to request Council's approval
of' the partial variance, instead of the complete variance that was
originally sought.
i The applicant will extend an 8" water main approximately 525 feet to
` the southern tip of their property in a 20' utility easement prior
to issuance or a building permit in accordance with the Sn`,divioion
and Land Development Regulations, The proposal 8" extension will
connect to an existing le" water main located south of Airport Road.
City services and facilities, including Crater, gas, sanitary sewer,
telephone, electrical, and solid waste, are available. The site to
in the Special Activity Purpose District, established by the Denton
Development Plan.
The plat conforms to the minimum requirements of the Denton
Subdivision and Lend Development Regulations with the approval of
the partial variance.
III
I`
f
City Council Format
Rndres Addition
Page 2
PROGRPMRy DEPARTMENTS OR GROUPS A MCCTBD:
No City program will be impacted abnormally.
FISCAL rMPACT:
The City's tax base will be expanded.
Respect ly submitted:
Prepared b : ~oy a reli 'te
City anagar
Owen Yont, ASLA IV1' -
Urban Planne
Apps oY d: t
f Frank H. Robbins, A1CP
Executive Director
Planning and Development
2725s
1
i
Ji
J1
i
i i
i
I
i
I
{i
1
P 8 9 016 ATTACIIMt7NT I
i
7
ULJLj l-~c=
NAPIS
W. OAK
ME&
i
d leroer er .
I
Fil
ICAll NOMIL CATI q e ~1
I
1
I
k`
A
6
p
ATTACHMENT 2
~2~4~~n~1~1~ 1 1` 1 eo~o-uc219.38' rohlsy ~ ~t-
i~73"~n
1} }I4 =pr r
U
,
- to
} I rl P o J
-1
31
- pit
r [s 1 } I f f l 1 1
s z F 1 F'M 1515
r .
1
4
ATTACHMENT 3
DRAFT
PSZ Minutes
September 13, 1989
Pago 7
Mr. Holt stand that the petitioner does meet some of the
requirements for a variance. To the north of the
property there is potential for the sidewalk to be
connocted with some other development. He does not see
that potential to the south. If the City sees a need at
a later time, it can be built then. He moved to grant
the variance from the point whore the property line
changes direction to angle toward the railroad right-of-
way for 379.7 feet because of topographical problems and
because granting the request would not violate the master
plan. Tho sidewalk will still be required along 602.63
feet of frontage along the service road.
Mr. Robbins stated that the Denton Development Plan
emphasizes the need for sidewalks but does not call for
them specifically on Airport Road or the 1-36 Service
Road.
Mr. Clark disagreed with the interpretation.
Motion seconded by Ms. Kikor and carried (4-2). Ms.
Brock and Mr. Engelbrecht voted no.
8. Consider recommending approval of the preliminary replat
of the Endres Addition, Lot 2, Block 1 into Lot 1R, Block
1.
I
STAFF REPORT: Mr. Yost presented the staff report to the
Commission (attached).
Mr. Robbins said that Mr. Morris has indicated that the
fire flow issue should be processed as a variance rather
than as an exception. Fire flow standards cannot be met
_ for this subdivision. The Subdivision Rugulations
specify whon an exception is applicable to certain
situationb. For a variance, the situations are not
spelled out and the guidelines are more broad. The way
the ordinance is written, there are no situational
standards that would apply for the exception. So it
looks like a variance but they are calling it an
exception. The second ilosue is that the ordinance does
not addreso the City Colincil. The variance section
requires the City Council to make final determination.
Mr. Morris has suggested that the fire flow issue be
handled from a legal perspective as a variance because
there are no standards laid out in the ordinance for an
exception.
I
3-l
I
I I
t
f
# ATTACHMENT 2
i r i rtr r rri r r Darn. rK. <jl ~
~~2~t'~['JZI ! 111 1 218.30 ~Nj+c i r,
~ I I I a 1~
x
. 41 I I o~ ls
,t,t ,Ili :II IN }I} E
1lll +III i1 d f111 I I
oaf
~ I1111,r I ~ j~
o 1 Ti-
11, 1ji_ Ii111f fill. r
R [ f hl 1515 AZ POR t ROAD - y
f ~
~F
z
C-
C.1~p
rt cm p „a
K
M m yy~
40
i
i
I
I
Eli
s
i~
I
F
ATTACHMENT 3
DRAFT
P5Z Minutes
September 13, 1989
Pago 7
Mr. Holt stated that the petitioner does meet some of the
requirements for a variance. To the north of the
,roporty there is potential for the sidewalk to be
connected with some other development, He does not see
that potential to the south. If the City sees a need at
a later time, it can bs built then. He moved to grant
the variance from the point where the property line
changes direction to angle toward the railroad right-of-
way for 379.7 feet because of topographical problems and
because granting the request would not; violate the master
plan. The sidewalk will still be required along 602,53
feet of frontage along the service road.
Mr. Robbins stated that the Denton Development Plan
emphasizes the need for sidewalks but does not call for
them specifically on Airport Road or the I-35 Service
Road.
Mr. Clark disagreed with the interpretation.
Motion seconded by Ms. Kiker and carried (4-2). Ms.
j Brock and Mr. Engelbrecht voted no,
S. Consider recommending approval of the preliminary replat
of the Endres Addition, Lot 2, Block i into Lot 1R, Block
1.
STAFF REPORT: Mr. Yost presented the staff report to the
- ' Commission (attached),
Mr, Robbins said that Mr. Morris has indicated that the
fire flow issue should be processed as a variance rather
than as an bxception. Fire flow standards cannot be met
for this subdivision. The Subdivision Regulations
} specify when an exception is applicable to certain
situations. For a variance, the situations are not
spelled out and the guidelines are more broad. The way
the ordinance is written, there are no situational
standards that would apply for the exception. So it
looks like a variance but they are calling it an
exception. The second issue is that the ordinance does
not address the City Council, The variance section
requires the City Council to make final determination.
Mr. Morris has suggested that the fire flow issue be
handled from a legal perspective as a variance because
there are no standards laid out in the ordinance for an
exception.
3-1
1
F
PsZ Minutes DRAFT
Setember 13, 1989
Page 8
Mr. Morris stated that the real problem is that the
ordinance does not give any standards. The only way to
handle this is to apply some other type of criteria
through the variance procedure. The Commission does not
have the authority to make an exception without standards
on which to base the exception. It is essential in these i
cases that the Commission discuss the criteria for the i
decision and have it in the record.
Mr. Robbins stated the way to solve the problem from an
ordinance standpoint is to delete some of the wording
from the ordinance. The second way is to explain some
of the special and unique .,ituations that might qualify
for the variance criteria.
Ms. Baker stated that the fire flow issue was presented
to the Public Utilities Board (PUB) on August 23, 1989
as a variance. She presented the staff report that had
been prepared for the PUB to the Commission. She said
that staff recommends approval of the variance because
there is a limited area to be served if they extend the
8" water line across their frontage most of the area
would be served. Staff proposes to do the final tie in
E to Airport Road in fiscal year 1990 that would increase
j the fire flow. As future development to the west occurs,
water lines would probably be extended across I-35 and
fire flow would be increased again. This is a limited
area and they have agreed to sprinkle their buildings.
Although our ordinance does not address this, the State
Board of Insurance and underwriters do recognize that not
as much fire flow is needed to put out a fire. The City
of Denton Fire Department also agrees with this. Also
they are not really creating a specific need for more
water. At the time of the original plat, they were not
required to meet fire flow standards. Because they are
not increasing their actual water need, staff fools that
this is another spacial and unique circumstance.
Ms. Brock verified that they are surrounded by adequate
fire flow but do not have it specifically at their site.
Ms. Baker said yes. Ms. Baker said that once the tie in
is complete, the fire flow would increase. It will
probably be designed in 1990 constructed in fiscal year
1991. A letter from Mr. Hauptmann addressing the
variance criteria is included in the back-up,
i
1
i
DP AFT
Paz Minutes
September 13, 19139
Page 9
Mr. Robbins read Article 4.01.13 of the Subdivision
Regulations which says that the requirements are adopted
with the intent of requiring each development to provide
for those public facilities and improvements to serve the
development to the extent that the required facilities
and improvements bear reasonable connection to the need
created by the development and to the degree that the
development ic, benefited thereby. If the Commission
finds that what the developer proposes to do is able to
serve the need that he creates, a variance may not be
needed.
STAFF RECOMM4NDATION: Mr. Yost stated that originally
the staff recommended denial, but because a partial
variance was granted, the Development Review Committee
recommends approval.
PETITIONER: Mr. Hauptmann stated that he is available
to answer questions.
Ms. Brock stated that Article 4.01.8 of the Subdivision
Regulations allows the Commission to find that this
addition does not create the need for additional fire
R flow and the buildings will be sprinkled. The City has
plans to finish the tie in of the water lines in the near 1
future. She moved to recommend approval of the replat
of the Endres Addition. Seconded by Mr. Engelbrecht and
unanimously carried (6-0).
3 -3
Ilk
i
DATE: 9/13/89
PLANNING AND ZONING COMMISSION REPORT FORMAT
TO: Planning and Zoning Commission
FROM: Owen Yoat, Urban Planner
SUBJECT: PRELIMINARY REPLAI OF THE ENDRES ADDITION, LOT 2, BLOCK 1, INTO
LOT 1R, BLOCK 1.
RECOMMENDATION:
The Development Review Committee recommends conditional approval of
the replat, if tae Commission recommends approval of the sidewalk
variance and fire flow exception. If the Commission recommends
denial of the variance, the DRC recommends denial of the replat.
The Public Utilities Board recommends approval of the fire flow
exception.
SUMMARY:
This is a 2.9 acre tract located immediately west of the Interstate
35W service road, and notch of Airport Road (FM 1515). The tract is
zoned light industrial (L:). All adjacent land, as well as laad
across streets, is also cooed for light industrial use. Development
as an expansion of a wareho,ise, with related officts, is proposed.
The site is shown in the Eugtae Puchalski Survey, Abstract No. 9909
in the City and County of Denton, Texas.
BACKGROUND.
A variance of typical sidewalk requirements is being sought.
i
In addition, an exception to the fire flow requirement was reviewed
by the Public Utilities Board (PUB) on August 23, 1989. The PUB
recommended approval of the exception. The applicant will extend an
8" water main approximately 525 feet to the southern tip of their
property in a 20' utility easement prior to Issuance of a building
permit in accordance with the Subdivision and Development
Regulations. The staff intends to obtain permission from the Public
/ Utilities Board to connect the proposed 8" extension to the existing
lb" water maia located south of Airport Road, a distance of 505 feet.
City services and facilities, including water, gas, sanitary sewer,
telephone, electrical, and solid waste, are available. The site is
in the Special Activity Furpose District, established by the Denton
Development Plan.
The plat does not conform to the minimum requireceate of the Denton
Subdivision and Lead Development Regulations. Requests for a fire
flow exception and a sidewalk variaoce from those minimum
j requirec•~nts are being sought.
19291 3-4
G
I`
I ~
I
11114
111.1
k
i
i
I
I
i
x 14
4]
1
YwIM V i
lpymy "Vo
~ iD IG!
I
CITY of DENTON, TEXAS MUNICIPAL BUILDING/ DEN TON, TEXAS 76201 / TELEPHONE (817) 586.8907
C!fice of the City Manager
M E M O R A N D U M
I
TO: Mayor and Members of the City Council
FROM: Betty Williams, Deputy City Secretary
DATE: September 29, 1989
SUBJECT: Back-up for Agenda Item
{
Mr. Joe Dodd came in and requested to be placed on the agenda
to discuss the Cable Subscriber Bill of Rights. There is no
written back-up material for this agenda item. A copy of the
Guidelines for Appearance before the City council has been
mailed to Mr. Dodd.
I
I 4 i' 1
Betty Wi 1 ams
9697M/bw
I~
{ '1
I
i
II
II
e
Y
Iffil via
I
1
I
i
I
I
! l
Y
1{I/)
1 N a._a
8.
DATE: 10/03/89
C1T° COUNCIL REPORT FORMAT
TO: Mayor and Members of the City COlln^il
FROM. Lloyd V. Harrell, City Manager
SUBJECT: PRELIMINARY PLAT OF WATTAM ADDITION, LOTS 7 6 8, BLOCK 2 INTO
LO`: 7R, BLO.:X 1
RECOMMENDATION:
The PlanninS and Zoning Commission recomaiended approval at its
August 23, 1989 meeting. (4-0)
SUMMARY
This is a 1.054 acre tract located on the northwest cor,ter of Fannin
and welch Streets, near the campus of the University of North
Texas. It is shown in the Eugene Puchalski Survey, Abstract 996 in
the City and County of Denton, Texas.
Currently t!ie land is zoned single family (SF-71 and is mostly
vacant, except for two single family rental structures which are
proposed for demolition. Planned development zoning is being
requested. If approved, development is anticipated of a sorority
house for forty students and one housemother,
fE BACKGROUND:
Tne property is zoned single family and planned development zoning
i is sought from the Denton City Council, Land to the north, east and
south is zoned multi-family. To the west is a rental structure on
~Jf single family (SP-7) land,
The site is in a low intensity area and the intensity trips are over
allocated. Existing services and utilitie4 are adequate for the
proposed use including the resurfacing of Welch Street which is in
its final stages.
The preliminary plat conforms to the minimum requirements of the
Denton Subdivision and Land Development Regulations.
PROGRAN31 DEPARTMENTS OR GROUPS AFFECTED:
I I
No City of Denton facilities will be abnormally impacted. The
housing situation at the University of North Texas will be slightly
alleviated,
City Council Format
Wattam Addition
Page 2
FISCAL IMPACT:
Development on a site that is currently mostly vacant will expand
the tax base.
ted:
Resp Eae
Prepared b : Ci Mana
ger
Owen Yost, ASL G
Urban Planner
1
Approved- M f F
nk H. Robbins, AICY
Executive Director
planning and Development
27249
i
f
f
t
i
k
I
j
z
l €
f s
}
i 9
ATTACHMENT 1
P 89-022
NORTH
❑ )WEIE Y
ou D ■
ao~
~~d® ❑ C~
a F NN1
~ a
- _ rut +r® I~
E:l
v
E~l
❑ tI~
s~ III
I
6ALI PoNr- DA TI
I
I
1
P
M
ATTACHMENT 2
PRELIMINARY REPLAT
P 89-022
MORTM
I tv••.f 4'••4.4
t J[O{
~ 1 .eq 1(IL AT Oi l9T! r!? p I
ILO.^r / C ~
I4TT.741 4CC. 'r0Y L
r/'N I/•111'• I
7R o'
054 4C#fj
1 . ~f[• Q 1~ 4o T h Imo?
/ 1 NwiN ? I 'Kl I
LCT / r~r•a.l0 r'rr I
tit-
J r ~ ~ y
_ a{ ;Crs'rcoc avr I 41 ;
f f"' I esT y[" [ ` ~J4r'
1
4i
` 1,0titG
I ~,•n I I
tnl 9N I
94 coup Catpaution 1 i
=9J1 CafNl ~ I
? ntaa. ragl 16701 I f
+ +Ulv/yol 40 r(1,
L In IN ra /Jf qy°t/r 7at4rporat,d r ro at aL+~ f Iv+J•v4f
3 :77 Wdet •Itlafy i1
salt, Ily
j v ~tlAVf/
I. aton, 7ual 7
1 lot 4"t w1u It af4o40
I+11117.101/ 'O •4tiy.y
b wTKu I~faY/w
L n:•ND
!{R Iat Ilcoo
4.r sand 1011")
°d
14nitaly 44610:•
Nita, "I,
O •Ittr Nto,
• vatic N,Irf
=ii /+wr polo
Nr INf NIC/ po11
e u1 lydunt
T
I
l N01V~ DAf~ B'2Z
i
i
I j
i
ATTACHMENT 3
August 23, 1989 D R T LIII4~
Page 7 Mr. Cunningham said that the adjacent property is for
sale at a price that does not suggest it will be used
for single family development.
i
r'~ Chairwoman Brock closed the
I public hearing. ~
DECISION, Mr. Kamman stated that if the western boundary
of the parking lot is moved three feet to the east and I
additional buffering provided with trees and shrubs
approved by the staff, it would be good for the
neighborhood. He moved approval of the request with the
aforementioned conditions.
i
Ms. Brock seconded the motion. She said that one problem
with anything other than single family is that other
people in an area also begin to want more intense Zoning.
She would like to preserve the neighborhood against
another concrete city. Housing variety is desirable.
Some of the single family houses in the neighborhood have
been renovated recently and are attractive. Many houses
in the neighborhood are rental and lots of students want
tv rent houses. She is concerned about traffic to UNT.
It is good for sororities to have their o+an houses within
i~ easy walking distance. The intensity in the area will
be increased but not as much as other uses would cause
and the neighborhood will benefit from the request.
Motion carried unanimously (4-0).
Mr. Allmon and Ms. Baker left the meeting.
r B. Consider recommending approval of the preliminary replat
of the Wattam Addition, Lots 7 and 8, Block 2 into Lot
7R, Block 2.
§JEf REPORT: Mr. Yost presented the staff report to the
Commission.
Mr. Kamman moved to approve the preliminary roplat of the
Wattam Addition. Lots 7 and 8, Block 2 into Lot No Block
2. Seconded by Mr. Engelbrocht and unanimously carried
(4.0).
j
3-1
i
1
f
I
1
DATE: 8/23/64
PLANNING AND ZONING COMMISSION REPORT FORMAT
T0: Planning and Zoning Commission
FROH: Wen Yost, Urban Plamaer
SUBJECT: PRELIMINARY AND FINAL REPLAT OF WATTAM ADDITION, LOTS 7 6 BLOCK 2
INTO LOI 7R, BLOCK 1.
RECOMMENDATION:
The Development Review Committee recommends approval.
SUMMARY:
This is a 1.U54 acre tract located on the aorthvaat corner of Fannin
and Welch Streets, near the campus of the University of North
Texas. It is shown in the Eugene Puchalski Survay, Abstract 996 in
the City and County of Denton, Texas.
Currently the land is zoned sinala-family (51-7) and is mostly
vacant, except for two single-family rental structures vhich are
proposed for demolition. Planned development rontag is being
requested. If approved, development is anticipated of a sorority
house for forty students and one housemother.
{ i BACKGROUND:
The property is toned single-family and land to the north, east and
south is zoned multi-famtly. To the west is a rental structure on
single-family (SF-7) land.
The site is in a low intensity area and exlotina services and
utilties are adequate for the proposed use.
The plat conforms to the minimum requirements of the Denton
Subdivision and Land Development Regulations.
1903x/5 3-2
i i
i i
I
i
I
I
r~
i
141
men
I
i
2651L-3/3689 CP. A,
NO.
AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND PROVIDING FOR THE
AWARD OF CONTRACTS FOR PUBLIC WORKS OR IMPROVEMENTS; PROVIDING
FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the city has solicited, received and tabulated
~~--1 competitive bids for the construction of public works or
improvements in accordance with the procedures of state law and
City ordinances; and
WHEREAS, the Citdyd Manager the a designated employee has
lowest receiand ved bids for the construction of the public works
and iplans and specifications therefore; iNOW,aTHEREFORE, proposals
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
l
SECTION I. That the following competitive bide for the
I construct ono jublic works or improvelanssands adecificationston
I "Bid Invitations , Bid Proposals or p Pe
file in the Office of the City's Purchasing Agent filed according
to the d number assigned hereto, are being the lowest responsible bids~~ereby accepted and
approved as BID NLfSBER CONTRACTOR AMOUNT I
~
44 X797 SO_
I r
1007•-_'_ - TaL 1-C.- SF:RYIC"'~ INC
MF1 - _Zg aSb.Q~
10I~~ DRR CQNS2RUCT1ADt-C0X2AXY
-
SECTION II. That the acceptance and approval of the above
compet t ve s shall not constitute a contract between the City
and the person submitting the bid for construction of such public
works or improvements herein accepted and approve
person shall comply with all requirements specified in the Notice
I
I
I
i
i
to Bidders including the timely execution of a written contract
and furnishing of performance and payment bonds, after notifi-
cation 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 public works or improvements in accordance
with the bids accepted and approved herein, provided that such
contracts are made in accordance with the Notice to Bidders and
Bid Proposals, and documents relating thereto specifying the
terms, conditions, plans and specifications, standards, quantities
and specified sums contained therein.
SECTION IV. That upon acceptance and approval of the above
co Npe.t t vi a-bias and the execution of contracts for the public
works and improvements as authorized herein, the City Council
hereby authorizes the expenditure of funds in the manner and in
the amount as specified in such approved bids and authorized
contracts executed pursuant thereto.
SECTION V. That this ordinance shall become effective
tmmeMaltely upon its passage and approval.
PASSED AND APPROVED this the day of 1989.
If
1
RA S EP S, MAYOR
i1
ATTEST:
1 JENNIFER WALTER S9 CITY CSFCRPfW
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY:
i
II
PAGE 2
7
r
t
DATE; OCTOBER 3, 1989
C1'1Y COUNCIL REPORT
T0: Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: BIDO 1007 - MALOIX STREET DRAINAGE
RECOMMENDATION: We recommend this bid be awarded to the low
bidder, Tri Con Services, Inc., of Garland, Texas, in the amount of
$446,797.50.
SUMMARY: This is the second time the project has been bid. We
advertised and sent bid proposals to fifteen prospective bidders
and received seven bids ranging from a low of $446,797.54, to a
high of $525,990.00 with four bids under $500,000.00, V4 -4 49991,
Malone Street Drainage, opened in June. We received four bids with
the low bid of $466,178.00.
i ,
BACKGROUND: Tabulation Sheet
i
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED: Street drainage projects
and the Citizens of Denton,
j FISCAL IMPACT: Account N436-020-G088-8608-9108 and no additional
impact on the General Fund.
Respect ily submitted;
~ _ v Rol
:loy Harrell
City Manager
Prepared by:
Name: Tom D. Shaw, C.P.M.
Titles Assistant Purchasing Agent
Approved:
Name: Tom b. Shaw, C.P.M.
Titlet Assistant Purchasing Agent
017.DOC
i
f
r
n
I fo -
o N C
n °o
z° i
cc
CO a
i,
o ~q
o
{ 0
tO n
r Austin Eng.
c O
o
w .1.L.
Bertram
~ A
01 ~
O
r Tri Con
l N Services
I ~ O+ O
% M y
Atkins
Lq Brothers
0
LA
c r Dickerson
~ Const. Co.
- - - Ln I
~ d
rv ,
4J ABC Utiiitie
A
M
O
4 00
v r Sunmount
in Corp.
0
i
X
C
x R
t
c
S
CITY ofDENTON, TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE (817) 566.8200
MEMORANDUM
DATE: September 15, 1989
i
r
TO: Rich Svehla, Deputy City Manager
r
FROM: Jerry Clark, City Engineer
I I
SUBJECT: 14ALONS STREET DRAINAGE - BID 11007
I
We received a low bid from Tri-Con Services Incorporated for $4460797,50, Our
original estimate for the entire project in 1964 or 1985 was about $500,000.
The Drainage Committee of the Blue Ribbon Citizen Group added this project in
partial to fill in total funding for a specific year to about $800,000 as per
the attached documentation. The $24,0,000 was estimated to address the major
flooding in the Malone and Cordell Street area b
lines. Y providing the major trunk
~I
We did our normal analysis of the entire drainage basin to determine true
need. Several conversations were held with residents in the area, many of
whom regularly get heavy water damage. It was quickly determined that we do
not have adequate funds to construct the complete inlet and pipe system to
meet ten (10) year design storm requirements.
Several inlets and pipes were moved to intersections such as at Emery,
Westchester, Carlton, and a few others. However, we determined that Cordell
experienced severe effects of upstream concentrations. We have dual 42• to
48' RCP most of the distance from Malone to Carlton to address these
deleterious effects. Our design could have minor cuts in the $10,000 range
but those deletions have exponential effects as they are is.creased.
Therefore, we are strongly recommending the system as designees
As discussed earlier, the budget allocation was for $2500000 with $2250731
available after design charges. We feel that $250,000 in additional funds are I
necessary to provide for inspection, testing, and construction. These funds J
are available from the interest generated from the 1985 Street Bond Issue. If
the $225,000 figure is not modified, the trunk system behind Newton Rayzor and
' I
3 t
V
Rick Svehla
September 15, 1969
Page 2
up Malone would be the only systems built, Very little of the actual flood
water currently entering homes would be collected prior to that damage.
We did size the system to accept further collector type systems if authorized
by the CIP for the upper regions of the bas!n. Please consider approval of
the bid of Tri-Con Services as submitted with budget modifications to properly
address major flooding issues in the Malone and Cordell neighborhood,
I
w y Clark l
-1
NOTE: On September 20, the 91 Committee recommended the additional funds
be allocated for Malone Street. Hill Claiborne who was chairman of
the Drainage Committee remembereJ that Malone Street was a fill-in
project for that years allocation. He agreed that this project was
very necessary and should be constructed to accomplish collection of
all major storm waters. (September 27, 1989)
wp
i
,
33569
i
I!
l
I
i
I
I
I
I
A
i
1
DATE: OCTOBER 3, 1989
CITY COUNCIL REPORT
TOs Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: BIN 1011 - DFNIA PARR IMPROVEMENTS
RECOMMENDATION: We recommend this bid be awarded to the lowest
bidder, DBR Construction Company, in the total amount of
$79,556.00, with construction completion in 120-days,
SUMMARY: This bid in for the fencing, dirt work, and concrete '
paving associated with the Denia Park Athletic Field Renovation.
Five bidders responded to the request prepared by Teague, Nall and
Ferkins Consulting Engineers/J.T, Dunkin and Associates. The bid
of DSR Construction Company is $9,785.00 lower than the combination
of the other bidders lowest price;;.
BACKGROUND: Tabulation Shoot, Memo from Robert Tickner,
Superintendent of Parks
PROGRAMS. DEPARTMEUTS OR GROUPS AFFECTED: Recreation Facilities
FISCAL 1MVACTs Funds for this purchase are available from
Athletic Field Funds 4936-031-LOSS-8703. i
f Respect Illy submittedt
Lloy arrell
City Manager i
IA Prepared by:
NE me: Tom n. Shaw, C.P.M.
Titles Assistant Purchasing Agent
A roved:
hlr~
fume: Tom D. Shaw, C.P.M.
Titles Assistant Purchasing Agent
` Ol7.DOC
i
I
}
l y
r
1 <I ~
cf r
_f
1 _ r
.d..rf U Om G N f=' ~ 1 i ~ p
Iff ;ti~1 ~ Z 4 O_ Sr r I nll l~ .ZI
C1 [l M b T'. 1•[ nl ~ l S I .M
M
v v t. m ~ [ fin! I ~
i Y .~I ~ rT '^.•f I ~U 1 Qf C
m m ~ M m 1 rot m
M m M i eyJ z.
N N o I d c~[r
>R. I
fl I
S I I ~
m 1
x i I ?
I
I 1
I i i c'1 v
cul .N- v ~ an ♦R i ~ i ~ n ~
N ~ OI ~ ~ 9 d 1 1
r
i tI
a _
14
1 a tm
i +f ~lJ1 m [a P I A ! I
{
If ~ I i
I ~ nnT
I ~ 3 I y
I G
u~ ~ m I x I ~r--I
1j I I ~ I
1 w tD n
xz
Imif ~ ~ N ` i ~ K I
O N
r~
I 1•
!J I I
; 14
g A ~ I I
r
i
1P~ -
Al l'. Y. F. f'
Wceaa t i 6n
CITY of DENTON, TEXAS CIvIo Contor/ 321 F. $fcXlnney/ Oontoh,'Tk 76201
M E M O R A N D U M
TO: Steve Brinkman, Director of Parks and Recreation
PROM: Bob Tickner, Superintendent of Parks
DATE: September 25, 1989
SUBJECT: Recommendation on Bid 81011, Denia Park
i
we have reviewed the bids received on Bid 11011, Dania Park Athletic Field
Renovation. Bids were received from Elva bidders on three sections for the
project.
t
It is our recommendation in determining the lowest and best bid for the City !
that all three sections be awarded to DBR Construction, Denton, Texas, at
$790566. This is a savings of $1,158 from the next lowest combination of
bidders. DBR Construction was the low lanp sum bidder on each section except
'earth work' in which Larry Manning was low bidder at $27,5000 $12.00 less
than DBR Construction.
Additional advantages to awarding all three parts to DBR is the project will
be bonded by a performance bond. This was not being required of bidders
receiving contracts under $50,000. Also, Savings in contract administration
and coordination will be realized using one contractor.
The bids received are as follows:
Earth Work
r~ Larry Manning $27,S00
DBR Construction $27,512
J. E. Baynes Construction $28,572
Pence, Backstops
DBR Construction $21,885.00 alternate 1 + $5,196 $30,381
Hurricane Fence $250906.50 alternate 1 + $5,108 $31,311
i
IG 6 e/Iat'l~lflll Oolel t.,lleelal e,4iaatcl ~'t't:tte2 y`d
h X Donlon Parks and Recreation / Donlon, Togas / fS l 71500.8270 lam.
III
i
rMh61
141" M. M. •.f,
Concrete Sidewalks
DBR Construction !21,667.00
J. 6. Haynes Construction $250500.00
Port Dalton Company $29,897.00
Larry Manning $31,450.00
This project- will re-construct and re-cor.fi9ure the two existing softball
fields and add one new soccer field to the Site. These funds are a part of
the 1996 bond issue where :1.3 million was funded for athletic field
development at Denia, Evers, and North Lakes Parka.
Please advise if you have any questions or need additional information.
v Robert R. Tickner` U
f
PARKS065
i
i
i
I
3
{ I
Ell,
47
C v
IrT
'o f1
_ r
r g ~4-c r)
OQZ f I
}
W4 tl
6 I
=.~6 ~E 1l-
f
1
i
I
JULUZO
I I
1
IUJZ=
1
l
it
October 3, 1989~p, a.
CITY COUNCIL AGENDA ITEM
T0: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Managers
SUBJ: CONSIDER APPROVAi. OF PROPOSED WASTEWATER RATES.
RECOMMENDATION:
The Public Utilities Board, at their meeting of September 27, 1989,
recommended that the Wastewater Rates for Eating Places and Equipment
Services be increased in proportionate increments over a three year
period, such incremental increase for the first year to be 25% and
second and third years to be left open in order to assure that cost
of service rates are achieved for these rate classes at the end of
such three year perioc. All other proposed wastewater rate
adjustments remain as originally proposed.
k SUMMARY:
At the City Council meeting of September 19, 1989, Council approved
the electric and water rates as proposed, but deferred action on the
wastewater rates, due in part to the concern over the 40% increase in
rates for the restaurant owners and equipment services owners.
A meeting with the Restaurant Association and Staff was held Monday,
j September 25, 1989, and a public hearing conducted by the Public
Utilities Board was held September 27, 1989, Based on the testimony
provided by the representatives of the Restaurant Association and the
input and recommendation of staff, the Board recognized that a ma,ior
factor in rate design is the amount of increase from ar existing t: a
new rate. After hearing testimony, the Board, at the suggestion of
J the Staff, recommended that the full cost of service rate for Eating
Places and Equipment Services be phased in over a three (3) year
period vs the previously proposed two (2) year period. The Board,
therefore, recommends to the Council that a 25% rate increase be
implemented for the Eating Places and Equipment Services rate
classes. The 25% rate increase results in a volume charge of
$1.95/1,000 gallons of effluent. This compares to the present
$1.60/1,000 gallon commercial rate, to $1.78/1,000 gallon proposed
for regular commercial customers, and $2,20/1,000 gallons for the
originally proposed 40% increase, All other wastewater rates remain
unchanged, The Utilities Staff is making plans to trim the budget In
order to accommodate the shortfall in revenues resulting from this
rate change.
A copy of the backup information provided in the agenda item of
August 29th and September 19th along with the PUB Minutes of
September 27, 1989, Public Hearing are attached,
A
I i
I
t
e
City Council Meeting
Page 2
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
Denton Municipal Utlliti(S, Public Utilities Board, Customer Service
Department, Data Processing, Legal Department, City Council, and the
Citizens of the Community,
FISCAL IMPACT:
1 The total revenue for the wastewater department as a result of the
8.5% overall rate increase is $6,209,145,
than present rates which is (462,451 greater
. Reducing the Eating Places and Equipment Service
rates from a 40% to a 25% increase, resulted in a $25,483 reduction
of proposed revenues.
~I
Respec ly Submitted,
oy arre ,
Manager
Prepared/Approved by,
j e son, xecut veer
Department of Utilities
I1
Exhibit I Nastewater Rate Ordinance
11 City Council Agenda Item of August 29, 1989
III PUB Minutes of September 27, 1989 - Public Hearing
1
it
I
6515U:5-6
II ~
y !w.IJ . Mw,P 4~
R[rc! ~
'pq'. CcL i
i n.
2756L
I
NO.
AN ORDINANCE AMENDING THE SCHEDULE OF RATES FOR SEWER SEKVICE;
AND PROVIDING FOR AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I, That the Rate Schedules for sewer service as
proviae3-75r in Chapter 25 of the Code of Ordinances, are amended
to read as follows:
SEWER RATE SCHEDULES
PAGE
Si Residential Sewer Service 1
SIR Religious Worship Sewer Service 3
S2 Commercial/Industrial Sewer Services 5
S21 Commerical/Industrial Sewer Services 9
S3 Wholesale Sewer Treatment Service for a
Goverunental Agency, Division or Subdivision 11
S4 Intragovernmental Sewer Service 13
S5 Sale of Treated Sewer Effluent to Municipal
Utility Customers 15
S6 Metered Sewer 16
S7 Residential Sewer Service to Users Outside
1 of Denton Corporate Limits 18
S8 Residential Sewec Service to Users without City
of Denton Water Service 20
S9 Commercial/Industrial Sewer Service Outside
the City of renton Corporate Limits 22
SIO Metered Sewer Outside City Limits 24
i
I
I
I
i
I
i
s
SCHEDULE S1
RESIDENTIAL SEWER SERVICE
APPLICATION
Applicablo for single family residential service, and
individually metered apartments or mobile homes or multi-family
facilities with less than 4 units.
Not applicable for sub-billing or other utility billing by
service user in any -event.
NET MONTHLY RATE
(1) Facility Charge $3.00/30 days
(2) Volume Charge $1.50/1,000 gallon effluent
BUling shall be based on ninety-eight (98X) percent of water
consumption but shall not exceed a maximum of twenty-five thousand
(25,000, gallons. Monthly billings for the period March through
November shall be based on the average monthly rate of water
consumption during the immediately prior months of December through
February. Billings for the months of December through February
shall be based on actual consumption. New residential customers who
do not have a full prior non-irrigational history (December through
February) will have a maximum bill based on ninety-eight (98%)
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is less until a non-irrigational water
consumption history is established.
MINIMUM BILLING
Facility Charge $3.00/30 days
PAYMENT 1
Bills are S.ie when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
E III
1
PAGE 1
!
r
R
r-+ti !M, ex
~12
h +Tc w
PRORATION OF UTILITY BILLS
(a) Billing for the Facilf,., charge shall be based on 12
billings annually,
Formula:
Actual dais in reading_p,riod x customer charge
30 Says -
1 (b) Billing for the sewer effluent shall be based on 30 days
I per month to determine the gallon effluent to be charged
to each rate black.
Formula:
Actual da a in readin period x GAL in rate block x RATE
ays per 1,000 gallons in
rate block
i ~
E
e
1
1
I
I i
i '
i
PAGE 2
i
i
I
I
l
+ SCHEDULE SlR
RELIGIOUS WORSHIP SEWER SERVICE
APPLICATION
Applicable to all facilities used primarily for religious
worship and/or education and not for residence or commercial or
/ industrial enterprise.
Not applicable for sub-billing or other utility billing by
service user in any event. {
NET MONTHLY RATE 1
(1) Facility Charge $3.00/30 days 1
(2) Volume Charge $1.50/1,000 gallon effluent
Billing shall bo based on ninety-eight (98%) percent of water
consumption but shall not exceed a maximum of twenty-five thousand
(25,000) gallons. Monthly billings for the period March through
November shall be based on the average monthly rate of water
consumption during the immediately prior months of December through
February. Billings for the months of December through February
shall be based on actual consumption. New residential customers who
do not have a full prior non-irrigational history (December through j
February) will have a maximum bill based on ninety-eight (984) 1
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is less until a non-irrigational water
consumption history is established. 1
MINIMUM BILLING
$3.00/30 days ~
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PAGE 3
it
_i
i
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually
Formula:
Actual days in reading period x customer charge
38 day
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to eacn rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
0gallons in
30 ays i per 1,0ok
rate block
i
r
f
4
PACE 4
i
t
SCHEDULE S2
COMMERCIAL AND INDUSTRIAL SEWER SERVICE
S2) REGULAR COMMERCIAL
APPLICATION
Applicable to all commercial and industrial sewer service
users and to all sewer service users not otherwise classified under
S2A, S2B, or S2C listed herein or Schedule S21.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
j (2) Volume Charge $1.78/1,000 gallon effluent
i
Billing based on eighty (80Z) percent of monthly water
consumption,
S2A) EATING PLACES
APPLICATION
Applicable to all restaurants and food service operations
::hich prepare and serve food directly to customers and are
categorized by Standard Industrial Code Numbers 5812 or 5813.
h NET MONTHLY RATE
(1) Facility Charge $7.25130 days
• I
(2) Volume Charge $1.95/1,000 gallon effluent
Billing based on eighty (80x) percent of monthly water
consumption,
S2B) EQUIPMENT SERVICES
APPLICATION
Applicable to establishments which perform washing cleaning
or r,ervicing of automobiles, trucks, busses or similar equipment and
are categorized by Standard Industrial Code Numbera 5541, 7549 or
1542.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
(2) Volume Charge $1.95/1,000 gallon effluent
PAGE 5
I
i
Billing based on eighty (80%) percent of monthly water
consumption.
EXEMPTIONS
(1) Customers under the S2A rate s,'all be charged the S2
rate if only pre-wrapped and pre-processed foods are
served from their premises and no food processing is
performed on the premises so that only minimal organic
material is discharged to the sanitary sewer. The
exemption for the S2A class shall be determined by the
City of Denton Enviro.imental Health Services' Food
Inspection Division.
(2) Customers under the S2A or S2B rates shall be charged
the S2 rate plus an industrial surcharge if the customer:
(a) Installs a wastewater sampling manhole on their
sanitary sewer discharge line;
(b) Agrees to pay for the City to sample and analyze,
quarterly, the wastewater discharge for the
following parameters; Biochemical Oxygen Demand
(BOD), Total Suspended Solids (TSS), and Fats, Oils
and Grease (FOG), based on the actual costs plus
administrative charges; and
(c) Agrees to pay, based on the industrial surcharge
formula, a surcharge on all wastewater discharged
that is in excess of 250 mg/l of BOD and TSS as
determined by the monitoring performed in Section
2(b).
The Industrial Surcharge shall be based on the following
formula:
Cu-Vu ([Bu-2501 B + [Su-2501 S1)
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu i#, the tested BOD level for user X or 250 mg/1,
whichever is greater.
8 BOD per 11000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
S ($0.000751) is the unit cost factor for treating
j one unit of SS per 1,000 gallons.
PAGE 6
f
k
I
r
I
S2C) PRETREATMENT
APPLICATION
Applicable to all commercial/industrial customers subject to
EPA Pretreatment criteria or such other commercial/industrial
customers that have the probability of discharging extra strength
wastewater or which may have substances in their wastewater which
are listed on EPA's categorical pollutant list.
NET MONTHLY CHARGE
(1) Facility Charge $7.25/30 days
(2) Volume Charge $1.90/1,000 gallon effluent
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based or. the following formula:
i
Cu-Vu ((Bu-2501 B + (Su-250) SD
Where: Cu is the surcharge for user X.
f
j Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/l,
whichever is greater.
B BOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$7.25/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
II
PAGE 7
t
~'4\ ~ pl YNa.• I.~
~4...F9yA iJPKi\~
i
PRORATION OF UTILITY BILLS
(a) Billings for the Facility charge shall be based on 12
billings annually.
Formula;
Actual days in reading period x customer charge
3 days
(b) Billing for the sewer effluent shall be based on 30 days
k per month to determine the gallon effluent to be charged
ff to each rate block.
Actual da s in reading period x GAL in rate block x RATE
days per 1,000 gallons in rate
block
I
1
i
{
I
i
i
I
I
i
PAGE 8
SCHEDULE S21
COMMERCIAL & INDUSTRIAL SEWER SERVICES
APPLICATION
Applicable to all major commercial and industrial sewer
service users and to all sewer service users not otherwise
classified under this ordinance whose waste is measured by a meter
dedicated to water which is returned into the wastewater collection
and treatment system,
C Not applicable for sub-billing or other utility billing by
service user in any event.
NET MONTHLY RATE
(1) Facility Charge $7.25/30 days
(2) Volume Charge $1.78/1,000 gallon effluent
Billing based on ninety-eight (98x) percent of monthly sewage
flow as measured by the wastewater discharge flow meter.
INDUSTRIAL SURCHARGE
i
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-2501 B + (Su-250) SJ)
Where: Cu is the surcharge for user X.
JI Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/l,
whichever is greater.
B bOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
i Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
I I~ I
` PAGE 9
I
I
MINIMUM BILLING
$7.25/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
~ All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
I
Actual days in reading period x customer charge
30 days
I
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
:IV days per 1,000 gallons in rate
h
block
i
I
PAGE 10
i
SCHEDULE S3
WHOLESALE SEWER TREATMENT SERVICE FOR A GOVERNMENTAL
AGENCY, DIVISION OR SUBDIVISION
F
APPLICATION
Applicable to any municipal corporation, or other governmental
agency or subdivision which operates a sewer collection system and J
contracts with the City of Denton for sewer treatment service. I
{
NET MONTHLY RATE
i
(1) Facility Charge $125.00/30 days
(2) Volume Charge $1.45/1,000 gallon of effluent
Billing shell be based on one-hundred (100X) percent of actual
h gallons measured by meter at one point.
MINIMUM BILLING
$125.00/30 days
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-vu ((Bu-2501 B + (Su-2507 S))
J Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg11,
whichever is greater.
B BOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
i
S ($0.000751) is the unit cost factor for
treating one unit of. SS per 1,000 gallons.
PAGE 11
I
i
k'wy n:sti~ y
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula,
Actual days in reading period x customer charge
" JU days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block,
I
Formula:
Actual da s in reading period x GAL in rate block x RATE
days per 1,000 gallons in rate
block
J
I
i
I
i
PAGE 12
i
f
I
yl TiN In~
Z
SCHEDULE S4
INTRA-GOVERNMENTAL SEWER SERVICE
APPLICATION
Applicable to all City of Denton Departments and agencies for
/ all sewer service.
NET MONTHLY RATE
(1) Facility Charge, $7.50/30 days
(2) Volume Charge $1.60/1,000 gallon effluent
Billing shall be based on eighty (80X) percent of water
consumption.
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
4 Cu*Vu ([Bu-2501 B + [Su-250] S))
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
B BOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
44INIMUM BILLING
$6.50/30 days
I ~
PAGE 13
1
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
t
PRORATION OF UTILITY BILLS
(a) Billing f-)r the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in readin period x customer charge
JV days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
r
i
Formula:
Actual days in readin period x CAL in rate block x RATE
days per 1,000 gallons in rate
block
i
i
I
I
I I
I!
PAGE 14
{
1
r.. r, In Wlw~
SCHEDULE S5
SALE OF TREATED SEWER EFFLUENT TO
_ MUNICIPAL UTILITY CUSTOMERS
APPLICATION
Applicable on sales of treated sewer effluent to any municipal
utility.
Not available for resale in any evert.
NET MONTHLY RATE
(1) Facility Charge $91.00/30 days
(2) Volume Charge $ .75/1,000 gallon effluent
MINIMUM BILLING
$97.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL, FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
j ;
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in days
eding period x customer charge
W
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula;
I
Actual days in reading period x GAL in rate block x RATE
0 days per 1,000 gallons in
rate block
i
i
I
PAGE 15
I
i
SCHEDULE S6
METERED SEWER
APPLICATION
Applicable to any major sewer service customer desiring to
ordinanele customer
and no sewage otnet month rate herwise classified under t this from a
meter location all
l
NET MONTHLY RATE
Facility Charge $130.00/30 days
Volume Charge $ 1.90/1,000 gallon effluent
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-250) B + (Su-2501 S1)
I Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
C B BOD per 1,000 gallons ($0.000743) is the unit
cost factor for treating one unit.
~t Su is the tested SS level for user X or 250 mg/1,
whichever '.i greater.
S ($0.000751) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$130.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
I PAGE 16
J~
1
I
1
SPECIAL. FACILITIES
L All services which require special facilities in order to meet
' customers service requirements shall be provided subject to the
special facilities rider.
M
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in readina niariod x customer charge
-
N days
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in readin period x GAL in rate block x RATE
dal? p
y block'000 gallons in rate
1
' I
i
~ i
PAGE 17
SCHEDULE S7
RESIDENTIAL SEWER SERVICE TO USERS
OUTSIDE CITY OF DENTON CORPORATE LIMITS
APPLICATION
Applicable for single family residential sewer customers
individually metered apartments or mobile homes or multi-family
facilities with less than 4 units outside of the corporate limits of
the City of Denton and also receiving water from the City of Denton,
NET MONTHLY RATE
(1) Facility Charge $4.50/30 days
(2) Volume Charge $2.25/1,000 gallon effluent
Billing shall be based on ninety-eight (98X) percent of water
consumption but shall not exceed a maximum of twenty-five thousand
(25,000) gallons. Monthly billings for the period March through
November shall be based on the average monthly rate of water
consumption during the immediately prior months of December through
February. Billings for the months of December through February
shall be based on actual consumption. New residential customers who
do not have a full prior non-irrigational history (December through
February) will have a maximum bill based on ninety-eight (98X)
percent of water consumption or ten thousand (10,000) gallons of
water consumption, whichever is less until a non-irrigational water
consumption history is established.
MINIMUM FILLING
~ I
$4.50/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
{ customer's service requirewents shall be provided subject to the
special facilities rider.
i
I
PAGE 18
1
T
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
Y
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE
JU days per 1,000 gallons in rate
block
i
f
k
f~
t
lam,
I~
I
I
PACE 19
I
i
SCHEDULE S8
RESIDENTIAL SEWER SERVICE TO USERS WITHOUT
CITY OF DENTON WATER SERVICE
APPLICATION
Applicable to all residential facilities not also receiving
metered water service from the City of Denton, including
sub-divisions, for apartments, mobile home parks, or other
residential service users. The monthly charge will be based on the
r' maximum number of residential units in the area served during the
month times the volume and facility charges.
NET MONTHLY RATE
In Corporate Outside Corporate
Limits Limits
j (1) Facility Charge $ 2,25/30 days $ 3.35/30 days
(2) Volume Charge $ 1.50/1,000 gals $ 2.25/1,000 gals
j Volume charge will be for five thousand (5,000) gallons per
month.
MINIMUM BILLING
$ 9.75 per 3U days $14.60 per 30 days
per resident unit per resident unit
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
i billings annually.
i Formula:
Actual days _in _reading period x customer charge
ONYX-
PAGE 20
it
I ~
i
I ~
.I
i
l4
~ Alf YA
K,.T:n.x CMr4 a'~
(b) Billing for the sewer effluent shall be based on 30 days
pper month to determine the gallon effluent to be charged
to each rate block.
Formula:
Actual days in reading period x GAL in rate block x RATE;
30 days per 1,000 gallons in rate
block
h
j
1
I
I
i
t
I
i
I t
I
i
PAGE 21
i
e
SCHEDULE S9
COMMERCIAL/INDUSTRIAL SEWER SERVICE
OUTSIDE CITY OF DENTON CORPORATE LIMITS
APPLICATION
Applicable to all commercial, industrial or any other facility
not otherwise covered under this ordinance outside the corporate
limits of the City of Denton and receiving sewer service from the
City of Denton.
NET MONTHLY RATE
1 ~
(1) Facility Charge $9.75/30 days
(2) Volume Charge $2.40/1,000 gallon effluent
j Billing based on eighty (,.x) percent of monthly water
consumption.
INDUSTRIAL SURCHARGE
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu■Vu ([Bu-2501 B + [Su-250) S])
Where: Cu is the surcharge for user X.
Vu is the billing volume for user X.
Bu is the tested BOD level for user X or 250 mg/1,
whichever is greater.
B BOD per 1,000 gallons ($0.000885) is the unit
cost factor for treating one unit.
Su is the tested SS level for user X or 250 mg/1,
whichever is greater.
S ($0.000894) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$9.75/30 days
i
j
{ PAGE 22
~ I
t
1
9r Ida ..,,i.
rr.
PAYMENT
L Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
SPECIAL FACILITIES
All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF UTILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula;
i 1
Actual days in reading period x customer charge
Y
h ~
i
I
i
~J
PAGE 23
i
it
F" I"
R
SCHEDULE S10
METERED SEWER OUTSIDE CITY LIMITS
APPLICATION
Application to any sewor service customer desiring to meter
all sewage effluent from a single customer location and not
otherwise classified under this ordinance.
NET MONTHLY RATE
Facility Charge $195.00/30 days
Volume Charge $ 2.40/1,000 gallon effluent
INDUSTRIAL SURCHARGE
i
In addition to the above charge for commercial and industrial,
there will be added to the net monthly rate an industrial surcharge
based on the following formula:
Cu-Vu ((Bu-2501 B + (Su-250) S))
Where: Cu is the surcharge for user X.
j Vu is the billing volume for user X.
Bu is the tested 80D level for user X or 250 mg/l,
whichever is greater.
B DOD per 1,000 gallons ($0.000885) is the unit
coat factor for treating one unit.
Su is the tested SS level for user X or 250 mg/l,
whichever is greater.
S ($0.000894) is the unit cost factor for
treating one unit of SS per 1,000 gallons.
MINIMUM BILLING
$195.00/30 days
PAYMENT
Bills are due when rendered, and become past due if not paid
within 15 calendar days from date of issuance.
i
a
PAGE 24
i
SPECIAL FACILITIES
I~ All services which require special facilities in order to meet
customer's service requirements shall be provided subject to the
special facilities rider.
PRORATION OF WILITY BILLS
(a) Billing for the Facility charge shall be based on 12
billings annually.
Formula:
Actual days in reading period x customer charge
30 ays
(b) Billing for the sewer effluent shall be based on 30 days
per month to determine the gallon effluent to be charged
to each rate block.
i
Formula:
Actual days in reading period x CAL in rate block x RATE
3 clays - per 1,000 gallons in rate
block
i
it
it
III ~
PACE 25
I
i
r
SECTION 11.
That if any section, subsection, paragraph, sentence, clause,
phrase or word in this ordinance, or application thereof to any
person or circumstances is held invalid by any court of competent
jurisdiction, such holding shall not affect the validity of the
remaining portions of this ordinance, and the City Council of the
City of Denton, Texas, hereby declares it would have enacted such
remaining portions despite any such invalidity.
SECTION III.
That the Schedule of Rates herein adopted stall be effective,
charged and applied to the first regular billing cycle accruing on
or after October 4, 1989.
PASSED AND APPROVED this _ day of , 1989.
I I
I
RAY STEPHENS, MAYOR
CITY OF DENTON, TEXAS
ATTEST:
I
E JENNIFER WALTM-07=ECKETARY
CITY OF DENTON, TEAS
APPROVED AS TO LEGAL FORM;
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
CITY OF DENTON, TEXAS
BY.,
i
i I
PAGE 2b
I
I i
it
August 29, 1989
CITY COUNCIL
WORK SESSION ON RATES
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Manager
SUBJ: DfSCUSS AND RECEIVE REPORTS ON ELECTRIC, WATER AND
WASTEWATER RATE STUDIES.
RECOMMENDATION:
Receive, discuss, and provide Staff input regarding subject
rate studies. The Public Utilities Board, at their meeting
of August 23, 1989, recommended to the City Council
approval of the proposed rates.
SUHKARY/BACKGROUND:
Rate Studies have been performed for the Electric, Water
and Wastewater Departments in order to establish cost based
rates that will collect revenues comaensurate with the cost
to serve the resppective customer classes. Dipa butia,
Financial Analyst in the Utility Administration Department,
performed the rate studies for the Water and Wastewater
Departments with Paul 8 Rachael Reese, of Texas Water
Company, reviewing the methodology and allocation of
costs. C.H. Guernsey 6 Company, Consultants, performed the
Electric Rate Study. Both C.H. Guernsey and Texas Water
Company representatives will be present at the Council
meeting to present the respective studies.
I The 1990 Electric, Water and Wastewater Rate Studies were
j presented to the Board on August 4 and August 23, 1989.
The proposed changes would result in a 1.61 or $887,491
reduction In electric rates, an 8.271 or $834,680 increase
in water rates, and an 8.51 or $480,468 increase in
wastewater rates.
i
The studies were based on the 1990 budget and proposed 1990
capital expansions of the respective utilities. Billing
determinants, i.e., number of customers, electrical or
water/wastewater demands and volumes, are based on 1990
forecasted values.
i
i
I
I
l
i fq}
N c y
A "Financial Analysis" of all input data was performed, and
r after minor adjustments, served as the input information
for the "Cost of Service" part of the study. Two revenue
requirement methodologies were used in the cost of service
part of the study. They were the equalized debt service
coverage ratio (DSCR) methodology, and the equalized rate
of return (ROR) on invested capital methodology.
Generally, the DSCR method is the "cash basis", which
assures that each customer class provides sufficient cash
to cover their share of the debt service. The ROR method
is the "utility", or accrual method, and assures that each
customer class provides a sufficient return on investment
to cover all expenses associated with their share of
investments in facilities serving their respective class.
I I
Upon developing the revenue requirements of each customer
class, a "target revenue" was developed for each customer
class. The target revenue may differ from the cost of
service report of either the DSCR or ROR methodology when {
major shifts are occurring in cost allocations and it is
deemed inappropriate to implement rate change that either
methodology may indicate is required.
In the rate design phase, the facility charge, demand
charge, volume charge, summer/winter rate differential,
volume block arrangements, etc., are developed.
In the rate study this year, the rates for the wholesale
water customers, Corinth and Lake Cities, and the wholesale
wastewater customer, Corinth, were developed on, the
"utility" basis. This was done in the manner prescribed by
the Texas Water Commission. In this s.ethod, all O&M costs
are allocated on the basis of their share of 06M costs,
which is the same as for Denton's "in City" retail
customers. However, instead of allocating debt service as
is done for retail customers, depreciation and return on
investment is allocated. To determine the asset amount
upon which depreciation and return on investment is
applied, it is necessary to first determine the wholesale
customer's utilization of Denton's facilities. The
wholesale customers utilization of Denton's facility
investment is based on their peak, relative to Denton's
peak multiplied times total facility cost for such
facilities that they use. For example, in the water rates,
they use 3.721 of Denton's raw water lines, water plant and
water transmission lines. Water transmission lines are
considered to be all lines over 12".
The depreciation amount is their 3,721 share of the total
depreciation. The return on investment amount is 9.51
times their 3.721 of asset base. The 9.S1 was derived from
the addition of Denton's overall 84 embedded interest rate
plus 1.51 which represents Denton's risk for making
investments on their behalf. All raw water furnished to
the wholesale customers was assumed to be purchased from
Dallas at 44.24t/1000 gallons.
I
I
I
s, Electric
The Electric Study was based on a 1.61 rate reduction,
which will produce total 1990 revenues of $54,756,780, with
total expenses of $53,868,000, which results in a 1.221
margin or $680,000. The rate design is based upon 27,776
customers, 757,552,000 KWH of sales, a demand of 186 MW,
and an asset base of $44,043,863.
Due to lowering costs of purchased power from TMPA, and
continued reasonably priced natural gas for the cities own
generators, an overall $887,491 rate reduction is
possible. This represents a 1.61 rate reduction.
The Cost of Service Study reflects that large industrial
customers under the present rates are carrying a greater
than their proportionate share of costs and should
therefore, receive a larger reduction in rates. Smaller
and medium sized commercial and City, County and School
district customers' are conversely not presently paying
their proportionate share, and should therefore, actually
receive a slight increase in their rates. See Exhibits 16
11.
Residential electric rates are to be reduced by an av~vage
21 for small usage RI classification customers and to be
reduced by an average 1.11 for all other residential
customers. Churches will receive an average 1.41
reduction, Large industrial customers UP) will receive an
average 141 reduction and medium sized industrial (GP)
customers will receive an average 3.91 reduction. All
other commercial customers (GS) will receive an average
3.61 increase and City, County and School district (GI)
customers will receive a 3.51 increase. (See Exhibit I).
The reductions and increases listed above are average
changes for the entire customer class and will vary
depending upon usage and load factor because of the fixed
facility charges and demand charge factors.
For GS classification commercial customers, there will be
no demand charge for the first 20 KW of demand. However,
the energyy charge will be increased to 6.569/XWH vs the
normal 3 %/XWH for the first 2500 KWH. All KWH's over
2500 would be 3.59/KWH. This change will greatly help
small customers who have been concerned about paying a
demand charge but use only very small amounts of energy.
A typical small residential customer using 500 XWH per
month would experience a monthly bill reduction from $38.25
to $37.1S. A typical summertime larger residential
customer using 2000 KV per month would experience a bill
reduction from $157,50 to $154.50. In the winter time for
7S0/KWH/mo, the bill would reduce from $S9.37 to $58.81.
ii
l
f~
"
Avery small commercial customer with a small office, 1000
square feet, and minimal air conditioning who is open 5
days a week, using 10 KW of demand and 1000 KWH of energy,
will experience a reduction from $122.75 to $99.60. Their
rate per KWH would be reduced from 12.3E/KWH to 101/KWH.
Larger usage customers using 50KW demand and 10,000 KWH/mo
(27.41 load factor) would receive a slight increase from
$838.75 to $841.50, with the rate increasing from 8.391/KWH
to 8.421/KWH.
In addition to the standard electric rates, C.H. Guernsey
also review-.d the following rates:
1. IED - Industrial Economic Development Rate
2. TS - Thermal Storage Rate
_ 3. TSS - Standby and Supplemental Service Rate
4. TOU - Time of Use Rates
Dslightly
Due to changing costs, these rates are modified
ecember
from a similar study C.H. Guernsey prepared
1988.
The Industrial Development Rate provides a 501 reduction in
dema=n t arges or- the first year a new or expanding
year,th201atin the
inTethe rsethan cond29Y ar,i)301in industry begins
fourth year, and 101 in the fifth and final year.
The Thermal Storage Rate proposed allows an up-front
custoser ncent ve payment of $150/KW for each KW the
customer can reduce their peak demand on Denton's system.
The customer would then be required to receive service on
j the 'Ime-of-Use rate for an least five years, with the
charge
addit'ion
those 2.50/KW added to the
Thereafter, imthef ustomerdemand
would be
I allowed to go on the regular Time-of-Use rate or an
applicable rate if they no longer were using their Thermal
1 Storage system.
The Standb and Supplemental Service Rate is for customers
who pan to install -their own generation for their base
load requirements, but still need a standby electrical
supply for emergencies and a supplemental supply for
non-emergency maintenance requirements. This proposed rate
would have a $121.20/KWH/yr demand charge, payable in 12
equal monthly payments, for any KW demand occurring during
Denton's peak hours of 1:00 and 8:00 p.m. during June,
iuly, Auggust and September. us,in t 12 eteequis also a
al monthly
$47.00/KW/yr demand charge, payable
payments, for any KW demand occurring during Denton's
non-peak hours. Energy costs would be .31/KWH for
non-emergency energy and S.31/KWH for emergency/on peak
energy, plus the normal energy costs adjustment. See
Exhibit I11.
i
i
j
t
r
The Time-of
-Use Rates reflect nearly the
Stan y an upp emen al Service rate or Same Generraatl e Saesrvitce
he
.
the rate would be F
cusuastgeomears nd t$4h,20/KW/mo. E0r off0'20/X0/mo, for on peak Kb
charge of .3t/KWH, plus the enerpeak KW, with an
residential customers 8Y cost adjustment energy rat wo be 6.lJ/XwH energy, 1.7!/KWH for ~off the
. For
peakeKWHuld u 2 normrm for peak
cost adjustment. plus the e normal energy
Water
The Water Study was based on a 8,27;
:rill produce total 1990 revenues of $10,ra9te31 increase, 789with
expenses of $10,916 548 , which
e , The rate ;design ischbased results to a total
416,2422b,000 163 margin customers
$30,854 060. gallons of water sales,upand 1 n~4as-set baseof
8.118 revenue shortfat r Department would experience an
to meet the Lake Ray Robertrimril due the
increase.
saobli ationtowithoure requirement
The Cost ~I
commercial andegovernmentdcustofineerstsarehcarrt in wholesale, ll
t
heir proportionate share of costs and should8thless erefore,1
receive an
customers needcaelesser rateeincrease. waSeC and
See ExhibitstlYnbiY1
Residential water rates are
average of 6.351. Commercialrsed to b by opcustomers a increased an
average 101 increase, while wholesale will receiva e an
above are avera custome w121
receive an average 191 increase. The increasesrslisted
will var 8e changes for the entire customer class and
vary depending upon usage.
wateypical residential customer using
per month durin the summer will experience a almonthly
bill increase from 133.50 to $34.50, or an increase of
coasumptioDu F 7,St a winter,
an average water
will increase from $20800ounder the present rate to'$20.63
with the proposed rate increase. $
i A typical commercial customer using 409000
per month would experience a change In their11monthl water
from
$88,00 to $95.60. This represents an increase of $7,5
Of a an 8.52; increase. Y bill
Waster
The Wastewater Stud
which will y is based on a 8,5; rate increase,
produce total 1990 revenues of $6,317,156 with
total expenses of $6,171,578, which results In a margin of
.
customers, 91 or $SS,5181 733 he rate design is based u p
I of $28,117,272, gallons of effluent, and an asset base
i
1
a
I
i
it
ti
1 a~
Without the rate increase, the wastewater department will
experience a revenue shortfall or $432,890, or 7.531
The Cost of Service Study indicates that residential
customers are presently paying their proportionate fair
share of the wastewater system costs and therefore, an
increase is not necessary for residential customers.
However, the study indicates that Eatir.,, Places, Equipment
Services, Pnd Pretreatment Customers iapose major demands
on the wastewater system for which present rates are not
recovering their proportionate share of the costs.
Therefore, a substantial rate increase is required for
these customers followed by lesser increases for wholesale,
regular comiaercial, and government customers. See Exhibits
VI 6 VII.
While the rate study actually indicated that Eating Places
need a rate increase of 781, an average 401 rate increase
is recommended as a first step in phasing in the actual
costs zo this customer class. Similarly, while the
Equipment Facilities class indicated that a 771 increase
would be necessary to recover actual costs, an average 401
is recommended.
Finally, pretreatment customers will receive a 301 rate
increase, wholesale customers will receive a 24.611
increase, and government customers will receivo a 3.51
increase. As mentioned above, residential customers. will
not experience a rate change. The increases listed above
are average changes for the entire customer class and will
vary depending upon usage.
A typical commercial customer using 40,000 gallons of water
per month will experience a change in their monthly bill
F from $57.70 'to $64.21. This represents an increase J
$6.51, or 11.281
i
E A typical Eating Place with an average monthly consumption
of 248,320 gallon effluent will experience an increase in
their bill from $403.81 to $553.S5, representing $149.74,
or $37.981,
Similarly, an Equipment Facility's monthly bill will
increase from $50.01 to $67.08 for an average consumption
of 27,193 gallon effluent. This represents an increase of
T~ $17.07, or 34.131.
The reason for the major increases in Eating Places and
Equipment Services is the greater strength of wastewater
that such customers discharge to the wastewater system and
the greater costs incurred to treat that wastewater.
Eating Places discharge large amounts of organic products
i
i
i
it
Il
j
I
a~.. a n:.....
C
twat raises the biological Oxygen Demand tBCD } at the
wastewater treata!ent plant and require much more equipment,
facilities, electrical power, and chemicals to treat. A
typical Eating Place may discharge wastewater with a BOD
value of 1000 parts per million, whereas, the average home
may have a BOD value of only 180 parts per million.
Similar effects are caused by Equipment Service customers,
i.e., car washes and garages, except the major component
may be the total suspended solids and in some customers,
the BOD as a result o: oil and grease being washed into the
sanitary sewer.
After presenting the rates to the Public Utilities Board on
August 4, the PUB asked the Staff to explore optional rates
for eating establishment and equipment service customers
who have taken extensive steps to keep high strength
wastewater from entering the City's system. The staff
developed an option that would place such customers on the
regular commercial wastewater rate a $1.78/1000 gallons vs
the $2.20/1000 gals., but then have a surcharge add on (or
reduction) the same as the pretreatment customers for any
wastewater that had strengths greater or less than 2S0 BOD
and 250 TSS. The customer would also have to enter into a
separate agreement to pay for a quarterly test of their
wastewater strength. Each such customer would also have to
build a sampling manhole. Another option that is proposed
to be handled administratively is to allow eating
establishment customers who do not process food or
discharge foodladen wastewater at their facility to remain
on the standard commercial rate.
FISCAL IMPACT:
I
The proposed changes in rates are a 1.61 reduction in
electric, an'9.271 increase in water, and an 8.S1 increase
in wastewater, which results in an increase of .81 in total
Utility revenues.
i
1 Amount From To
Decrease in Elect 1.601 $8879491 $5504369780 $S405490289
Increase in Mtr 8.271 (834,680) 10,097,498 109932,178
Increase in Wstwtr 8.501 (480,468) 5,746,688 6,235,156
,601 $43S96S7 $71,2809966 $7107160623
Overall Change
I
I
E
I
I
i
i
I ,
i
i
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
Denton Municipal Utilities, Public Utilities Board, Customer Service
Department, Data Processing, Legal Department, City Council and
Citizens of the Community.
Respec ly subm t ed,
sea
11-
Lloyd a r r e
City anager
Prepared/Approved by,
R, E. Nelson, Executive Director
Department of Utilities
Exhibit I Summary of Proposed Rate Change
II Existing vs Proposed Electric Rates
III Standby, Supplementary and Maintenance Service Rate
IV Development of Revenue Targets for Water
V Current vs Proposed Water Rates
VI Development of Revenue Targets for Wastewater
VII Current vs Proposed Wastewater Rates
VIII Minutes PUB Meeting of 8/4 and 8/23/89
!
i
I
I
1
~J
I
649SU.1-8
I i
)
EXHIBIT
DLM•ON "ICIPAL UTILITIES
SUMMARY OF PROPOSED RATE CHANCY
FY90
` Revenues (d)
Chants
Existing Proposed. ••••S••.•.•
1. R1 Residential 6
. •
1,474,962 1, 445,017
•(29,679) (2.03)
( 2. R2 Aealdaaelal 16,772,055 11,554,722
! (117,333) (1.i6)
1• C9 Cenral Service 19,060,403 19,765,453 665,050 3.39
4. CP • Cenral Service Prl. 2,566,230 2.491.003 (100,227) (3,17)
S• LP • Large Powr •
I 9,665,970 1,307,312 (1,331,311) (14.06)
6. RY • Religioua worship 475,912 469,297 (1,615) (1.40)
7, T1 • Teepotary Service 55,632 60.132
5,200 9.35
i 1, C1 Local CowrnsNnt 2,760,953 2,656,613
97.730 3.54
9. G2 Street Lights 320,530 332,936 12,426 3,16
10. 03 - Signal Lights 76,024 71,707
11. Dl Dunk to Dave L! to 2,613 3.33
gh 136,036 171,165 22,129 14. U
` 12. N • Athlstlo ?laid Lea. 10,000
f 10,000 0 .00
13. DWI Total DOCCOU "
$3,436,710 34,349,219 (117,491) (1.60)
I
I i
I
I ~
~I
I
I
1
y.y y.l
Exhibit II
ELECTRIC RATES
EXISTING VS PROPOSED
EXISTING PROPOSED
RESIDENTIAL IR11
FACILITY CHARGE 55.50/MONTH
ENERGY CHARGE s6.50/`1ONTH
1.650/KWH 4.230/KWH
RESIDENTIAL (R21
FACILITY CHARGE S6-5U/MONTH
ESERGY CHARGE 57.50010NTH
SLMMER - FOR 3000 hw'H 5.650/KWH
ADDITIONAL KWH 5.150/KWH
WINTER - FOR 1( ' KWH 6.150/KWH 6.Oc/KWH
5.150/KWH 4.950/KwH
ACDFTi -%L KwH 4.650/KwH 4.450/KWH
GENERAL SERVICE IGS)
FACILITY CHARGE
DEMAND 510.00/MONTH 315.00/MONTH
1st - 5Kw - - 20 KW - 0
ADDITIONAL KW - 0 15.75/KW 17.00/KW
ENERGY IST 700 KWH 7.5c/KWH - 2,500 kwh 6.560/kwh
1 j ADDITIONAL KWH 3.50/KWH 3.50/KWH
I
RELIOIOUS WORSHIP IRW)
FACILITY CHARGE
310.90/MONTH 8E5.00/MONTH
DEMAND lot - 5KW - 0 - - 20 KW - 0 _
(NO RATCHET) ADDITIONAL KW 13.75/KW 33.75/KW
ENERGY t3T 750 KWH 7.5c/KWH 7.50/KWH
ADDITIONAL KWH 3.250/KWH 2.920/KwH
I~ LOCAL GOVERNMENT (01)
FACILITY CHARGE $10-0/MONTH 115.0/MONTH
DEMAND CHARGE $4.5/KW 16.0/KW
ENERGY CHARGE 3.250/KWH 2.980/KWH
GENERAL PRIMARY (OP)
FACILITY CHARGE $45.0/MONTH $50-0/MONTH
DEMAND CHARGE $5.75/KW $8.0/KW
ENERGY CHARGE 3.1c/KWH 2.03c/KWH
LARGE PRIMARY (LP)
FACILITY CHARGE 145.0/MONTH
I DEMAND CHARGE 160.0/MONTH
15.50/KW $9.0/KW
ENERGY CHARGE 2.950/KWH 1.36o/KWH
ALL ABOVE RATF9 ALSO WOULD PAY THE PRESENT 1.9 c/KWH
ENERGY COST ADJUSTMENT ON ALL KWH USED
i
ii
M1r6
11'
rfe}(! 0
I
SCHEDULE ES
31-Jul-ag
$TANOBY. Sl1POi cucNTARY AND biAINTENAN c SERVE 03:04 PH
APP CAT N
Applicable in all areas served by the City to customers who
(1) own and/or operate an electric power generation facility mainly
used for nonemergency uses and which has a total nameplate or
effective capacity. (whichever is lesser) of fifty (50) kW or
more in parallel with the City's electric system for the purpose
purpose of generating power !or the customer's own consumption,
and
(2) employs equipment which is compatible with the City's electric
system at the customer s delivery point and which will cause no
damage to the City's electric system or equipment or present
unduo hazards to City personnel, and
(3) execute an agreement for interconnection and parallel operation
with the City.
INTERCONNECTION MOTS
The customer shall reimburse the City for any equiMant or facilities required as
a result of the installtion by the customer of generation in parallel with the
City's electric system,
i
The customer shall pay all costs of the City to extend its facilities or modify
then at the time of interconnection, or at some future time in order to permit
parallel operation of the customer's facility.
I
I
TYPE OF c avTre
The City shall supply alternating current, sixty (60) cycles at the voltage and
phase of the City's electric system most available to the location of the
customer, The primary voltage customer shall own, operate and nsintain all
facilities necessary to receive three phase primary voltage service and all
transformation facilities required for conversion to utilization voltage, The
City shall own, operats and maintain all metering facilities, either at primary or
secondary voltage, at the City's option, where the City elects to meter at
1 secondary voltage, the secondary energy and on peek demand charges shall apply,
11 ~ ~lITMLY RATEc
Primary Secondary
(1) Facilities Charge --Servl u _ Se_ rvc
360,00/30 days $25.00/30 days
(2) Demand Charges:
On Peak Osmand $10.10/kW $10.20/kW
System Demand $ 3.50/kW $ 3.70/kW
(3) Energy Charges:
Non Emergency Energy $ 0,0020/kWh $0.0030/kWh
Emergency Energy $ 0,0520/kWh $0.0530/kWh
(4) Energy Cost Adjustment Per E.C.A. Schedule
i
i
P
SCHEDULE ES 31-Jul-69
STANDBY, SUPPLEMENTARY ANO MAINTENANCE SERV) 03:04 PM
(Continued)
MINIMUM MONTHL UUM
The miminum monthly billing shall be the highest of the following:
(1) The sum of the Customer Facilities Charge, the On-Peak Demand
Charge and the System Demand Charge. or
(2) A charge of $1.00 per KVA of installed transformer capacity,
DETERMINATION OF ON-PEAK DEMAND
The on-peak demand shall be the maximum kW demand supplied by the City during the
fifteen (16) minute period of maximum use during the on-peak hours as recorded by
the City's demand meter and adjusted for power factor, but not less than one
hundred percent (100%) of the maximum on-peak demand which occurred during the
previous billing months of June through September in the twelve (12) months ending
with the current month,
DETERMINATION OF ON-PEAK DENaNn - COOENERATIDN UNIts unT neeeartirn
At{~CUSTONERS PEAK DID NOT rrNTernine TA C1TVre NUAL CVCTCY ocaw
If a customer's cogeneration unit(s) is/are off during peak hours, and the
customers peak did not contribute to the City's annual system peak, and the
co-generation unit is one (1) MW or larger, then the nameplate rating of the
customer's unit(s) shall be daducted from the peak demand.
The customer shall be charged the appropriate on-peak demand charges for the kW
f supplied by the .ity for the succeeding twelve (12) months,
I
DETERMINATION OF SYSTEM ncuxun
{
i The system demand shall be the sine of the maximum kW demand supplied during the
fifteen (15) isini4o
period of maximum use as recorded by the Cityrs demand meter
plus the kW nameplate rating(s) of the customers generator(s).
In no event shall the system demand be less than seventy percent (10%) of the
maximum on-peak demand similarly determined during the previous billing months of
June through September in the twelve (12) months ending with the current month,
GETERMINATION OF NON-EM RGENCY ENERGY
All energy supplied to customers whose generating units are lose than one (1) MM
capacity.
V
i
i
i
l
i
y
SCHEDULE ES 31-Jul-89
03:09 PM
,STANDBY, SUPPLEMENTARY AND MAINTENANCE SERVICE
(Continued)
DETERMINATIQI~OF EMERGENCY ENERGY
Emergency energy is all energy supplied by the City during peak hours of operation
to displace energy normally supplied by customers one (1) MN or larger unit,
I
POWER FACTOR PENALTY
7ne City reserves the right to determine the power factor of the customer's
installation served during periods of maximum demand or by measurement of the
average power factor for the monthly billing period. If the power factor is below
r---1 ninety percent (90x) during on-peak hours, the demand for billing purposes will be
determined by multiplying the uncorrected KW billing demand by 90% and dividing by
the determined power factor. The formula is as follows:
Unadjusted billing demand X .9
Determined power factor
II ~
DEFINITION OF ON-PEAK HOURS
I
The City's on-peak hours, for the purpose of this rate schedule, are designated' as
being from 1:00 PM to E:00 PM each Monday through Friday, starting on June 1 and
continuing through September 30 each year.
QEFINITION OF QFF-PEAK HOURS,
The City's off-peak hours, for the purpose of this rate schedule, shall be all
hours not designated as on-peak hours,
SPECIAL FACIL TIES
All services which require special facilities in order to most customers's service
requirements shall be provided subject to the specie,l facilities rider,
PRORATION OF UTILITY BILLS
(a) Billing for demand shall be calculated on a 30 day per month
basis and prorated for longer or shorter billing periods using
the following formula:
i
Actual days in reading period
X Customer Charge
30
3
i
f
e
i
i
SCHEDULE ES 31-Jul-89
03:09 PM
STANDBY. SUPPLEMENTARY AND MAINTENANCE SERVICE
(Continued)
PRORATION Of UTILITY 81LLS (Continued)
(b) Billing for demand shall be calculated on a 30 day per month
basis and prorated for longer or shorter billing periods using
the following formula:
Actual days in reading period
X kW Billing Demand X Rate
30
CREDIT FOR ENERGY OELIVEREO INTO CITY'S SYSTEM DURINO ON-PEAK HOURS
If Customer-produced energy is fed back into the City's syster, during on-peak
hours, an amount equal to fuel cost calculated in ac:ordance with Schedule E.C,A,, 1111
as applicable to such energy is credited monthly, provided that Customer has paid
the City for necessary added metering, protective and other equipment as
determined by the City.
CREDIT FOR E4EROY DELIVERED IN 0 TV S SYSTEM OURINO OFF-PEAK HOURS
If Customer-produced energy is fed back into the City's system during off-peak
hours, an amount equal to $0.01241 per kWh (for each kWh delivered back into the
City's system) will be credited monthly, provided that Customer has paid the City
for necessary added metering, protective and other equipment as determined by the
City.
ENERGY COST ADJUSTMENT
A charge per kWh of energy taken for fuel cost calculated in accordance with
Schedule E.C.A..
t___~/ PAYMENT ,
Bills are due when rendered, and become past due if not paid within twenty (20)
calendar days frog date of issuance.
LAM PAYMEMI CHARGES
Bills are considered past due if not received within twenty (20) calendar days and
shall be accessed a late payment charge of one and one-half percent (1.5%) per
month on any unpaid balance.
I
4
i
i
I
i
3
i
N
o ~ 1
^o `I
~ g w I ,
~ n
e n ~ Ir•
Z
Lo I
r w
N i
1 r ^ ~
7 .t
w M r p
r N A ^
~ ~ A^ ^ ~ N ~~•r ~ ~w N
r r ~i ~ r S. e.
~ Fee Z & M t' ¢
rr ~ w ~I ~
N ~ ^ r
A
A M N 1
1 Lp w V I
I ^
A N_ ~ N
C i
:C o 0
M
~1 ~
is
N y O I
P~ N I
40
ti N r ~I 1
i y •
{ M I 1
1
i
i
I
k;
i
C t
31-Jul-89
City of Denton Water Utility
Current vs. Proposed Rates
Rate Schedule Proposed Current
Rates Rates
Residential Rate WR
3/4" Meter $6.75 $6.50
V Meter 8.00 7.75
1 1/2" Meter 11.50 11.00
2" Meter 12.75 12.25
First 15,000 gal 1.85 1180
15,000 - 30,000 gal Summer 2.75 2.55
'I All over 300000 gal Summer 3.30 3.10
15,000 - 30,000 gal Winter 1.85 1.85
All over 30,000 gal Winter 1.85 1.90
Commercial/Industrial Rate WC
3/4" Meter $14.25 $12.75
1" Meter 15.50 14.00
1 1/2" Meter 18100 16.25
2" Meter 20.00 18.00
3" Meter 58.00 53.50
4" Meter 95.00 90.00
j 6" Meter 120.00 115.00
` 8" Meter 137.00 130.00
Commodity Charge/1000 gal
Commodity Charge/1000 gal 2.00 1.85
i
I Safes for Resale Rate WW1/WW2
Minimum Charge WWI $155.00 $150.00
1 Minimum Charge WW2 $170.00 164.25
W3 Demand Charge per 1,000ga1 20.00 16.00
W3A Demand Charge per 1,000gal 27.40 21.88 +
Commodity Charge 0.85 0.73
Over 3,000,OOOgal NA NA
lntra-Govt Finished Water Rate WO
r 1 3/4" Meter $11.25 $11.25
1" Meter 12.50 12.50
I 1 1/2" Meter 15.50 15.50
2" Meter 17.50 17.50
3" Meter 53.50 53.50
I 4" Meter 85.00 85.00
6" Meter 107.00 107.00
I 1
~ 8" Meter 125.00 125.00
Commodity Charge/1000 gal
Commodity Charge/1000 gal 1.90 1.80
11
r ~
Intra-Govt Raw Water Rate WGU
Minimum Charge f115.U0
Commodity Charge/1000 gal 1.10 1115.00
1.05
Standby Fire Service Rate WF
ti" Line
8" Line f2233..2050 12U.60
32.06
Metered Hydrants Rate WFH
Customer Charge Minimum $22.00
Commodity Charge/10001ai 2.00 !21.90
1.90
I
I
i
~ I
E `
i
i
{ 1
~1 •
i r
i
h F
i
40
M i1
r
s
r yry
to
r
i y r ~ ff~ii « f3 •
• •
40
j # 40600
w ~ Y
~ ~ • 1V w
«
to r~~ r
t
w_
r
w
r
'O . V •
! r 49 :
w
M
M
yM u
N N
f
w M
i LV N y
_ F
I C
F
I~
l
l
r i
}
r
t
City of Denton Wastewater Utility
Currant vs. Proposed Rates
Rate Schedule Proposed Current
Rates Rates
RESIDENTIAL SEWER
Facility Charge 13.00 $3.00
Commodity Charge/1000 gal 1.50 1.50
REGULAR COMMERCIAL SEWER
Facility Charge $7.25 16.50
Commodity Charge/1000 gal 1.78 1.60
I
PRETREATMENT SEWER
Facility Charge 17.25 18.30
Volume Charge/1000 gal 1.90 1.60
Surcharge - SOD $/ppm ~ 250 0.000743 0.000690
- TSS $/ppm > 250 0.000751 0.000396
ATING PLACES
Facility Charge $7.25 16.50
Volume Charge/1000 gal 2.20 1.60
I
EQUIPMENT SERVICES
Facility Charge $7.25 16.50
Volume Charge/1000 gal 2.20 1.60
4 WHOLESALE SEWER
Facility Charge $125.00 $125.00
Commodity Chayge41000 gal 1.95 1.55
INTRA•GOVERNMENTAL SEWER
Facility Charge 17.50 $6.50
Commodity Charge/1000 gal 1.60 1.60
RESIDENTIAL SEWER SERVICE TO USERS
WITHOUT DENTON WATER SERVICE
Fso Char Corporate Lots $2.25 $2.25
Fao Char 0 Corporate Lots 3.35 3.35
Commodity Charge/1000 gal CL 1.50 1.50
Commodity Charge/1000 gal OCL 2.25 2.25
I
i
i
i
i
1
I
D R A F T
EXCERP'T'
MINUTES
PUBLIC UTILITIES BOARD MEETING
September 270 1989
4. HOLD PUBLIC HEARING ON PROPOSED WASTEWATER RATES.
LaForte opened the public hearing by advising that at the
last meeting of the City Council, they approved the water
and ateselintrpartatbecausodeofrrincreased wastewater
r
system restaurants rthan the
restaurants g
equipment services have impacted services.
average user.
LaForte then opened the Public Hearing requesting each
person state their names for the record and present
input:
a) "I am Bill Johnston, owner of the Kettle Restaurant
and President of the Restaurant Association, and
have been informed that we should have nowntof Cthis
ity
issue one year ago, but Monday, prior Council meeting is when we first heard of it. since
then, we have been scrambling to come to an
understanding of what was going on with sewer rates
and why we are being singled out and we understand
there will be a 30-37% increase next year. I am
with try to oft aurfoducks
back time
rmal
in here line plead and cfor ome more
1 proposal. But to start off with as an alternative,
(T have looked at the cost of service study, and the
recommendation was an 8.58 increase) (although
restaurants are not ready to concede that we are the
major portion of the problem) we provide payrolls,
serve as city ambassadors and we feel you should
support the infrastructure. If this system is based
on increase of business costs, the overall users of
the system should be charged 8.5% and we will go
with that. The only other thing I would like to say
Is that at 10 this is a impact on even Chew: "stow much time do you need?"
Johnston: "Six months would be nice."
Chew: "For you to come up with another proposal?"
Johnston: "The Cost of Service Study is fairl in detail and
I
i
I
I
i
ti
LaForte: "Are you going to employ experts?"
Johnston: "That would be the idea."
Laney: "Would staff have the data which compares the class
of customers?"
Nelson: "Yes. It is right here."
LaForte: "First, we will hear the public regarding this
issue."
Gavin: "I am John Gavin, Manager of the Sheraton, President
of the Hotel/Motel Association, and member of the
Restaurant Association.
I just found out about this yesterday. I would like
to have some time to look at this and meet with the
other members of the Hotel/Motel Assn., and I would
appreciate the opportunity to inform them."
LaForte: "There is no special impact on the Sheraton other
than that rate being charged to the commercial class
of 114 .
The newspaper covers these meetings. It is hard to
tell people to read the newspaper."
Nelson: "We ran two Sunday 1/4 page ads outlining the
proposed rates."
LaForte: "No one did this in such a way to keep anyone in the
dark= all activities were accomplished openly and
r j above board."
I
j Burg:
"My name is Geneva Berg, and I am owner of the
Locust Street Grill. I missed the announcements also
and I think we need more time, but I just placed
orders for menus at $1200. We have got to make a
budget of $800-1000 more per year for me, and I need
time to adjust to this. The smaller business can
only absorb so much increase before they shut the
doors. There is just too much that is going up at
the way they are doing now."
Davis: "My name is Don Davis of Davis Bakery. Are bakeries
with restaurants or how are we classified?"
Nelson: "They are regular commercial."
i
i
Compton:
"Ply name is Stephanie Comptom. I recently opened a
business on the square, and what I see as a new
business owner trying to expand is that I have
trouble meeting all the increases and would like to
stay in business and I speak as a concerned person
with all the overhead of a r.zw business."
LaForte:
"Is your business a restaurant?"
Compton:
"I have a deli."
Dutia:
"We are providing an exemption if you qualify for a
deli."
Martin:
"The exemption is for pre-packaged, pre-wrapped food
with little or no processing; however, if the deli
is processing foods, they may fall under the
proposed rate."
LaForte then called for any others who may wish to speak
before the Board. No one came forward and the Public Hearing
1 was officially closed.
LaForte then opened the floor to comments by the staff.
Nelson stated that he had some information on how the staff
I proceeded to develop rates and would present this information
at this time if the Board desired. The Board concurred.
However, b~_r.~re the presentation, LaForte made the following
)I comment.,
"How does the Utility's proposed wastewater rate increase
compare with rate increases proposed by the School Board,
the City of Denton, the County, etc.? I agree these
people are getting hit hard by many levels of government;
but why should we be the level of government that backs
away? If they are going to lower taxes for everybody
then we could consider lowering sewer rates."
Nelson indicated that the staff would prepare such a
comparison if the Board desired. He then presented the format I
of how staff came about setting the rates, the waiver options
and alternatives by presenting the following information: (the I
goal of this presentation was to show the rather difficult and
involved process of ratemaking)
a) Table showing proposed rates.
I b) Table showing gallon/day usage.
c) Table showing impact of rate on per customer basis
t
i '
i
I! I
1
a
At this point, Nelson pointed out that the actual increase to
this rate class (restaurants and equipment services) should be
77-788 according to the City's cost of service analysis. This
analysis was then reviewed by Nelson and he explained cost of
service includes such components as wastewater treatment
plant, pumps, manpower, etc. After cost, staff looks at the
cause of such cost, i.e., is it transportation, volume,
reside~tialf levvel, anthe TS city etc. He
treats pointe out
billion that at the
effluent per year, representing 348 of the system. gOnleating ons of
establishments, the city treats 67.8 million gallons per year,
or 2.18 of overall treatment volume. However, these same
eating places represent 78 of the SOD treatment costs.
Nelson further advised the strengths of wastewater consist of
SOD (grease, fat, gasoline, detergent for dishwashing, etc.)
In residential, this wastewater strength is measured at 180
milligrams per liter] in commercial, this wastewater strength
is measured at 250 MO per liters in eating establishments,
this wastewater strength is measured at 800 MO/L. This figure
used by the City is very conservative (800 MO per liter).
Other cities much higher levels, i.e., 1008, 13680 1074, etc.
LaForte asked how can staff tell what eating establishments
are doing?
Martin indicated that this is generally associated with the
type of discharge into the system, ie., dishwashing
detergent, food particles, grease, etc., and it all boils down
to the relative strengths. The higher the strength of SOD the
harder and costlier the wastewater is to treat. In the city
of Denton, the Utility has to treat wastewater that comes in
to the system anywhere from 250 BOD/250 TSS, and get it down
to 10 BOD/15 TSS. (This treatment level is mandated by the
Environmental Protection Agency under our license.)
i
LaForte asked how the staff knows these restaurants/equipment
services are at a high SOD. Martin advised that this
information is obtained primarily from tests. on restaurants,
the city also went outside of our system and slot information
from other cities in the area. All cities surveyed have
already enacted such a rate for this t
Arlington, Ft. Worth, etc., through testing alleshowdveryahigh
levels of SOD and TSS exiting restaurants, leaving our figure
of 800 very conservative.
LaForte asked if there is some way the city can meter to
j measure each individual restaurant.
' I
i
f
M
q~
Nelson stated the utility could do that for each individual
customer; the test run takes three to four days, Arlington
does this type of testing. The manhole installation would
cost from $400-$800 to install, the sampling equipment would
cost the Utility approximately $3000, and each sample would
cost the restaurateur from $100 to $120 four times (quarterly)
per year.
rrady commented that these costs could exceed those of
the proposed increase.
One of the people in attendance at the meeting inquired if the
dorm at University of North Texas and Tx Woman's University
had to
pay? Nelson advised that when you consider a dormitory
and the associated eating service, the wastewater discharged
into the system consists not only of that from the cafeteria,
but also numerous showers and other water usages which blend
together to produce a wastewater with a much lower treatment
level requirement that for the restaurant/equipment services
situation. Therefore, unless the cafeteria can be separately
metered, they would be charged at the regular commercial rate.
LaForte asked about other cafes and student eating places not
in this situation. Nelson stated that !f these are separately
metered, they would be charged at the restaurant rate.
LaForte stated that the thrust of this entire process of cost
of service ratemaking represents an attempt to be fair and
equitable to all concerned and, if the University's are
impacting the system, the universities ought to pay more.
Nelson stated another way we can handle the problem of
recovering increased treatment costs caused by the
universities is to compute the total discharge and, if they
exceed 250 mg11, add a surcharge as per our pretreatment
ordinance and rate. Martin indicated that one of the tasks
assigned to his area by the EPA is that the City must include
University of North Texas and Texas Woman's University in the
pretreatment program, and the Utility will be actively
sampling their discharges and these will be a part of this
pretreatment program/process,
Laney stated that this treatment program and associated
increased costs are not of our own making to a large extent,
and the community needs to realize this. The state and
Federal governments have mandated standards that are making it
tremendously more expensive for the city to treat wastewater
at the City plant. In fact, at the water treatment plant, the
Utility will soon incur the expense of moving to ozone
treatment at the direction of the federal government.
Thompson stated that despite the 408 increase, these
I comparisons with other cities show that Denton businesses are 1
1 better off than those in other areas.
1
i
q
i
i
Nelson reviewed the impact the restaurants make on the system
rointirg out that a residential inputs 1 pound of BOD/1000
gallons of wastewater, whereas a restaurant inputs 7 pounds of
BOD /1000 gallons of wastewater.
Nelson also showed rate comparisons for this rate class with
Austin, Ft. Worth and other surrounding communities, and their
very high rates indicate that Denton certainly has not gone
overboard on this proposed rate.
He also showed that Eating Places represent:
$114,000 in revenue to the city
$202,000 in costs to treat
Showing an undercollection in this group of 77% or an increase
of $88,000 to get the rates up to where they are paying their
way. Nelson also pointed out that residentials are overpaying
by 3.2% or $70,000 where they should have a 3.28 reduction.
Nelson advised that, in trying to bring rates to a cost of
service level, it somet}mes would not be possible to move such
rate up all at once, but is better for those affected to phase
in such a rate. Alternatives are:
a) Implement full cost of service increase of 781
i
b) Implement proposed rate increased.
i
C) Implement lower than proposed rate.
d) Delay implementation.
e) Phase rate in over three (3) years vs two (2) years.
Nelson stated that staff strongly recommends that if there is
any delay in the rates, we separate cut this class and
implement the rest of the customers rates since the Utility
will loose one quarter of a million dollars in Fix months of
a delay in wastewater rate implementation.
! Nelson further indicated staff would suggest to phase in the
restaurant/equipment services rate over a three year period vs
a two year period if the Board considered the 40% increase too
burdensome.
LaPorte asked if Nelson could comment in a general way how far
the proposed rates go in reflecting the cost of service.
Nelson stated that the Eating Places and Equipment Service
rates are under recovering actual costs. In fact, the
residential should be receiving a 3.2% reduction, but PUB
recommended that such a reduction not be given et this time,
so an overcollection is reflected in this rate class of 3.2%.
I
I
a
If such a reduction were given this year, increased
treatmentcosts mandated by the EPA in upcoming years will
cause greaterinereases in future years.
can the commercial rate, they are experiencing a 99 increase in
costs, and the staff recommended an 118 increase. Therefore,
the commercial class is being overcollected by 28.
We do note that our pretreatment customers (those that EPA has
indicated may discharge hazardous waste into the system)
received a 30% increase, whereas, this should have been 40%.
The eating establishments/equipment services should receive a
778 increase and a 408 "phase in" increase had been
recommended.
LaForte asked if these rates then, generally speaking, reflect
the cost of service. Nelson replied yes.
LaForte asked what is the dollar amount of money concerned in
the rate in.rease to restaurants. Nelson indicated that
$46,000 is the total that has brought these people to the
meeting this evening.
LaForte inquired, on a three year basis, what money is lost
the first year, the second year, and the third year.
Nelson replied that $42,000 would be lost within two years,
and the Utility would have to make cuts in the budget to meet
such a loss. LaForte inquired as to what service cuts would
need to be made. Ham indicated that some replacement of lines
would be discontinued and patching instead of replacing would
take place. This would build up long term costs instead of
short term costs. LaForte stated if we do this for three years
what are the costs. How much are you going to get out of
rates in 19937 Staff indicated this is impossible to tell at
this time.
LaForte made it clear that the Utility does not gave
sufficient funds at this time to make all adequate repairs to
lines.
Thompson commented that he was pleased to see these people
here. He emphasized that the Board wants the restaurants to
stay in business, and the city needs to be equitable to all of
the citizens of the community.
LaForte stated that this problem is greater than the
utilities. "I sympathize with you, but when Mr. Johnson
called his restaurant a culprit, I don't agree with that. We
hope he prospers and does well. We hope he continues to
prosper and do well. However, it is hard to believe it is
more equitable to charge across the board and charge people
who are not creating the problem."
I
i1
I
•e
t' 1
Laney stated a concern that if the proposed rate:+ are phased
in over three years, the Utility will have two years of
shortfall. How will this be made up?
I
Nelson indicated again that the residential customer is
picking up more than their share. The government and the
commercial are picking up more than their share. Further, the
Utility Department is prepared to shut down certain protects.
i LaForte asked if the Board wanted to reconsider the motion
before the Board. LaForte stated that the City Council needs
to make the decision based upon the best advice the Board can
give.
Chew stated if City Council refers an item back to the Board,
1
the Board needs to look it alternatives. LaForte commented
that the Board has looked at five alternatives, the only two
he would consider acceptable, are as originally proposed or go
for a three year phase in. Chew indicated that the 40%
proposed now is too high.
Nelson expressed that phasing in of a new rate is a valid
principal of rate design in order to not overburden a
particular class; staff would recommend a three year phase in.
LaForte stated that he wanted it understood that staff has
recommended a three year phase in of the proposed rate.
LaForte called for a motion.
Laney made a motion that it be recommended to the City Council
that the wastewater rates for eating places and equipment
services be phased in over a three year period in equitable
increases to reach 77.23% for eating establishments and 76.72%
for equipment services. Second by Chew.
Thompson made the following statements
"We are members of this board to advise City Council on
ways to supply utilities of the city and to be as
equitable in proposing rates as we possibly can. We have
done that. Extending this for three years will do damage
to the system. City Council is the elected
representative body that hao to weigh the political
conditions of the city, and they make the political
compromises that have to be made. It is not our function
to make that compromise. This decision is an intrusion
into decisions city council needs to make, and I will
have to be against this motion."
LaForte st+'.ted that this is a question of being inequitable
over two years or three years. The proposed rate itself is
inequitable because it should be an increase of 73%. He
further stateds
I
I
I
II,
Another point I want to make is that staff is skilled
in technical judgments that need to be recommended.
Staff has recommended we go to a three year incremental
increases a fo:ther consideration is tr.at no other rates
have been raised tonight as a result of three year vs a
two year phase in.The same recommendation for all other
rates is the same that has been recommended previously.
This Board is doing what it thinks is in the best
interests of the general wellbeing of the citizens of
Denton. Anytime the City Council or anyone else feels
this is not the case, they can remove me or remove the
Board altogether."
Tullos advised that the way the motion is worded, it would
preclude any additional increase due to increasing costs next
year. Nelson stated this may be locking the Utility into the
current proposed cost of service increase.
Laney withdrew the motion.
Laney then made a motion that it be recommended to the City
Council that the wastewater rates for Eating Places and
Equipment Services be increased in proportionate increments
over a three year period, such incremental increase for the
first year to be 25%, and the second and third year to be
proportionate in order to assure that cost of service rates
are achieved for these rate classes at the end of the three
year period. All other proposed wastewater rate adjustments
remain as originally proposed. Second by Frady. Four ayes,
one nay (Thompson►. Motion carried.
I
1 ( i
MINSEPT.27
i
i
I
I
i
i i
J~
` l
t
LIZ=
i
i
I
I,
i
I
i
I ,
I
Now
t
October 3, 1989
CITY COUNCIL AGENDA ITEM
TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Lloyd Harrell, City Manager
SUBJ: CONSIDER ORDINANCE APPROVING THE LONE STAR GAS CONTRACTS.
RECOMMENDATION:
The Public Utilities Board, at their meeting of May 24, 1989,
recommended to the City Council approval of the fallowing gas
contracts:
1. Lone Star Gas Sales Contract
2. tone Star Gas Transportation Agreement
3. Lone Star Transfer of Gas Agreement
4. Enserch Gas Sales Contract
SLIMY/BACKGROUND:
The Lane Star contract expired at the end of 1988 and negotiations
have been in progress since October 79CB on new five (5) year
contracts.
i. Lone Star Gas Sales Contract is a base contract for i BCF of gas
(approximately 1/3 of total requirements) with a 50% back out
provision to allow Denton to purchase gas from another supplier
through another pipeline beginning in 1990, It has a demand or
availability charge of $0.375/MCF which would amount to $375,000
If no gas was purchased under the contract, but allows credit of
up to 75% of this charge by $0.22/MCF gas purchases either from
Lone Star or Enserch.
- The purchase price has a beginning base
price and $0.38/MCF for remainder of the $0yea r 42/MCF in
for
transportation of the gas plus Lone Star's wellhead y as rice
which is presently approximately $3.41/MCF, The transportation
rate escalates at $0.01 per year. This contract allows the City
to have 1 MCF per day for plant protection or pilot gas during
curtailment.
i
2. The Enserch Gas Contract allows the City to purchase up to
25,000 MCF/day under "spot" market price conditions from Enserch
instead of using contract gas under the lone Star Contract.
1 Present "spot" price is $1.55/14CF. A transportation fee of
$0.15 to $0.20/MCF would be added to this "spot" price.
R
I
I
i
I
i
I
~ II
~I
Fq
1
CC Meeting
Page 2 j
1
3. The Lone Star Gas Transportation Agreement allows shipment cf up
to 30,000 MCF per day at a price of .50.20/MCF for volume less
than 5,000 MCF/day and $0.15/MCF for volumes exceeding
I 5,000/MCF/day.
4. The Lone Star Transfer of Gas Agreement allows Denton to have
gas delivered to other cities generating plants instead of
Denton. However, this is at the total discretion of Lone Star
if other cities do not have a gas contract with Lone Star. If
Lone Star does allow transfer to non-Lone Star contract cities,
Denton would have to pay a $0.20/MCF. If other cities have a
contract, Lone Star will unconditionally transfer the gas at no
charge.
FISCAL IMPACT:
The City presently receives approximately 35% of its power
requirements from gas generation. The cost of fuel has an effect on
our economics dispatch (i.e., split the sa.ings) as well as gas used
in our plant. We estimate $7.9 million for gas generation this
fiscal year and about $11.3 million by 1993 due to f,crease in both
price and quantity of natural gas.
1 PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED:
City of Denton, Texas Municipal Power Agency, Texas Municipal Power
Pool, Lone Star Gas, power production costs.
i
Respe ully subm t d,
o rre
11 0 y
Man ger
r
Pre -d by.
E. Ne s n, Executive Director Department of utilities
Exhibit I Four (4) Gas Contracts
II Ordinance
T11 PUB Minutes of May 24, 1989
b515U:1-2
J
{
i
~ j
J f.41
A.bJ.,ia
.:s rr r~
I
I
CAS SALES CONTRACT
BETREN
LONE STAR CAS COKPANY
AND
CITY OF DENTON, TEXAS
~ I
i
I
s DATED JANUARY 1, 1989
i
i
1
i
1
i
I t
I
i
1
II1 V4ielii ,:A end i~
1
TABLE OF CONTENTS
sBTIiLE
I Definitions 1
II Subject Matter 3
III Quantity 3
IV Demand Charge 8
V Quality 10
Vi Delivery and Connection Facil'ties 12
h
VII Measurement 13
VIII Price 16
IX Adjustment for Heattng Value 19
I
X Reimbursement for Taxes anJ Rentals 19
XI Payment 22
i
XI1 Term 24
j XIii Force Majeure 24
XIV Curtailment of Deliveries 26
XV Regulatory bodies 28
XVI Termination Privilege 28
~ XV1I Intrastate Provisions 3G
XVIII Warranty 31
XIX Right of Way 31
1 XX Indemnity 31
f XX1 Waiver of Breach 32
XXII Assignment 32
XXIII Miscellaneous 32
I ~ I
I i
I
i
i
,.t
CAS SASS CONTTL!CT
THIS CONTRACT, made, entered into, and effective on this let day of
January, 1989, by and between LONE STAR GAS COMPANY, a division of ENSERCH
Corporation, a Texas Corporation, hereinafter referred to as 'Seller', and the
CITY OF DENTON, TEXAS, a municipal corporation, hereinafter referred to as
"Buyer" ,
WIT8ES,5 E T H-*
WHEREAS. Buyer owns and operates an electric generating station known
and designated as the Spencer Generating Station, located in Denton County,
Texas
is hereinafter referred to as buyer a Plant (or Plant and
I
WHEREAS, Buyer desires to be assured of an adequate supply of natural
i
gas for the operation of said Plant, and Seller desires to sell gas to Buyer
under the terms and conditions of this Contract;
€ NOW, THEREFORE, in consideration of the mutual covenants and agreements
i
,
i herein contained, together with ocher good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer do
hereby contract and agree with each other as follows:
ARTICLE 1
i
k l J DUIR ITI0N8
For the purposes of this Contract, unless the context of the instrument
requires otherwise, the following definitions shall be applicable:
1. "Gae" shall mean natural gas prodscsd from gas wells, vaporized natural
gas liquids, gas produced its association with oil (casinghead gas) and/or
the residue gas resulting from pros using casinghead gas and/or gas well
gas.
i
l
ji
t
2. ",Day" shall mean the 24-hour period beginning at 7:00 a.m., Dallas time,
on one calendar day and ending at 7:00 a.m., Dallas time, on the fall- ing
calendar day.
3. `Month' or 'Billing Month' shall mean the period beginning at 7:00 a.m.,
Dallas time, on the first day of a calendar month and ending at 7:00 a.m.,
Dallas time, on the first day of the succeeding calendar month.
4, 'Contract Year" or 'Cale:nlar Year' shall mean a period of twelve (12)
k consecutive months beginning at 7:00 a.m., Dallas time, on January 1 of
each calendar year of the term hereof and ending at 7:00 a.m•, Dallas time,
on the same data of each succeeding year during the tern hereof.
5. •Mef• shall mean one thousand (1,000) cubic feet of natural gas,
{ 6. The term 'Btu' as used herein shall mean British rhermal Unit and, where
appropriate, the plural thereof. The term 'MMDtu' shall mean one million
j (1,000,000) Btu.
7. 't. i` ng Value' or 'Heat Content' shall mean the total heating value
expressed in Btu per cubic foot (gross heating value) of the gas delivered
lJ hereunder, and shall be determined at a temperature of sixty degrees (600)
Fahrenheit, saturated with water vapor and under a pressure equivalent to
that of thirty (30) inches of mercury at thirty-two degrees (3211) Fahrenheit
converted to base conditions of sixty degrees (601) Fahrenheit and an
absolute pressure of fourteen and sixty-five one•hundredtha (14,65) pounds
per square Itch and adjusted to reflect actual water vapor content.
B. 'Faia' shall mean pounds per square inch absolute.
9. 'Psig' shall mean pounds per square inch gauge.
I
1
2
s
!t7
10, 'Transportation Agreement' shall mean that certain Gas Transportation
Agreement between Buyer and Seller dated January 1, 1989,
11. "Transfer Agreement' shall mean that certain Transfer of Gas Agreement
between Buyer and Seller dated May 1, 1989.
ARTICla II
SUBJICT MATTIA
Subject to the terms and provisions hereinafter sat out and to the extent
of and in accordance with the terms, conditions and limitations hereinafter
stipulated, Seller agrees to sell and deliver to buyer and Buyer agrees to
purchase and receive from Seller, at the point of dol+.very herein provided for,
natural gas for that portion if the natural gas fuel -squirsments of Buyer's
j Plant during the term specified herein, including but not limited to Article III
hereof, hereinafter called 'Buyer's Fuel Requirements".
AATICUI III
QUANTITY
1. The quantity of gas, computed on an MKBtu basis, to be purchased and sold
hereunder shall be a volume of gas equal to that amount of Buyer's Fuel
Requirements specified by this Contract for its Plant, up to but not in
excess of Buyer's Maximum Hourly Volume, Maximum Daily Volume and Maximum
Annual Volume for each Contract Year, as such requirements are set forth
below:
Fgr Each Contract Year
- Maximum Hourly Volume 1,500 MMBtu
Maximum Daily Volume 30,000 MMBtu
Contract Year Beginning
January 1. 1989
Maximum Annual Volume 1,000,000 KKBtu
i
I
3
I
2,(a). on or before September 1 of each Contract Year during the term of this
Contract, Buyer shall submit written notice to Seller specifying the
Maximum Annual Volume obligation for the immediately following Contract
Year. The Maximum Annual Volume designated for 1990 and each
succeeding Contract Year shall not be greater than one hundred twenty-
five percent (1251) nor less than seventy-five percent of the Maximum
Annual Volume designated for the immediately preceding Contract Year;
however, Buyer may, once and only once during the term hereof, increase
the Maximum Annual Volume for any one Contract Year to equal more than
1
one hundred twenty-five percent (1251) but not more than one hundred
fifty percent (1501) of the immediately preceding Contract Year's
Maximus Annual Volume. rn no event will Buyer over establish a Maximus
I
Annual Volume of less than one million (1,000,000) MMBtu for any
j Contract Year.
i
(b). If, during any Contract Year, Buyer fails to submit a Maximus Annual
Volume as provided for herein, Buyer's Maximus Annual Volume for the
next succeeding Contract Year shall be equal to the Maxisrrs Annual
Volume in effect for the preceding Contract Year,
(c). Notwithstanding anything to the contrary contained herein, nothing in
i
this Article or any other provision of this Contract shall prevent
Seller from selling and delivering to Buyer hereunder quantities of
gas in excess of the volumes Seller is obligated to sell and deliver
hereunder, which Seller has available and desires to sell and which
Buyer desires to purchase.
3. Buyer agrees that all of the gas purchased hereunder will be used or
consumed In and for the operations of Buyer's Plant, and that no part of
4
1
I
I
i
7
such gas will be resold or used for any other purposes, except as otherwise
expressly provided in the Transfer Agreement,
D(s). Should Buyer, during any Contract Year beginning on or after January
1, 1990, receive a bona fide written offer to sell and deliver gas
directly to Buyer's facilities (which :trve Buyer's plant) through it
pipeline other than Seller's pipeline and at a price (including taxes,
transportation and all other costs necessary for delivery of gas to
f ~I Buyer's facilities which serve Buyer's Plant) lover than Seller's then
current price (including taxes, transportation and all other costs
necessary for delivery of gas to Buyer's facilities which serve Buyer's
plant) per MKBtu, Buyer may purchase and receive natural gas from such
other person, firm, or corporation in accordance with such offer (such
purchases herein referred to as 'Supplemental Volumes'); provided,
I
j however, the total of such Supplemental Volumes during own Contract
Year do not exceed the following volume limitations (herein referred
to as 'Maximum Supplemental Volume');
{ (1) For the Contract Year beginning January 1, 1990, and each Contract
Year thereafter during the term hereof, Buyer may receive
Supplemental Volumes not to exceed fifty percent (501) of the
Kaximum Annual Volume in effect for such Contract Year.
(11) Notwithstanding anything to the contrary contained herein, if
Buyer notifies Seller as provided in par4graph 2(a) of this
Article that it desires to increase its Kaximnm Arunul Volume for
any one Contract Year herein to equal more than one hundred
twenty-five percent (1251) but not mare than one hundred fifty
percent (150%) of the immediately preeeding Contract Year's
j 5
S
I
I
I
I
i
4
Maximum Annual Volume, then for such Contract Year and each
Contract Year thereafter the Maximus Supplemental Volume
limitation specified in this paragraph 4(a) shall be reduced by
twenty percent (201).
(b)• Notwithstanding the provisions of paragraph 4(a) above, prior to
entering into any agreement for the purchase of such Supplemental
Volumes, or prior to entering into any amendment to an agreement under
which Buyer may purchase Supplemental Volumes, buyer shall notify
Seller in writing of the terns and conditions of the bona fide offer
for such proposed Supplemental Volumes (including a complete facsimile
of the offer which is presented to the Denton City Council for such
i
proposed Supplemental Volumes), If Seller (or its assignee) (1)
within five (5) days of receiving Buyer's said notice if the delivery
period of such notice is one (1) month or lose, (it) or within thirty
j
(30) days of receiving Buyer's said notice if the delivery period of
such notice Is greater than one (1) month, offers in writing to sell
and deliver gas to Buyer 411 or any portion of the quantity offered
under such bona fide offer, under similar terms and conditions as
stated in Buyer's said notice to Seller, at the same or lower price j
(including taxes, transportation and all other costs necessary for
delivery of gas to Buyer's facilities which asrve Buyer's Plant) per J
MMBtu, then Buyer shall purchase from Seller (or its assignee) a
quantity of gas equal to the lessor of (i) the quantity offered in
writing by Seller (or its assignee), (it) a quantity equal to no less
than 50% of the quantity offered for purchase under the aforesaid
bona fide offer, or (iii) a quantity equal to no leas than fifty
6
I
I
percent (504) of the applicable Maximum Supplemental Volume limitation
set forth in the preceding paragraph 4(a) above, under Seller's (or
its assignee's) aforesaid offered tarsi and conditions rather than
under the aforesaid bona fide offer. If Sailer (or its assignee)
fails to meet or better the aforesaid bona fide offer as provided
above far all or a portion of the quantities offered under the bona
fide offer or if Buyer and Seller (or its assignee) cannot agree to
some other mutually agreeable offer within the said five (5) or thirty
(30) day period (whichever is applicable), nothing shall limit Buyer's
purchases of Supplemental Volumes under such bona fide offer provided
that during each Contract Year herein the sum of (i) all Supplemental
Volumes purchased by Buyer under any and all such bona fide offers
■nd (ii) all purchases of gas by Buyer from Seller (or its assignee)
under this paragraph 4(b), never exceeds the Maximum Supplemental
Volume for such Contract Year herein,
(c). If at any time during the term of the bona fide offer for Supplemental
Volumes, the terns and conditions of much offer are changed in any
manner from the vritten terms and conditions which Buyer provided
i
Seller, then Buyer shall notify Seller imoediately of such change.
Once Buyer has made such notification to Seller, then Seller (or its
assignee) shall have the right to offer to sell and deliver gas to
buyer for all or any portion of the quantity offered under the new
terms and conditions of such bona fide offer pursuant to the same
procedures as provided in the preceding paragraph 4(b).
(d). In the event Buyer enters into agreement(s) with other party(s) for
the purchase of Supplemental Volumes as set forth in this Article,
7
I
r
9
~I
-a
1
Buyer shall give Seller, at Seller's request, prior verbal estimates
I of such Supplemental Volumes which Buyer expects to purchase And
consume each month and shall notify Seller in writing of the actual 1
volumes of Supplemental Volumes purchased and consumed during such
month as soon as practicable after Buyer has knowledge of such
h volumes.
(e). Buyer's Supplemental Volumes shall not reduce nor be credited toward
Buyer's Demand Charge as ast forth in Article IV of this Contract
i 1
unless hereinafter specified.
AXTICtX IV 1
DEMAND CRAROR
1. Without limiting any obligations or rights of Buyer and Seller hereunder,
Huyer agrees to pay an annual fee to Seller for the availability of gas fuel
service under this Contract (herein referred to as 'Demand Charge-). For
mach Contract Year of the term herein, the Demand Charge shall be equal to
the Maximum Annual Volume in effect for such Contract Year multiplied by
the Demand Charge Rate of thirty-seven and one-half cents (37.50). j
2. Seller shall render to Buyer after the end of each Contract Year an invoice j
i
for the unaredited Demand Charge applicable for such Contract Year and Buyer
shall make payment to Seller for such amount no later than twenty (20) days
from the data Seller's statement is deposited postage prepaid in the United
states mail.
3. The Demand Charge due and payable by buyer to Seller at the and of each
Contract Year shall be credited as follows: For any Contract Year, Buyer
will receive credits toward such Contract Year's Demand Charge as defined
herein, by deducting the following amounts from the applicable Demand Charge
i
f
F
~l i
i
)
for such Contract Year.
(a). For buyer's purchases from Seller during any Contract Year of the test
hereof, excluding any volumes Seller (or its assignee) delivers to
Buyer as allowed under paragraph 4(b) of Article III, Buyer will
receive a credit toward such Contract Year's Demand Charge equal to
the product resulting from the multiplication of the total of all
M1Btus purchased from Seller hereunder during such Contract Year by
the Bass Price applicable to each such MKBtu purchased, as such Base
Price is defined in Article VIII.
(b), For Buyer's purchases from Seller (or Seller's assignee) during any
Contract Year is allowed under the terms of Article 111, paragraph
4(b), Buyer shall receive a credit toward the Demand Charge in effect
for such Contract Year during which such gas is purchased, and such
credit shall be equal to the product resulting from the multiplication
i
of twenty-two cents (220) by the total of such purchases (in MSBtu)
during such Contract Year. Notwithstanding anything to the contrary
:ontained herein, any gas delivered to buyer through pipeli-as other
than Seller's pipeline shall never be credited in any way toward
Buyer's Demand Charge.
For gas volumes which Buyer pays a transportation fee for under its J
Transportation Agreement with Seller during any Contract Year of the 1
term hereof, Buyer will receive a credit toward such Contract Year's
Demand Charge, and such credit shall be equal to the total of all
applicable 'Transportation Faa(s)' paid to Seller under the
Transportation Agreement for transportation of such gas volumes during
such year; provided, however, fot purposes of crediting hereunder,
9
7
I
I ~
1
I
I
r
I
such Transportation Fee will not include any amounts paid by Buyer for
gas lost and unaccounted for, gas used as fuel and gas used in day-
to-day day pipeline operations as described in the Transportation
i
Agreement.
4. Notwithstanding anything to the contrary contained herein, the combined
M
total anount to be credited toward Buyer's Demand Charge during any Contract
Year of the tern hereof under paragraphs 3(b) and 3(c) of this Article IV
shall never exceed seventy-five percent (751) of the Demand Char;,* {
applicable to such Contract Year.
i
I
5. Buyer shall never be entitled to recoup as gas any of Lhe payments made to
Seller under the terms of this Article IV.
AA?ICI2 V
QDALITT
1. Seller shall deliver to Buyer natural gas which is of merchantable quality
i
and commercially free from water, sand and other objectionable fluids,
II solids or gas components, end shall meet the quality requirements as
follows:
W. shall have a heating value of not less than nine hundred fifty (950)
I
Btus per cubic foot nor greater than one thousand one hundred and
fifty (1,150) Btua per cubic foot;
(b). shall contain no oxygen;
(c), shall have a temperature of not more than one hundred twenty degrees
(1100) Fahrenheit nor less than forty degrees (400) Fahrenheit;
(d). shall not contain more than one-fourth (1/4) grain of hydrogen sulfide
per one hundred (100) cubic feet;
j
(e). shall not contain more that, five (5) grains of total sulphur including
to
I ~
i
I
4
4
not more than one (1) grain of mercaptan sulphur per one hundrl,d (100)
cubic feet;
M. shall not contain mote than three percent (31) by volume of carbon
dioxide,
(g)• shall In no event have a water vapor content in excess of seven (7)
pounds per million (1,000,000) cubic feet of gas measured at a
pressure base of fourteen and sixty-five one-hundredths (14.65) pounds
per square inch absolute and at a temperature of sixty degrees (601)
Fahrenheit.
2, if at any time the gas foils to most the quality specifications enumerated
i
herein, Buyer shall notify Seller and Seller shall make a diligent effort
to correct such failure. If Seller is unable to deliver gas according to
such specifications, Buyer may refuse to accept delivery of gas for so long
as such conditions exist. If such a refusal is the sole cause and makes
k it necessary for Buyer to completely and totally shut dowry its Plant end
Buyer gives Seller written notice of the occurrence of such plant shutdown,
then if Seller fails to correct the quality problem within forty-eight (48)
hours of Seller's actual receipt of the aforesaid written notice and buyer's
I
Plant has remained completely and totally shutdown during such forty. eight
I I
(48) hour period, Buyer shall receive credit against the Demand Charge a
applicable to such Contract Year of the term hereof. Said credit shall be
determined as follows; the Demand Ch+irge applicable to auc;i Coutrect Year
shall be divided by the number of usya in such Contract Year and the
quotient shall be multiplied times the number of days during such Contract
Year that Buyer's Plant was so continually shutdown following the forty-
eight (48) hour period(s) described above.
I
11
I
I
i
it ,
ARTICLE VI
DELIVElT AND CONNICTIOit PACILITIES
1. Ilia point of delivery of bas to be sold and delivered by Seller to buyer
hereunder shall be at the outlet side of Seller's regulating and metering
i
stations on the sites of Buyer a Plant or which may hereafter be installed
by Seller at locations which are mutually acceptable to Buyer and Sa.ler.
Seller agrees that it will operate and maintain such regulating and metering
stations, as well as the necessary tap or lateral lines from its mein
{
pipeline system to said regulating and metering stations; and Buyer agrees
that it will furnish to Seller. without charge. Suitable apace at the point
i
of delivery for Seller's tap and lateral pipelines, regulating and metering
stations and appurtenant equipment, and that Buyer will maintain the
necessary service lines to connect with Seller's lines at the outlet side
of Seller's regulating and metering stations. Buyer shall authorize no
person other than an agent of Seller, or a person otherwise lawfully
authorized, to tamper with, inspect, alter or remove Seller's facilities,
Seller shall have free ingress and egress to and from Buyer's premises for
the construction, maintenance, repair and replacement of Seller's property
1 located thereon, or for an
y purpose connected with supplying gas hereunder.
2. Seller shall deliver gas hereunder to buyer at the point of delivery at
such reasonably steady pressures as may be designated by buyer, or absent
such designation, at pressures which are sufficient to enter Buyer's Plant
against the prevailing pressures maintained therein by buyer; provided,
however, Seller shall not be requf rod to deliver gas to buyer at a pressure
in excess of 75 prig.
~ 12
I
I
I
4
3. The title to and ownership of the gas delivered hereunder shall pass to
and absolutely vest in Luysr at the point of delivery herein provided. Each
of the parties hereto agrees to use reasonable efforts to promptly notify
the other party of any significant changes in operating conditions which
will affect the delivery and receipt of gas hereunder, and the reasons for
such significant changes. Notwithstanding anything contained herein to the
contrary, in no event shall Seller be required to install new facilities
or to enlarge or modify its existing facilities in order to make deliveries
of gas to buyer, except to the extent that such facilities are necessary
to deliver the Max[" Hourly Volume of gas hereunder.
4. Subject to the terms and provisions of this Contract, Seller and buyer
recognize and agree the point of delivery described in this Contract may
be a point at which Seller delivers gas for sale or transportation undr,r
other agreements with buyer or under other agreements with parties other
than buyer. It is understood and agreed by the parties that the Maximum
Hourly Volume and the Maximum Daily Volume set forth in Article 111,
parotgraph 1 is the cumulative maximum volume of gas which Seller Is
obligated to deliver at such point of delivery on any given Day, under (i)
this Contract, (!i) the Transportation Agreement herein described and (III)
any other delivery of gas to Buyer by Seller on behalf of a third party.
AZ?ICLZ VII
MZA D MNT
1. For the purpose of this Contract the volumetric unit of measurement of gas
shall be one thousand (1,000) cubic feet at a pressure base of fourteen and
sixty five ona-hundredths (14.65) pounds per square inch absolute and at
a tenperature bus of sixty degrees (606) Fahrenheit. Meter measurements
35
I
i
11
I~
s
shall be computed by Seller into such unite, adjusted for volume variations
due to pressure arid temperature in accordance with the Ideal Gas Iiv, and
I' corrected for deviation using daily averages of recorded specific gravity
` (determined to three (3) decimal plates) and a value for atmospheric
f pressure of fourteen and four tenths (14,4) pounds per square inch absolute.
2. The period during which gas is flowing shall be used in determining daily
averages of metered pressure, specific gravity, flowing temperature and
heating value,
3. The gas delivered hereunder shall be measured by means of measuring devices
of standard type with flange connections (installed in accordance with
current industry standards) which shall be operated and maintained by Seller
at its sole expense, and placed at the aforementioned point of dalivery, or
in as close proximity thereto as practicable. Rotors, and other measurement
i
instruments and equipment, shall be tested and adjusted for accuracy monthly
by Seller at Seller's expense,
4. Buyer shall have access to said asterinS equipment at all times, including
telemetry output signals as long as such access is at no coat to Seller,
j
but the maintenance, reading, calibration and adjustment thereof shall be
done only by the employees or agents of Seller. Records from such aistering
equipment shall remain the property of Seller and shall be kept on file by
Seller for a period of not less than three (3) years, However, upon request
of buyer, Seller shall make available to Buyer records from its motoring
} equipment, together with calculations therefrom, for Buyer's inspection and
verification, subject to return by Buyer within tan (10) days after receipt
thereof.
5. Buyer may, at its option and expels, install and operate meters,
14
I
I
9
I
instruments and equipment to check Sellar's meters, instruments and
equipment, but the measurement of gas for the purpose of this Contract
shall be by Seller's meters only, except as hereinafter specifically
provided. The meters, instruments and equipment installed by Buyer shall
i be subject at all reasonable times to inspection or examination of Seller,
but the maintenance, reading, calibration and aijustment thereof shall be
done only by Buyer.
6. Each party shall give to the other party notice of the time of all testa
of meters sufficiently in advance of such testa so that the other party
may conveniently have its representatives present; provided, however, that
if either party has given such notice to the other party and such other
party is not present at the time specified, than the party giving the notice
I
may proceed with the test as though the other party were present.
7. Motor measurements computed by Seller shall be deemed to be correct except
where the measuring device is found to be inaccurate by as much as one
percent (11), fast or slow, or to have failed to register, in either of
which cases Seller shall repair or replace the meter. 'Cho quantity of gas
delivered while the mater was inaccurate or failed to register shall be
determined first by the reading of Buyer's check meter, if installed and
in good operating condition, or second, by correcting the error if the
percentage of error is ascertainable by calibration or mathematical
calculation. If it is not so ascertainable then it shall be determined by
estimating the quantity on a basis of deliveries under similar conditions
when the meter was registaring accurately. Such adjustment or correction
shall be made only for one-half (1/2) of the period between the tut in
vhich the inaccuracy was discovered and the previous toot for accuracy;
15
I i
1
I
1 ~
i
r
provided, however, such adjustment or correction period shall not exceed
ninety (90) day,,,
8• The dally average hosting value and specific gravity of the gas delivered
hereunder, shall be determined at Seller's expense by the use of recording
devices of standard type, which shall be installed and operated by Seller.
Each device used to determine such average heating value and spoaiflc
gravity shall be tested for accuracy by Seller at regular monthly intervels
and should any test show it to be Inoperative or recording in error as much
as one-half of one percent (,051), plus or minus, proper correction shall
bs made for the period during which the recorder was inoperative or
recording In error, and if this period cannot be ascertained, correction 1
shall be made to an average of the values recorded during the most recent
fifteen (15) day period prior to the previous test tu%der similar conditions
of flow, and such device shall immediately be calibrated to measure as
accurately as practicable. The degree of saturation by water vapor of the
gas to be delivered hereunder shall be determined monthly by Seller, using
standard instruments and methods, and the results thereof shall be properly
taken into account in determining the hosting value of the gra delivered,
9. Seller will make available to Buyer, upon request, a compositional analysis
of gas delivered by Seller to buyer at the point of delivery hereunder.
ARTICU VIII
PRICS
1. The price payable by Buyer for the gas to be delivered hereunder shall be
determined for each Billing Month by increasing the so Price in effect
during such month, as set forth below in paragraph 1 of this Article VIII,
by an amount equal to the weighted average price per Mcf, as defined in
16
i
1
i
I
paragraph 3 of this Article VIII, for all gas purchased by Seller during
such Billing Month; provided, however, that the price payable by Buyer for
i
the gas to be delivered by Seller to buyer hereunder is subject to
' adjustment for variations in the Btu heat content of the gas in the manner
and to the extent set out in Article IX hereof.
2. The Base Price per Mcf for gas to be delivered hereunder shall be as
follows:
(a). For the Contract Year beginning January 1, 1989 and ending December
i
f
31, 1989, the Base Price per Mcf shall be (i) forty-two cents (42C)
for gas delivered and received hereunder during the Billing Months of
January, February, March, November and December and (ti) thirty-eight
cents (380 for the Billing Months of April through October.
(b). For each Contract Year beginning on or after January 1, 1990, both of
the aforesaid Base Prices shall escalate one cent (10) on January 1
of each such Contract Year.
3. The weighted average price of gas purchased by Seller hereunder shall be
determined as follows:
(a). The arm "weighted average price' of gas purchased by Seller shall
mean the weighted average price per one thousand (1,000) cubic feet
of all gas purchased by Seller during the Billing Month, computed to
the nearest one-hundradth of one cent ($.0001), and shall be
determined by dividing the total dollar amount paid or accrued on
Seller's books during such Billing Month for all gas purchased by
Seller by the total number of thousands of cubic feet of gas purchased
by Seller during such Billing Month, adjusted to the same pressure
base as gas sold hereunder, and shall include, in addition to the cost
17
E`
s
Of gas itself, all Class A Taxes, as hereinafter defined In Article
X hereof; provided, if any portion of the coat of gas (or if any Class
A Tax) which has been paid by Seller is refunded to Seller, or if
Seller is required by the terms of any gas purchase contract, or of
any agreed settlement of a disputed claim, or by a determination or
judgement of a regulatory body or court having or asserting
jurisdiction, to make retroactive payments with respect to gas which
has been or may be purchased by Seller, or if billing corrections are
made with respect to gas previously purchased by Seller, then such
I
payments, refunds, or corrections shall be included in Seller's
i
determination of the weighted average price of gas for the month
during which any such payments, refunds or corrections occur.
I~
(b). It Is recognised that some of the gas delivered by teller to Buyer
hereunder during any month of the term hereof may be gas previously
f purchased by Seller which is taken from one of its under ro=4 storage
reservoirs, but such gas shall not be considered in determining the
C weighted average price of gas purchased by Seller during such month;
provided, however, that gas placed in storage by Seller for later
I
delivery to Buyer or to other customers of Seller shall be accounted
for as gas purchased during the month in which it was actually
purchased by Seller.
4. If at any time following the execution of this Contract by the parties
r~ hereto, Seller's standard method of determining its weighted average price
as described In paragraph )(a) of A-ticle VIII hereunder is changed from
an Hof basis to an MBtu basis under Seller's standard industrial contracts
as described in the Schedule of Industrial Rates-N, State of Texas, or any
I' 16
l
i
I
I
ti
replacement schedule, Seller will notify Buyer of sueh change and
incorporate that change into the method of determining Buyer's weighted
average price.
ARTICLE IZ
ADJUST)ONT FOR KEATINO VALUE
If the weighted average heating value of the gas delivered by Seller to
Buyer during any month is less than one thousand (1,000) Btus par cubic foot,
the price payable by Buyer per Ncf of gas computed as provided in Article VIII
hereof shall be decreased one-tenth of one percent (0.11) for each Btu below one
thousand (1,000) Btus per cubic foot; and If the weighted average heating value
of the gas so delivered during any month to more than one thousand (1,000) Btu
per cubic foot, the price payable by Buyer per Ncf of gas as provided In Article
VIII hereof shall be increased one-tenth of one percent (0.11) for each Btu above
h one thousand (1,000) Btus per cubic foot for such gas to delivered during such
month.
ARTICLE I
i RXrXBURSMQNT FOR TAXIS 00 RIMALS
1. The term 'tax' or 'taxes', as used in this Contract, shall mean any kind
I or character of tax (other than ad valorem, cap',tal stock, general property,
Income or excess profits taxes), license, fee, rental or charge of any
governmental authority, including specifically, without limitation by
enumeration, any production, severance, gathering, transportation,
processing, compression, dedication, use, soles, delivery or gross receipts
tax, now or hereafter levied, assessed or made by any governmental authority
on the got itself or on the act, right or privilege of production,
severance, gathering, trarsportatton, processing, compression, dedication,
i
19
i
use, sale, handling or delivery of gas which is measured by gross receipts
i
or by the volume, value or sales price to Seller or Buyer of the gas in
question, but shall not include ary value attributable to the liquid
i
hydrocarbons in said gas; provided, however, that the tern 'tax" or "taxes"
shall not be deemed to include any general franchise tax imposed on
corporations on account of their corporate existence or on their right to
do business within the State of Texas as a foreign corporation.
/ 2. The terms 'Class A Taxes 'Chas B Taxes" and "Class C Taxes' as used in
this Contract shall have the following meanings, to wit:
(a)• The term "Class A Taxes" shall be construed to mean all taxes, as
i
herein defined, which Seller pays for the account of or by way of
reimbursement to its gas suppliers with respect to all gas purchased
by Seller.
(b). The term 'Class B Tsx:W shall be construed to mean all taxes, as
herein defined, which are or may be levied upon, and/or paid by
Seller, with respect to the gas sold by Seller to buyer hereunder,
exclusive of any Class A Taxes or Class C Tuxes,
(c)• The term 'Class C Taxies shall be construed to mean any license, fee,
rental or charge which is or may be levied or imposed upon by, and/or
paid by Seller to, any governmental authority for the use of its
public streets, alleys and thoroughfares in the conduct of Seller's
business, with respect to the gas sold by Seller to Buyer hereunder
and/or the gross receipts received by Seller from the sale of gas to
Buyer hereunder, or any sales or delivery tax which is or may be
i levied or imposed upon, and/or paid by Seller, with respect to the gas
sold by Seller to Buyer hereunder and/or the gross receipts received
20
i
I
i
1
6
by Seller from the sale of Sea to Buyer hereunder, exclusive of any
Class A Taxes or Class B Taxes.
3. Buyer agrees to reimburse Seller with respect to all Class B Taxes and
Class C Taxes, as herein defined, which are paid by Seller with respect to
that gas sold by Seller to buyer hereunder, including any amounts dkje for
Demand charges billed hereunder.
4. It is understood and agreed that the amount of reimbursement for all
existing, new, increased, or additional Class B Taxes and/or Class C Taxes
shall be determined by applying the rate of any such tax measured by gross
receipts, units of volume, value or sales price, to Seller's gross receipts
hereunder or to the volume, value or sales price respectively, of the gas
delivered hereunder; provided, that in the a •ent such taxes cannot be
directly related to the gas delivered hereunder or the gross receipts
received by Seller, as hersinabove provided, the amount of reimbursement
to Seller shall be in the same proportion to the volume of gas sold
hereunder as the total amount of such taxes is to the total volume of gas
sold by Seller to all its customers.
j
S. It is understood and agrood that in the event any tax, charge or rental
i
Jj for which Seller has been retmburs6d or paid by Buyer hereunder is
subsequently declared unlawful, Salter, upon recovery of tho asourt of such
unlawful tax, charge or rental, shall refund to Buyer the entire amount of
such reimbursement or payment made by Buyer to Seller which is recovered
by Seller; provided, however, that Seller shall not be requited to make a
refund to Buyer with respect to any tax, charge or rental so recovered after
this Contract has terminated unless Seller has recovered such tax, charge
or rental prior to such tbrmtnation, 1
2!
I
i
I
t
6. Any amounts due from Buyer to Seller as reimbursement for taxes, charges
or rentals, in accordance with the provisions of this Article X, shall be
paid by Buyer to Sutler at the time and in the manner that invoices for gas
delivered hereunder are payable, as provided in Article XI hereof.
ART'ICLi It
I
PAYMENT
1. For the purpose of billing and accounting for gas delivered hereunder, the
~f terms 'Day, 'Billinf Month', and 'Contract Year' shall be s defined in
Article I hereof.
2. On approximately the tenth (10th) Day of each calendar month. Seller shall
render to Buyer at its office in Denton, Texas, statements of the amount
i~ of gas delivered by Seller to Buyer at the point of delivery during the
preceding Billing Month, and shall also render an invoice for the gas sold
i
hereunder and an allocation statement for all the gas so delivered, in
computing such invoice for gas sold hereunder by Seller to Buyer during any
Billing Month, the weighted average price of gas purchased by Seller during
such Billing Month, as datecoined in accordance with paragraph 1 of Article
V11I, shall be used, buyer shall make payment to Seller at Seller's office
j in Dallas, Texas for all gas delivered hereunder to Buyer during the
preceding Billing Month by no later than twelve (12) days from the date
Seller's statement is deposited postage prepaid in the United States mail
or in case of hand delivery, within ten (10) days from the date Seller's
statement is delivered to a representative of Buyer from a representative
of Seller,
T, It buyer should fail to pay any amount owing to Sellcc when the same is
due, interest thereon shall accrue at the rate of eighteen percent (161)
I
22
i
I
I
per annum from the date when such amount is due until same is paid;
provided, however, no interest shall accrue on unpaid amounts when failure
to make payment is the result of a bona fide dispute between the parties
hereto regarding such amounts and `uyer timely pays all amounts not in
dispute. If such failure to pay :ontinues for sixty (60) days, Seller may,
in the absence of any bona fide dispute as to the amount or the time when
same was due, suspend deliveries of gas hereunder, and the exercise of such
right shall be in addition to any and all other remedies available to
Seller; provided, however Seller shall be entitled to suspend deliveries
of gas hereunder in the event Buyer fails to pay any and all amounts not
in dispute,
4. Each party sh.,-11 have the right at reasonable hours to examine the books
and records of the other party to the extent necessary to verify the
accuracy of any statement, payment, calculation or dettmination made
pursuant to the provisions hereof. If any such examination shall. reveal,
or if either party shall discover, any error or inaccuracy in its own or
the other party's statements, payments, calculations or determinations, .hen
proper adjustments and corrections shall be made as promptly as practicable
' thereafter; provided, however, that no adjustment or correction shall be
made with respect to any error or inac:uracy which occurred more than two
(2) years prior to the discovery thereof.
5. All notices, billings, and payments provided for herein shall be in writing
and shall be deemed to be delivered (except for when actual receipt of
notice is expressly required herein) when properly addressed to the other
party as indicated belo►r, and deposited in the United States sail, postage
prepaid.
F 23
I
i i
II i
I
i ;
r-
i
SELLER: BUYER:
Psyment4 Lone Star Gas Company City of Denton, Texas
301 South Harwood Street Municipal Building
Dallas, Texas 75201 Denton, Texas 76701
Attn: Utility Related Attn: Executive Director
Credit Group of Utilities
Notices: Lone Star Gas Company
301 South Harwood Street
Dallas, Texas 75201
Attn: Gas Marketing Division
ARTICLE III
TIRX
Subject to the other terms and provisions hereof, this Contract shall
be effective from the data set forth hereinabove and shall thereafter continue
and remain In full force and effect for a period and tern extending to twelve
(12:00) o'clock midnight on December 31, 1993 and year to year thereafter until
cancelled by either party upon one hundred and twenty (120) days prior written
notice to the other party.
ARTICLE IIII
tORCE MAJIM
1. In the event of either party hereto being tendered unable, wholly or In
part, by force majeure to carry out its obligations under this Contract,
other than to make payments due hereunder, it is agreed that on such party
giving notice and full particulars of such force majeurs in writing to the
other party to soon as posnible after the occurrence of the cause relied
on, thon the obligations of the party giving such notice, so far as they
are affected by such force msjeura, shall be suspended from the inception
and during the continuance of any inability so caused but for no longer
s
24
i
I
I
k
t
period, and such cause shall be as far as possible remedied with all
reasonable dispatch. The term •force majeura• as employed herein shall mean
acts of Cod, strikes, lockouts or other industrial disturbances, acts of
the public enemy, wars, blockades, insurrections, riots, epidemics,
landslides, lightning, earthquakes, fires, storms, floods, washouts,
arrests, orders, directives, requirements and restraints of governments and
governmental agencies, either federal or state, civil and military, any
application of governmental conservation rules and regulations, civil
disturbances, explosions, breakage or accident to machinery or lines of
pipe, the necessity for making repairs to or alternations of machinery,
equipment or lines of pipe, breakage of transmission lines, failure of
electric equipment due to sleet, ice or other unavoidable causes, accidents
to or failure of electric substations, transformers or switching devices,
shortage of water, freezing of gas walls or lines of pipe, partial or entire
failure or loss of wells and/or sources of gas supply, and any other ca;ies,
whether of the kind herein enumerated or otherwise, not within the control
I
of the party claiming suspension and which by the exercise of due diligence
such party is unable to prevent or overcome. Such term shall also include
the inability to acquire, or the delays In acquiring, at reasonable cost
and after the exercise of reasonable diligence, any servitudes, right of
way grants, permits or licenses required t-P be obtained to enable a party
to fulfill Its obligation hereunder.
2. It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the discretion of the party have the difficulty,
and that the above requirements that any force "Joure shall be remedied
with all reasonable dispatch shall not require the settlement of strikes
25
I
I
I
or lockouts by acceding to the demands Of opposing party when such course
i is inadvisabli in the discretion of the party having the difficulty.
AR?ICL1 XIV
CURTAILIQ,N'I Of DELIVUILg
Seller does not guarantee a continuous, uninterrupted supply of gas to
1
Buyer hereunder and, subject to the provisirns hereinafter sat forth in
this Article XIV, Seller shall have the right to interrupt or curtail the
supply of gas to Buyer, in whole or in part, if in the judgment of Seller
a continuance of the supply of gas to Buyer under this :o
ntract would
jeopardize or threaten service to Seller's domestic, commercial or
industrial customers who are accorded a higher priority of service by the
Railroad Commission of Texas. Notwithstanding anything to the contrary
contained herein, refusal or inability by Seller to supply gas to Buyer in
excess of Seller's obligations provided for in Article III herein shall not
constitute a curtailment of the supply of gas to Buyer hereunder for
purposes of paragraph 4 of this Article XIV.
2. Buyer and Seller recognize the fact that each is engaged In rendering a
service which is essential to the public health and safety and both consider
the continuity of Buyer's ^ul supply essential to the public welfare;
/i therefore Seller agrees to exercise due diligence in making reasonable
advance preparations to enable it to provide reasonably continuous service
to Buyer, and Buyer agrees that It will provide an adequate quantity of
standby fuel and equipment to meet its fuel requirements during periods when
the gas supply hereunder may be curtailed pursuant to this Article XIV.
3. Within approximately ten (10) days after the and of any curtailment of gas
deliveries by Seller, Buyer shall notify Seller In writing regarding the
1b
I
I
i
f~
l
F
amount of gas which was actually curtailed for any reason, including force
majeure, and the details of the computation of such amount, and Buyer's
determination of the amount of such curtailment shall become final and
binding on both parties unless protested in writing by Seller within ten
(10) days after receipt by Seller of such notification.
4. Notwithstanding anything to the contrary contained herein (except for the
provisions of paragraph 1 of this Article XIV), in case of interruption or
curtailment of service, as provided for in this Article XIV, including
curtailment by reason of force majeure as defined In Article XIII hereof,
the amount of gas which was actually curtailed during any Contract Year
shall be added to the amount of gas actually purchased and received by Buyer
during such Contract Year for the purpose of determining Buyer's credits
against the Demand Charge applicable to such Contract Year, as calculated
in accordance with the provisions of Article IV, paragraph 4(a) of this
I
Contract; provided, however, only gas curtailed under this Contract shall
receive credit against the Demand Charge for any Contract Year of the term
i hereof.
Ij S. Buyer and Seller recognize the fact that Buyer requires one million
I{ (1,000,000) cubic feet of gas each day for plant protection gas, and Buyer 1
i
and Seller agree that during periods of curtailment buyer shall be allowed
to take one million (1,000,000) cubic feet per day for plant protection gam;
provided, however, that Buyer shall not be allowed to take such gam during
periods of time in which it is necessary for Seller to curtail the supply
of ges to other industrial customers of Seller in the same curtailment zone
in which buyer's Plant is located who are accorded by Seller a priority of
I
service equal to that provided in Railroad Comission of Texas Gas Utilities
27
I ~
I
i
I
I
I
Docket No. 496 for service to •(2). large co®ercial (100 Ncf or more on
a peak day) and industrial requirements for pilot lights and plant
protection gas" under category 'b. Industrial Rate 1.0
AATICIa XV
RZOVIJITORT BODIES
1. This Contract and all operations hereunder are subject to the applicable
federal and state laws and the applicable ordinances, orders, rules and
regulations of any local, state or federal governmental authority having
or asserting jurisdiction; but nothing contained herein shell be construed
as a waiver of any right to question or contest any such law, ordinance,
order, rule or regulation in any forum having jurisdiction over sane.
2. In the event either Buyer or Seller shall be required by a judgment or
order of any governmental authority having or asserting jurisdiction to
either pay or charge prices for gas sold by Seller to Buyer hereunder which
are . gher or lower than the prices stipulated or provided for heroin with
respect to gas sold by Seller to Buyer hereunder, the party adversely
affected shall have the option of cancelling this Contract upon giving the
other party vritten notice of its intention to do to within ninety (90) days
j after the date of such judgment or order, which cancellation shall become j
i
effective at the end of six (6) months from and after the data of such
notice.
ARMIX ZVI
TUMINATION PRIVIIZGK
1. If either party hereto shall fail to perform any of the covenants or
obligations imposed upon it under and by virtue of this Contract (except
where such failure shall be excused under any of the provisions of this
I
28
I
i
i
i
r
Contract), then in such event the other party may, at its option, terminate
this Contract by proceeding as follows: The party not in default shall
cause a written notice to be served upon the party in default, stating
specifically the cause for terminating this Contract and declaring it to
be the intention of the party giving the notice to terminate the same:
whereupon, the party in default shall have thirty (30) days after the actual
receipt of this aforesaid notice in which to remedy or remove the cause or
causes of default stated in the notice of termination, and if within said
period of thirty (30) days the party in default does so remedy and remove
said cause or causes then such notice shall be nullified and this Contract
shall continue in full force and affect. In case the party In default does
not so remedy and remove the cause or causes of default within said period
of thirty (30) days then this Contract shall terminate and become null and
void upon the expiration of said period.
2. Should Buyer obtain frog any c.,urt, administrative or regulatory authority
an order directing Seller to continue gas service after expiration of this
Contract, or after Seller's termination of this Contract or gas service
hereunder pursuant to any provision contained herein, such continued gas
t service shall be at a price and upon terms mutually agreeable between Buyer
and Seller unless said order contains a specific prohibition to the
contrary. II
3. Any cancellation of this Contract pursuant to the provisions of this Article {
%VI shall be without prejudice to the right of the party not in default to
i
collect any amounts than due it and without waiver of any other remedy to
which the party not in default may be entitled for violation of this
I
Contract. ~
i
I, 29
I
I
1
Ly
4 VS _I
I
ARTICLE IvII
i
INTRASTATE PROVIsroNs
Each party warrants to the other that its facilities utilized for the delivery
and acceptance of gas hereunder are wholly intrastate facilities and are not
subject to the Natural Cas Act of 1938, as amended. As a material
i
representation, without which both parties would not have been Willing to execute
this Contract, each party warrants to the other party that it will take no action
or commit an act of omission which will subject its facilities, this transaction,
or the other
party's facilities to jurisdiction of the Federal Energy Regulatory
1
Commission (FERC) or its successor governmental agency under the terns of the
Natural Gas Act of 1938, as amended. The gas delivered and accepted hereunder
shall not have been nor shall be sc3d, transported or otherwise utilized in
Interstate commerce in a manner which will subject either party to the terms of
the Natural Cam Act of 1938, as amended. In addition 11
to and without excluding
any remedy the aggrieved party may have at law or In equity, the party who ~I
breached the above warranties and representations shall ba liable to the
aggrieved party for all damages, lujury and reasonable expense the a&urfeved
{
j party may sustain by reason of any breach hereof, further, should either party
j ~
i perform any act, or cause any act to be performed, at any time, that results in
t
any gas covered hereunder becoming regulated by or subject to the jurisdiction
of the FERC or successor governmental authority under the Natural Cam Act of
1938, rhis Contract shall be deemed of its own terms to terminate on the Day
before the date of such occurrence; provided, however, such termination shall
never be construed to impair any right arising wider this paragraph,
30
III
I
I I
I
I
f
4
I
ARTICLE =VIII
WARRANTY
Seller hereby wartants to Buyer that at the time of delivery of gas hereunder
l it will have good title or the right to deliver such gas, and that such gas will
be free and clear of all liens and adverse claims; and Seller agrees with respect
to the gas delivered by it, to indemnify buyer against all suits, actions, debts,
accounts, damages, costs (including attorneys' fees), losses and expenses arising
from or out of any adverse claims, relating to Seller's title, of any and all
persons to or against said gas.
I
ARTICLE III
i
RIGHT-CF-WAY
Buyer hereby grants to Seller the right to lay and maintain pipelines and to
install metering stations and other necessary equipment at the point of delivery,
as provided for in Article V hereof, sololy for the purpose of supplying gas
J hereunder, and such lines and other equipment placed by Seller at +aid point of
delivery shall remain the personal property of Seller, and, subject to the terns
of this Contract, may be removed by Seller at any tine.
E ARTICLE ZI
INDEMITY
As between the parties hereto, Seller shall be in control and in possession of
gas delivered hereunder and responsible for any damages or injuries caused
r thereby until the same sbali have been delivered to Buyer at the point of
delivery and shall indemnify and hold Buyer harmless from any damage or injury
caused thereby while same is in Seller's possession, except injuries and damages
which shall be occasioned proximately by the negligence of buyer. After such
delivery of gas at the point of delivers hereunder, Buyer shall be deemed to be
]1
f
I
I
i
i
in exclusive control and possession thereof and responsible for any injuries or
damages caused thereby, and shall indemnify and hold Seller harmless from any
damage or injury caused thereby while sane is in Buyer's control and possession,
except injuries and damages which shall be occasioned proximately by the
negligence of Seller.
ARTICLE =II
WAIVER or BREACH
No waiver of either party hereto of any one or more breaches, defaults or
right(s) under any provisions of this Contract shall operate or be construed as
a waiver (continuing or otherwise) of any other breaches, defaults or right(s),
whether of a like or of a different character.
ARTICLE BYIr
ASSICNlLENT
this Contract shall be binding upon the parties hereto and their respective
I
successors and assigns. All or any part of the rights or obligations of either
party hereto may be at any time assigned, but any such sasignment, unless
accepted in writing by the other party hereto, shall not relieve the assignor
of its obligations hereunder, in the event the assignee shall fail to perform
the same in accordance with the terms hereto; provided, however, consent to such
assignment would not be unreasonably withheld.
ARTICLE E;III
XISCELLANZOUS
1. The captions or headings preceding the various parts of this Contract are
inserted and included solely for convenience and shall never be considered
of given any effect in construing this Contract or any part of this
Contract, or in connection with the intent, duties, obligations or
I
M 32
I
I
I
Il
„ r..,
F4 A
liabilities of tre respective parties hereto.
2. Buyer and Seller agree that this Contract will be construed according to
the laws of the State of Texai.
3. This Contract conscitutes the entire agreement between the parties covering
the subject matter hereof, and there are no agreements, modifications,
,.onditions or understandings, written or oral, expressed or implied,
pertaining to the subject matter hereof which are not referenced or
contained herein.
4. Nothing contained in this Contract shall prevent Seller from li) terminating
or allowing the termination or expiration of any of its existing or future
gas supply contracts, or (ii) entering into any amendment, modification,
rer,sral, extension or replacement of, or any accord and satisfaction under,
any existing or future gas purchase contract or contracts between Seller
and its gas suppliers.
I
j IN WITNESS 'WHEREOF, this Contract has been executed in duplicate
originals by the parties hereto on the day and year first herein written.
{ ATTEST: SELLER:
LANE STAR CAS COMPANY,
a Division of ENSERCH CORPORATION
J By:
J. R. Moore
Vice President
ATTEST: BUYER:
CITY OF DENTON, TEXAS
By:
33
I
e
S
F
K
z
THE STATE OF TEXAS(
COUNTY OF DALLAS (
BEFORE ME, the uz.dersigned authority on this day personally appeared J,
R. Moore, Vice ?resident of LANE STAR CAS COMPANY, a division of ENSEACH
CORPORATION, a Texas corporation, known to me to be the person and officer whose
name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in the
capacity stated, and as the act and dead of said corporati^n.
Given under my hand and seal of office this + day of
19,~
I
Notary Public in and for the State
of Texas, My commission expires
i
THE STATE OF TEXAS(
j COUNTY OF DALLAS
BEFORE ME, the l.-idersigned authority on this day personally appeared
a municipal
corporation, kn:vn Lc. --k to be the person and officer whose name is subscribed
to the foregoing instrument and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, in the capacity stated, and
f as the act and deed of said corporation.
Given under my hand and seal of office this day of
19~.
Notary Public In and for the State
of Texas. My commission expires
i
34
I
i
I
f
t
LS•T•MC•s
CAS TRANSPORTATION AGREEMENT
THIS AGREEMENT, made and entered into the 1st day of January, 1989 to he
effective with the date of initial deliveries hereunder, by and between LANE
STAR CAS COMPANY, a Division of ENSERCH Corporation, a Texas corporation,
hereinafter referred to as "Transporter' and CITY OF DENTON, a municipal
corporation, hereinafter referred to as "Shipper
YITNEBSETt1~
WHEREAS, Shipper owns or controls certain quantities of natural gas and
desires that Transporter (a) receive gas from Shipper (or its designee) at the
I
Point(s) of Receipt hereinafter set forth and (b) deliver equivalent
quantities of gas to the Point of Delivery hereinafter set forth; and
t WHEREAS, Transporter owns and operates a pipeline system and is willing to
i
transport gas for Shipper under the terms and conditions hereinafter set forth;
I'I NOW, THEREFORE, for and in consideration of the mutual covenants and
i
conditions herein contained, Transporter and Shipper hereby agree as follows:
i
ARTICLE I.
QUANTITY
1.1 Shipper represents that from time to time it may desire for
Transporter to receive and deliver gas at the points hereinafter eat forth in
quantities as agreed to by the parties. It is agreed that the volume of gas to
be transported under this Agreement will not exceed a daily volume of twenty.
five thousand (25,000) Mcf unless mutually agreed to by the parties hereto,
Transporter's obligation to deliver Sea to Shipper under any and all agreements
between Transporter and Shipper, including but not limited to this Agreement,
shall not exceed a daily volume of thirty thousand (30,000) Mcf. It is further
1 ~ 1
{
I
{
l
hereby agreed that the calculation of all quantities of gas received and
delivered hereunder shall, for all purposes, including, but not limited to,
payrient and determination of imbalance and retention volumes, be on an KMZtu
basis. Transporter's receipt and delivery of such gas transportation volumes
will be G,nr. .n a best efforts basis subject to Transporter's exiat;ng or
future pipeline capacity, system transmissibility and operating capabilities;
and Transporter may refuse to transport gas hereunder if in the reasonable
opinion of Transporter to do so would adversely affect Transporter's sales
service to residential and commercial customers and other priorities of sales
service esrablished by the Railroad Commission of Texas, or any successor
thereto. Transporter will in good faith endeavor to receive ■nd deliver such
gas and will not arbitrarily and capriciously refuse to transport gas on behalf
of Shipper hereunder.
1.2 It is recognized that a day-to-day balance of gas received by
i
I~ Transporter and delivered to Shipper may not be possible due to the inability
of the parties to control precisely such receipts or deliveries. However,
i Transporter, to the extent practicable, will deliver to Shipper each day a
i
quantity of gas squivelent to ninety nine percent (991) of the quantity of gas
received by Transporter from Shipper (or its designee). Transporter shall
retain the one percent (11) balance of the quantity of gas received as normal
gas lost, gas used as fuel and gas used in day-to-day pipeline operations (the
"Retention Volume'). An imbalance shall exist hereunder where theca is a
numerical difference between the quantity of gas delivered by Transporter to
i Shipper; exclusive of (i) the total of the volumes of gas delivered under the
Gas Sales Contract between Transporter and Shipper dated January 1, 1939,
(hereinafter referred to as the "Gas Sales Contract') (ti) the total of any
volumes of gas delivered by Transporter to Shipper at the roint of Delivery
i
2
1 j
room"
specified herein, under transportation agreements between Transporter and other
third parties, and (iii) the Retention Volume; and the quantity of gas received
by Transporter from Shipper (or its designee) during any month, and any such
imbalance shall be corrected insofar as practicable during the month following
the month in which it occurs; provided, however, should Shipper fail, by the
i
end of any month of the term hereof to make up a prior month's imbalance due
Transporter, the cumulative imbalance, as hereinafter defined, owed Transporter
by Shipper shall be deemed to be sold to Shipper by Transporter in accordance
with the terms and conditions of the Gas Sales Contract during the most recent
Billing Month, and thereafter such cumulative imbalance shall be accounted for
and construed for all purposes as gas sold under the Gas Sales Contract. For
the purposes of this paragraph, the term "cumulative imbalance" shall mean the
sum of (i) any imbalance due Transporter and carried forvatd from an
immediately precedinb month to the next succeeding month, plus (Si) any
imbalance due Transporter based on the delivery and receipt of gas hereunder
during such succeeding month.
1,7 At least two (Y) working days prior to the first calendar day of each
month durir.F the term hereof, Shipper and/or its des.gnes shall notify
Transporter of the volumes of gas Shipper nominates for transportation at each
active Receipt and Delivery Point under this Agreement. each such
transportation nomination shall contain Shipper's nominated mnxtmvn quantities
for each appltcable Receipt and Delivery Point, designation of V%s appropriate
contract(s) covering such gas, and the identity by name and tals;hone number of
individual(s) who have authority to confirm the nominated gas volumes at each
Receipt and Delivery Point. Timely nominations may be given by verbal notice;
provided, however. Shipper shall furnish written confirmation thereof within
five (S) business days of the date of such verbal notice. Shipper and/or its
1
h
f
designee may revise nominated quantities on any business day upon verbal
notice of any such reduction of nominated quantities. Such verbal notice must
be received by Transporter prior to 12:00 noon Dallas time of any business day
to be effective the next succeeding business day. If Shipper and/or its
designee does not furnish transportation nominations as required herein for
any month during the term hereof, Transporter may interrupt transportation
service hereunder for such month and such interruption of seriica shall not
prevent enforcement by Transporter of any other of its legal rights or remedies
nor be construed as a breach of Transporter's obligations hereunder. If
Shipper and/or its designee does not nominato any transportation volumes as
foresaid for twelve (12) consecutive months during the term hereof,
Transporter, upon thirty (30) days' prior written notice to Shipper, may
terminate this Agreement and all rights and obligations hereunder; provided,
however, the obligation to make payment for monies duo hereunder shall not be
extinguished. Shipper shall be entitled to assign any or all such nomination
obligation(s) to a third-party ("Shipper's designee') upon thirty (30) days
prior written notice to Transporter.
ARTICLE 11,
i
LOCATIONS OF POINTS OF RECEIPT AND DELIVERY
2.1 Receipt Point: Gas delivered by Shipper (or its designee) to
Transporter hereunder shall be delivered at points which are sometimes herein
referred to as the 'Receipt Point(s)" or "Point(a) of Receipt' and which are
} specifically set forth and identified in Exhibit "A", entitled "Transporter
Receipt Point(s)", which is attached hereto and is hereby incorporated in this
Agreement and made a part hereof for all purposes. It is agreed that
additional points to be established hereunder, pursuant to paragraph 2.3, will
be subject to Transporter's approval which shall not be unreasonably withheld.
4
{
i
I
f
Y
2.2 Delivery Point: Gas transported by Transporter hereunder shall be
delivered to Shipper (or for its account) where gas first passes from
Transporter's metering equipment into Shipper's Spencer Steam Electric Station
in Denton, Texas (sometimes herein referred to as "Point of Delivery') or other
points as provided in the Transfer of Cis Agreement betweer, Transporter and
i
Shipper dated May 1, 1969.
2.3 Additional Points: It is understood by both parties that Shipper and
Transporter may mutually agree in writing to establish other Receipt Points
i
hereunder; provided, however, Transporter shall not be obligated to establish
new Receipt Points more frequently than once every two (2) months, unless due
to circumstances beyond Shipper's control Shipper (or its designee) is unable
I
i
to supply gas to the original Receipt Point(s) hereunder. In such event, and
upon receipt by Transporter of documentation satisfactory to Transporter
verifying such event and Shipper's inability to remedy same, Transporter may,
in its sole discretion, agree to establish an additional Receipt Point, In the
event Shipper desires that Transporter receive gas at a proposed point(s),
j Shipper shall notify Transporter in writing of such proposed point(s),
! 1
~ Including in such notice estimated maximum dally delivery volume(s) at such 1
point(s) and the location(s) thereof and Shipper shall therein warrant that the
quality of gas to be received at such proposed point(s) meets the quality !
specifications as defined herein and that such gas and such ;,ropoaed point(s)
meet the requirements of Article YI, paragraph 2 of this Agreament and all
other applicable terms and conditions contained in this Agreement, Transporter
will promptly evaluate each point and if such Receipt Point(s) is an
established Receipt Point on Transporter's pipeline system, will notify Shipper
within ten (10) working days of Transporters receipt of Shipper's notice,
unless otherwise mutually agreed to by the parties hereto, whether or not
s
I
i ~
i
i
I '
t
P
14~
I "
Transporter is able to accept gas from Shipper's proposed new Receipt Point(s).
If such Receipt Point(s) is not an established Receipt Point(s) on
Transporter's pipeline system, Transporter will notify Shipper within thirty
(30) days of Transporter's receipt of Shipper's notice, unless otherwise
mutually agreed to by the parties hereto, whether or not Transporter is able to
accept gas from Shipper's proposed new Receipt Point(s). In the event
Transporter anticipates the inability to complete said evaluation :ithin the
i
specified tort (10) and/or thirty (30) day periods, Transporter will promptly
notify Shipper and provide the status of and estimated completion date of the
required evaluation
provided, however, no additional Receipt Point(s) will be
established hereunder without prior written agreement between Shipper and
Transporter, Upon Transporter's agreement to establish any additional Receipt
Point(s) pursuant hereto, Exhibit "A" shall be revised to reflect the
I
additional Receipt Point(s).
if
{ ARTICLE 111.
PRES.SU ES Al POINTS OF RECEIPT M D lI=
3.1 Shipper and/or its designee shall deliver gas to Transporter at the
I
Receipt Point(s) at pressures sufficient to enter Transporter's pipeline system
t
at such point; provided, however, that Shipper's delivery pressure Into
Transporter's system at the Receipt Point(s) shall not exceed Transporter's
maximum allowable operating pressure at any such point. 1
3.2 Transporter shall deliver gas to Shipper at Transporter's operating l
f 1
pressure at the Delivery Point; provided, however. Transporter shall not be
obligated to delivery gas at a pressure In excess of seventy flue (75) psi ~
6 I
Into Shipper's Spencer Steam Electric Station in Denton, Texas.
i b
i
I
I
i
f
I`
I
r
ARTICLE IV
RATES
` 4.1 Shipper shall pay Transporter for services rendered hereunder at the
rates set forth below commencing with initial deliveries of gas hereunder.
(a) If during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average •olume of gas less than five thousand (5,000)
f
Mcf per day during such Billing Month, the fee charged hereunder shall be
twenty cents (20C) for each MMBtu delivered hereunder at the Delivery
w
Point, after allowing one portent (11) reduction in such delivered
volumes for gas lost and unaccounted for, gas used as fuel, and gas used
in day to day pipeline operations pursuant to Article I, paragraph 1.2.
(b) If during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average volume of gas greater than or equal to five
thousand (5,000) Mcf per day, the fee charged hereunder shall be fifteen
i
cents (ISC) for each MMBtu delivered hereunder at the Delivery Point,
after allowing one percent (11) reduction in such delivered volumes for
gas lost and unaccounted for, gas used as fuel, and gas used in day to day
I pipeline operations pursuant to Article I, persgttph 1.2,
(c) It is agreed by the parties hereto that the fees charged in
peragrsphs (a) and (b) above shall escalate one cent (10) per MMBtu
beginning or. January 1, 1990, and annually thereafter during the term of
this Agreement.
(d) It is understood and agreed by the parties that the rates provided
for herein have been reached through arms length nagotiations and that
neither party had an unfair advantage during the negotiations thereof.
Mowevar, should the appropriate regulatory agcnoy find such rates to be
unreasonable for any reason or in any way in violation of any provision of
' I
7
I
I
law, and determine a rate lover than that provided for herein, Transporter
may terminate this Agreement upon giving Shipper written notice of its
intention to do so within sixty (60) days after the date of such judgement
or order, which cancellation shall become effective at the and of thirty
(30) days from and after the date of such notice. Should the agency
determine a rate higher than that provided for herein, Shipper may
terminate this Agreement upon giving Transporter written notice of I:.
Intention to do so within sixty (60) days after the data of such judgement
or order, which cancellation shall become effective at the end of thirty
(30) days from and after the date of such notice.
f (e) Shipper agrees to reimburse Transporter for any Taxes as defined in
Section 5 of GENERAL TERMS AND CONDITIONS attached hersto as APPENDIX W.
ARTICLE V.
I T.F,B)1
5.1 This Agreement is effective as of January 1, 1989, and shall remain
in full force and effect for a primary term extending through December 31,
i
1993, subject to the terms and provisions hereof, and month to month thereafter
until cancelled by either party giving the other party thirty (30) da a' prior
written notice. Notwithstanding anything contained herein to the contrary, in
the event of termination or cancellation of the Gas Sales Contract,
Transporter shall have the right, to terminate this Agreement 1,y giving Shipper
l } one hundred (100) days notice of such termination. Notwithstanding the al-)vs,
if an imbalance in deliveries exists on the data of termination hereof between
the quantities theretofore delivered at the Receipt Point(s) and Delivery
Point, the term of this Agreement shall be extended for a period sufficient to
allow the party whose deliveries are in arrears to eliminate promptly any
deficit. Provided further, any termination, cancellation of expiration of this
8
I
1
iI
I
Agreement shall never operate to extinguish the obligation to make payoent for
monies due hereunder.
5.2 In the event that on or before January 1, 1990, deliveries of gas for
transportation hereunder have not commenced, then in such event and
thereafter, until such deliveries are tendered and accepted, Transporter may
cancel this Agreement by Elving Shipper thirty (30) days' prior written notice
of such cancellation.
ARTICLE VI.
lA1JS ENO R ~TIONS
6.1 Thts Agreement shall be subject to all applicable State and Federal
laws, and orders, directives, rules and regulations of any governmental body,
official or agency h,ving jurisdiction.
6.2 Each }arty warrants to the other that its or its agent's facilities
utilized for the ddlivery and acceptance of gas hereunder are wholly intrastate
facilities and are not subject to the Natural Gas Act of 1938, as heretofore
amended. As a material representation, without which both parties would not
have been willing to execute this Agreement, each party warrants to the other
party that it will take no action nor commit any act of oaisston which will
subject its facilities, this transaction or the other party's facilities, to
I '
jurisdiction of the Federal Energy Regulatory Commission or its successor
governmental agency under the terms of the Natural Gas Act of 1938, as amended.
The gas delivered and accepted hereunder shall not have bean nor shall be sold,
transported, or otherwise uttlized in interstate commerce in a manner which
will subject either party to the terms of the Natural Gas Act of 1938, as
amended. In addition to and without excluding any remedy the aggrievac party
f may have at Inv or In equity, the party who breaches the above warranties and
representations shall be liable to the aggrieved party for all damages, injury
9
j I
4
and reasonable expense the aggrieved party may sustain by rea.von of any breach
hereof. Further, should either party perform any act, or coi,ss any action to
be performv., at any time, that results in any gas covered anraundsr becoming
regulated by or subject to the jurisdictional consequences of the Nitural Cas
Act of 1938, as amended, or successor governmental authority contrary to this
agreement, this agreement shall be deemed of its own terms to terminate on the
day before the date of such occurrence; provided, however, such terminatio..
shall never be construed to impair any right under this paragraph.
ARTICLE %'I1.
GENERAL TERNS AND CONDITIONS
7.1 The GENERAL TERNS AND CONDITIONS attached hereto as APP&NDIX W are
incorporated herein and made a part hereof by this referen's.
1
ARTICLE VIII. 1
~ MISCELLAN_EOUS
8.1 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not Lie tran•fairad or assigned by siths. party
j without the prior written consent of the other party, which shall not be
f
unreasonably withhold, Any purported transfer or assignment without such
consent shall be null and void and shall not overate to relot.i the transferror
or assignor from its obligations hereunder.
8.2 Any notice, rcnuest, demand, statement or payment provided for in
this Agreement may be given in writing directed to the party to whom given and
mailed or delivered at such party's address as follows:
City of Denton
Municipal Building
Denton, Texas 76701
Attn: Executive Director of Utilities
I
10
i
i
(Notices) (Payments)
Lone Star Gas Company Lone Star Gas Company
301 S, Harwood Street 301 S. Ha mood Street
Dallas, Texas 15201 Dallas, Texas 75201
ATTN: Transportation Department ATTN: Utility Related Credit
Group
or at such address as each party may by like notice give to the other. Such
mailed notices shall be deemed to have been given when deposited in the United
States mail (first class, registered or certified), postage prepaid, or in the
case of hand delivery, when accepted by a representative of etrher party from a
representative of the other party.
8.3 This Agreement constitutes the entire agreement between the parties
covering the subject matter hereof, and there are no agreements, modifications,
conditions or understandings, written or oral, express or implied, pertaining
to the subject matter hereof which are not contained herein,
8.4 Modifications of this Agreement shall be or become effective only
i
upon the mutual exseution of appropriate supplemental agreements or smendnents
i hereto by duly authorized representatives of the respective parties.
ACCEPTED AND AGREED to this day of 1989,
LANE STAR WAS COMPANY, a Division CITY OF DENTON
of ENSERCH Corporation
by- By
Title,_.___ Title _
Attest: Attest;
j By__ By_
I! 11
F
I
STATE OF
COUNTY OF
ItFOR6 ME, the undersigned authority, a Notary Pw%lte in and for said
County and State, on this day personally appeared
Of , a corporation, known to
me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity theretn stated, and as the act and deed of
said corporation,
GIVEN UNDER MY HAND AND SLAL Of OFFICE, this the day of
A.D., 19_
i
Notary Public in and for
County,
My commtssionixpires the
day of 19_.
i
STATE OF TEXAS
COUNTY OF DALLAS
k BEFORE ME, the undersigned authority, a Notary Public In and for the
f State of Texas, on this day personally appeared V F. Uetdler.-Jr.. Vice
President of LANE STAR CAS COMPANY, a Division of ENSERCH Corporation, a Texas
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity theretn stated,
and as the act and deed of said corporation,
OWEN UNDER MY NAND AND SEAL OF OFFICE, thin the day of
A.D. 19_
I
Notary Publle !n and for
the State of Texas
i
{
I
12
I
I
I
i
I
1RttT NO. I
APPUDt)t "A"
CAS TRANSPORTATlpts A41104VT
C N aL TER}IS ~~e?lam
1, Definitions
(a) "Cu" shall mean natural gaa ptsl+pl from gat 04111. vsporlted
natural gas liquids, gas produced in 4&,,4141104 vitta oil gea11n{head ges)
I
and/or the residua gas resulting frog pt,441114 taaistghead gas and/or gas
wall gas.
(h) "Day" shall mean the 24-hour peflrl /ylnning At 7:40 e,s„ Dallis
time, on one calendar day end ending 4t r 00 s.a., Dallas ties, on the
following calendar day,
(c) 'Month" or "billing Month' shall sMSS tha pesrlod boglaelag at 7;00
i a.m., Dallas time on the first day of a calee./sr eseth and endlr+a at 1:00 a.m.,
Dallas tine, on the first day of the succeedgrg 1111n4ar rmonth,
1
(d) "Year" ,hall Mean a period o g tetelvt (12) cotesesutive uonthe
beginning at 7:00 a,m., Dallas time, on J4Nust> 1 of each calendar year of the
term hereof and ending at 7:00 a.m, Dallas list, en the no" Oats of each
succeeding year during the rata hereof,
(e) "Mcf" shall mean one thousand (1,000) ewilt fear. f
(f) The term "btu' as used herein %%Ail fala Ir[cish Maststai Unit and,
where appropriate, the plural thereof. The tats '*Atu" shalt Malt #os m[llion
(1,000,t"00) Btu,
(g) "Heating Value" cr "Moat Content" jM11 stem this total hosting valus
expressed in Btu par cubic foot (gross hastll'g v11ee) of the ges delivered
hareundsr, and shall be determined at a te!►etetsre of statY (60) degrsas
Fahrenheit, saturated with water vapor and „met a )tonsure etulveLeet to that
i
I
1
J„
FS
$PIET No, 2
of thirty (70) inches of mercury at thirty-two (32) degrees Fahrenheit
converted to base conditions of sixty (60) degrees Fahrenheit and an absolute
pressure of fourteen and eixty•five one hundredths (14,65) pounds per square
inch and adjusted to reflect actual water vapor content,
(h) "Psia" shall mean pounds per square inch absolute,
T (I) 'Ps W shall mean pounds par square inch gauge,
U ) "Point of Receipt" or "Receipt Point" shall mean the point(s) where
Transporter receives gas delivered to it by Shipper or by the designee of
Shipper for Shipper's account.
(k) "Point of Delivery" or "Delivery Point" shell mean the point where
Transporter delivers gas to Shipper.
2, Measuring "ie•CL-1IId attT
I
(a) The gam delivered to Transporter at the Receipt Point(s) shall be
I~
measured by means of measuring devices of standard type which shall be
installed, operated and maintained by Transporter (or its designee) and gas
delivered to Shipper (or for its account) at the Delivery Point shall be
I
measured by meters of standard type which shall b• installed, operated and
maintained by Transporter (or its designee). Msuuremint devices and equipment ,
shall be tested and adjusted for accuracy on a regular schedule by the party
metering the gas ( the "metering party"),
(b) Shipper agrees to reimburse Transporter, within ten (10) days from
the date of receipt of. Transporter's Invoice, for any tap valves, metering
facilities and associated equipment and all tabor and overhead expenses,
attributable to the installation of such equipment, incurred by Transporter in
effectuating the receipt and delivery of gas hereunder. If the invoiced amount
is not paid when due, interest on all unpaid amounts shall aecrue at the rate
i
I
i
6
s r,
r.
SHEET NO. 1
of one and one-half percent (141) per month from the date such amount is due
Transporter; provided, however, no interest shall accrue on unpaid amounts when
failure to make payment is the result of a bona fide dispute between the
parties hereto regarding such amounts and Shipper timely psyc all amounts not
in dispute. Failure of Transporter to receive total reimhvesoment, for any
amounts not in dispute, within thirty (30) days of Shipper's receipt of
Transporter's invoice will allow Transporter to suspend and/or terminate this
Agreement, It is understood that although Shipper shall rein+,urse Transporter
for any tap valves, metering facilities and all associated ousts Incurred by
Transporter in establishing any Receipt and/or Delivery Point(,4), Shipper shall
receive ownership of only the motoring facilities and Transporter will be
solely rosponsible for all activities in connection with said metering
facilities, including, but not limited to, operation, testing, calibration,
adjusting, repair and replacement (at Shipper's expense), and maintenance,
necessary for performance hereunder until Transporter disconnects and removes
the motoring facilities within a reasonable tieo after termination of this
Agreement, After said disconnection and removal. Shipper will have the right
within a reasonable period of time thereafter to pick up the metering
facilities from Transporter. Shipper's failure so to claim the motoring
facilities within ninety (90) days of Transporter'e notice to Shipper of the
disconnection and removal thereof, shall constitute a waiver I,y Shipper of any
right, title or interest in and to such metering tscilitte+ and all right,
title and interest therein shall thereafter vast in Transporter. Transporter
shall retain ownership of all equipment associated with the rap and tap va it
installation. Notwithstanding the above, if adequate metering facilities are
already in existence at the Receipt and/or Delivery Points hereunder, such
i
I
i
I
5
l
SHEET NO, 4
existing metering facilities shall be used and the party having title to such
fsctltttes shall retain title to such facilities.
(e) The other party shall have access to the metering party's metering
equipment at all times, but the maintenance, calibration and adjustment thereof
shall be done only by the employsss or agents of the metering party. Records
from such metering equipment shall remain the property of the metering patty
and shall be kept on file by said party for a period of not less than three (3)
years, However, upon request of the other party, the metering party shall
hake available to the other party volume records from its metering equipment,
together with calculations therefrom, for inspection and verification, subjact
to return by the other party to the motoring party within thirty (30) days
after receipt thereof,
(d) The other party may, at its option and expense, Install and operate
meters, instruments and equipment, in a manner which will not Interfere with
the metering party's equipment, to check the metering party's meters,
instruments and equipment, but the measurement of gas fo- tho purpose of this
Agreement shall be by the metering party's meter only, except as hereinafter
sPecificall ;
y provided. The meters, check meters, instruments and equipment
installed by each party shall be subject at all reasonable times to inspection
or examination by the other party, but the calibration and adjustment thereof
shall be done only by the installing party.
(a) Each party shall give to the other party notice of the time of all
tests of meters sufficiently in advance of such teats so that the other party
may conveniently have its represantstivee present; provided, however, that if
either party has given such notice to the other party and such other party is
not present at the time specified, then the party giving the notice may proceed
C
h
I
IEI
1 ~
f
L
SHEET No, s
with the test as though the other patty were present,
(f) Motor measurements computed by the metering party shall be deemed to
be correct except where the meter Is found to be inaccurate by as much as one
percent (11), fast or slow, or to have failed to register, In tither of which
comes the metering party shall repair or replace the mater. The quantity of
gas delivered while the meter was inaccurate or tailed to register shall be
determined by the readings of the other party's check meter, if Installed and
in good operating condition by correcting the error it the percentage of
error is ascertainable by calibration or mathematical calculation, If not so
ascertainable, then It shall be determined by estimating the quantity on a
basis of deliveries urdsi similar conditions when the motor was registering
accurately, Such adjustments or correction shall be made only for ons•half (k)
of the period between the test in which the inaccuracy was discovered and the
r
previous tut for accuracy; provided, however, such adjustment or correction
period shall not exceed ninety (90) days,
~ 1. Muau__reeente
(a) In gee measurement computations, the motoring party may use the
findings and rules of the Railroad Commisuicn; pith respect to flowing
temperature, the metering party shall at its expense properly Install and
operate a device of standard make to continuouily determine or record flowing
temperature, Vith respect to specific gravity, such shall be determined by
"on-site' sampling and laboratory analysis or any other mutually agreeable
method which to of standard industry practice (provided, however, that either
party may at its expense properly install and operate a recording specific
gravity Instrument of standard make and in this event the specific gravity as
recorded shall be used).
I
r
SHEET No. 6
(b) The meters for measurement of volumes at the Receipt Point(s) and
Delivery Point hereunder shall be Installed and operated, and computelions
shall be made, in accordance with current industry standards. The unit of
measurement of gu shall be one thousand (1,000) cubic feet at a pressure base
of fourteen and sixty•llve one hundredths (14,65) pounds per square Inch
absolute end at a temperature base of sixty (60) degrees Fuhranholt, Motor
I measurements shall be computed by the measuring party into such units In
accordance with the Ideal Cu Laws for volume variations due to metered
pressure and corrected for deviation using daily averages of recorded specific
gravity and flowing temperature, or by using the calculated specific gravity
determined by the method mentioned in paragraph (e) below,
(c) The daily average heating value and specific gravity of the gas
delivered hereunder by either party may be determined by the use of BTU
-ecording instruments of standard type, which may be Installed and oporstM by
the metering party at the metering point, or at such other point or points as
j are mutually agreeable to both parties; provided, however, it there to no BTU
recording instrument at a particular receipt or delivery point specified herein
i
or agreed upon hereunder, then the heating value and specific gravity of the
i
gas at such mint may be determined by "on-site' sampling and laboratory
analysis or any other mutually agreeable method which is of standard Industry
practice,
(d) The daily average motor pressure, specific gravity, flowing
temperature and heating value shall be determined only during periods of time
when the gas Is actually flowing,
4, QuAltex
(a) Each party shall deliver to the other party hereto natural gas which
G
I
k
it
SHEET NO. 7
I$ of merchantable quality and is commercially free from water, other
objectionable fluids, sand and other objectionable solids or gas components and
which contains (t) no oxygen, (ii) not more than five (5) grains of total
sulphur consisting of not more than one quarter grain of hydrogen sulphide
and one (1) grain of mercaptan sulphur per one hundred (100) cubic feet of gas,
(III) not more than three percent (31) by volume of carbon dioxide, and (Lv)
not more than seven pounds (7e) of water vapor per one million (1,000,000)
1
cubic feet of gas, The gas shall be at temperatures not in excess of one
hundred twenty (120) degrees Fahrenheit nor loss then forty (40) degrees
Fahrenheit and shall have a heat content of not less than nine hundred fifty
(950) or more than eleven hundred fifty (1,150) British Thermal Un!ts per cubic
foot under the conditions of measurement contained herein, Transporter shall
not be obligated to accept any gas delivered by Shipper (or its designee)
hereunder which Is not interchangeable with other gas in Transporter'# pipeline
at the Point(s) of Receipt hereunder. Transporter's determination of such
Interchangeability shall, be based upon a factor which is equivalent to the
quotient obtained by dividing the total heating value of such gas, expressed in
BTU's, by the square root of the specific gravity of such gas. Such factor
must be within 17% of the interchange factor to calculated by Transporter for
the gas In its system ■t the Receipt Point(s) hereunder.
(b) If at any time the gas fails to most the quality specifications
enumerated heroin, the party receiving such gas shall notify the party
delivering such gas, and the delivering party shall Lmedistely correct such
failure, If the delivering party to unable or unwilling to deliver gas
a:cording to such specifications, the party receiving such gas may refuse to
accept delivery of gas hereunder for so long se such condition exists.
I
i
{
r
r~.
SHEET NO, g
5. Taxes
(a) Shipper agrees to pay Transporter, by way of reimbursement, all
Taxes levied and imposed upon Transporter with respect to the transport of gas
and associated facilities related to the performance of this Agreement. It any
such Taxes levied and imposed upon Transporter by any gover,mental authority
are calculated based upon the value or sales price of the gas transported
hereunder, Shipper shall disclose to Transporter the value nr sales price of
such gas to enable Transporter to calculate and pay all such fees and taxes to
appropriate governmental authorities in a timely manner. If Shipper fails or
refuses to disclose the value or sales price of such gas, Transporter shall
have the right to terminate this agreement by giving Shipper ten (10) days'
prior written notice and Shipper hereby egrets to indemnify and hold
j Transporter harmless frog and against any and all claims, demands, losses or
i
j expenses, including attorneys' fees, which Transporter may occtAr as a result of
Shipper's failure or refusal to disclose the value or sales price of gas
transported hereunder.
I
(b) The tern :Iuci►L" as used herein, shall mean all taxes levied upon
and/or paid by Transporter (other than ad valorem, capital stock, income or
excess profit taxes, except as provided herein, general franchise taxes l
imposed on corporations on account of their corporate existence or on their
right to do business within the state as a foreign corporation and similar
taxes), including, but neA limited to, gross receipts tax, street and alley
rental tax, licenses, fees and other charges levied, assisted or made by any
governmental authority on the act, eight or privilege of transporting,
handling or delivering gas, where such taxes are based upon the volume, hest
I
i
I
SHEET NO. 9
content, value or sales price of the gas, or transportation fee payable
hereunder.
6. Eillinff. Accounting. and Reports
(a) On approximately the 15th day of eaon month, Transporter shall render
to Shipper a statement for the preceding month showin; the Kcf and MHAtu
delivered at the Receipt Point(s) and Delivery Faint; the amount of
compensation due to Transporter hereunder, including the tax reimbursement; and
other reasonable and pertinent information which is necessary to explain and
support same and any adjustments made by Transporter in determining the amount
billed.
(b) Shipper shall pay Transporter within twelve (12) days from the data
Transporter's statement is deposited postage prepaid in the Vulted States mail
or in the case of hand delivery, within ten (10) days from the date
i
Transporter's statement is delivered to s representative of Shipper from a
I
representative of Transporter, for gag transported hereunder during the
preceding month, or as to payment which is otherwise due hereunder, according
to the measurements, computations and rates herein provided, if the invoiced
amount of any payment due is not paid when due, interest on all unpaid amounts
shill accrue at the rate of one and one halt percent (1h%) per month from the
data such mount is due Transporter; provided, however no interest shall accrue
on unpaid amounts when failure to make payment is the result of a bona fide
dispute between the pasties hereto regarding such amounts ar,d Shipper timely
pays all amounts not in dispute,
(c) Each party hereto shall have the right at all reasonable times to
examine the measurement recorda and charts of the other party to the extent
necessary to verify the accuracy of any statawent, charge, computation or
I
l
° P
SHEET No. 10
lemaind made under or pursuant to any of the provisions in this Agreement. If
any such examinations reveal or if either party should discover any inaccuracy
in such billing theretofore made, the necessary adjustments in such billing and
payment shall be made; provided, that no adjustments for any billing or payment
shall be made for any inaccuracy claimed after the lapse of two (2) years from
the rendition of the invoice relating thereto.
7. Responsibility
Shipper shall be deemed to be in control and possession of the gas until
such gas shall have been delivered to Transporter at the Receipt Point(s) and
after such gas shall have boon delivered at the Delivery Point. Transporter
shall be deemed to be in control and possession of the gas after receipt of the
gas at the Receipt Point(s) and until such gau shall have bean delivered to
Shipper (or for its account) at the Delivery Point. Each party shall have
responsibility for gas handled hereunder, or for anything which may be done,
3
happen or arise with respect to such gas, only vhen such gas is in its control
i
and possession as aforesaid. Each party shall be responsible for any damage or
injuries caused thereby until the same shall have been delivered to the other
party at the Receipt Point(s) or Delivery Point, except injuries and damages
which shall be occasioned solely and proximately by the negligence of the
receiving party.
g Warrant {
Itch party hereto warrants to the other that at the time of delivery of
gas hereunder it will have good title or the right to deliver such gas, and
that such gas shall be ftee and clear of all liens and adverse claims; and
each party agrees, with respect to the gas delivered by it, to indemnify the
I
other against all suite, actions, debts, accounts, dasuges, costs (including
Iii
i
SHEET NO, 11
attorneys' fees), losses and expenses arising from or out of any adverse claims
of any and all persons to or against said gas. Title to and ovnorship of the
gas delivered hereunder shall pass to and vest in the party receiving the gas,
9. Force Majoure
(a) In the event either party is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Agreement, except the
obligation to pay monies due hereunder, it is agreed that, on such party's
giving notice and reasonably full particulars of such force majrure, in writing
or by telegraph, to the other party within a reasonable time after the
occurrence of the cause relied on, the obligations of the party giving such
notice, so far as they are affected by such force majours, shall be suspended
i
during the continuance of any inability so caused, but for no longer period,
and such cause shall, so far as possible, be remedied with all reasonable
dispatch,
(b) The tern 'force majeure•, as employed herein, shall mean acts of
Cod; strikes, lock outs or other industrial disturbances; acts of the public
anmy, wars, blockades, insurrections, civil dtsturbanc a and riots, and
epidemics; landslides, lighting, earthquakes, ftras, storms, floods and
washouts; arrests, orders, directives, restraints and requiromenti of the
government and governmental agencies, either federal or state, civil and
military; and application of governeental conservation riles and regulations;
explosions, breakage or accident to machinery or lines of pipe; outages
(shutdowns) of power plant equipment or tines of pips for inspection,
I maintenance or repair; fressing of wells or lines of pips; the partial or
entire nonperformance of any third party transportation pipeline which is
necessary to receive and deliver gas under this Agresment; and any other
I
E
i
)
I
SHEET NO, 12
causes, whether of the kind enumerated or otherwise, not reasonably within the
control of the party claiming suspension. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion of
the party having the diff` ulty, and that the above reasonable dispatch shall
not requite the settlement of strikes or lockouts by acceding to the demand of
rr~ the opposing party when such course is or is deemed to be inadvisable or
inappropriate in the discretion of the party having the difficulty.
10. Waiver of Breaches._Defayl;s or Riches
No waiver by either party hereto of any one or more breathes, defaults or
rights under any provisions of this Agreement shall operate or be construed as
a waiver of any other breaches, defaults or rights, whether of a like or of a
different character. By providing written notice to the other party, either
party may assert any right not previously asserted hereunder or may assert its
right to object to a default not previously protested. Except as specifically
provided herein, in the event of any dispute under this Agreement, the parties
' I
shall, notwithstanding the pendency of such dispute, diligently proceed with
the performance of this Agreement without prejudice to the rights of either
party,
11, 8 medv for Breach
Except as nthervise specifically provided herein, if either party shall
fail to perform any of the covenants or obligations Imposed upon it in this
Agreement (except where such failure shall be excused under the provisions of
Section 9 hereof), then, and in that event, the other party nay, at its option
(without waiving any other remedy for breach hereof), by notice in writing
specifying wherein the default has occurred, indicate such party's election to
terminate this Agreement by reason thereof; provided, however, that Shipper's
I
I
I
i
I`
I
SHEET NO. 13
failure to pay Transporter within a period of ten (10) days following Shipper's
i
receipt of written notice from Transporter advising of such failure to make
payment in full within the time specified in Section 6 hereof, shall be a
l
default which shall give Transporter the right to immediately terminate this
I Agreement, unless such failure to pay such amounts is the result of a bona fide
dispute between the parties hereto regarding such amounts hereunde: and Shipper
I
1 timely pays all amounts not in dispute. Vith respect to any other matters, the
party in default shall have thirty (30) days from receipt of such notice to
remedy such default, and upon failure to do so, this Agreement shall terminate
i
from and after the expiration of such thirty (30) day period. Such termination
shell be an additional remedy and shall not prejudice the right of the party
not in default to collect any amounts due it hereunder for any damage or loss
I
suffered by It and shall not waive any other remedy to which the party not in
I
1 default may be entitled for breach of this Agreement.
i
I I!`f
I
I I
f ~
i
I
~I
,
~~y eA
M1 PY93w~
I m: •.H 1.....,al
I
EXHIBIT "A■
TO
CAS TRANSPORTATION ACREE4En
BETWEEN
LANE $TtX% 9AS COMPANY
AND
CITY OF DENTON
IL~I11p0[Car Raeaiot Pointfaa
Dascrin
-~~X-Y31ilU!
1. Lone Star's interconnection with
Vslaro At Ennis (Ellis County, Texas) 25,000 Met
2. Lone Star's interconnection with
Mobil At Wahl (Pecos Count 25,000 Met
Y, Texas)
i
3. Lona Star's Interconnection with
Exxon's Katy Plant (Waller County, Texas) 23,000 Met
' 4. Lone Star's interconnection with
Palo Duro P441 ins (Nolan County, Texas) 25,000 met
5. Lane Star's interconnection with
Delhi (Denton County, Texas) 23,000 Hof
i
I
i
I
I
~I
I 1IWSF4F GAS AGREEMENT
THIS ACREEMENT, made and entered Into by and between the CITY OF DENTON,
a municipal corporation, hereinafter referred to as "buyer,' and LANE STAR GAS
COMPANY, hereinafter referred to as 'Seller,"
W I T N E S S E T H:
I
WHEREAS, buyer and Salter have entered into a Gas Sales Contract dated
January 1, 1989 (heroin 'Gas Sales Contract") and a Cam Transportation Agreement
dated January 1, 1989 (heroin 'Gas Transportation Agreement'); and
WHEREAS, the City of Bryan, the City of Greenville, the City of Garland
and Brazos Fuel Company,Inc „ hereinafter collectively referred to as "Cities',
own and operate the following electric generating stations: Roland C. Dansby
Power Plant, the Ray Olinger ?over Plant and the Creenvtlle Steam ?over Plant,
Such electric generating stations and the Intersection of Seller's Line X(364)
and Brazos Fuel Company, Inc,'s 12-inch pipeline near Huckabay in grath County,
Texas (hereinafter referred to as the "Huckabay Point of Interconnection') are
hereinafter collectively referred to as 'Other Cities' Plants;' and
I
- WHEREAS, Buyer and Seller desire to enter into a "Transfer of Ca
Agreement' as hereinafter provided;
NOW, THMPORS, in consideration of the mutual covenants and agreements
herein contained, together with other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer do
hereby contract and agree with each other as follovs:
1
I
I~
i
ARTICLE I
SUBJECT MATTER
It is agreed that from time to time buyer may elect to take and raceive
a quantity of gas that is less than the "Maximum Daily Volume" or "Maximum Annual
Volume' provided in the Gas Sales Contract, or the maximum daily volume provided
in the Gas Transportation Agreement, between Buyer and Seller under the terns
and conditions of such agreements and may elect instead to receive such quantity
of gas (on an equivalent MMBtu basis) at any of the Other Cities' Plante, which
shall be hereinafter referred to as a "transfer of gas', subject to the following
conditions-
a, Buyer shall notify Seller by telephone through normal dispatching
procedures a reasonable amount of time in advance of its desire to
uke such a transfer of gas and shall designate (1) the quantity of
gas (in MMBtu) by sales or transportation category, (ii) which of
the Other Cities' Plants that such gas will be transferred to, as
i
wall as (iii) the period of time dutirg vhich such transfer shall
take place.
b. Seller shall agree to such a transfer of gas except when Seller
detsrwines that to do so would interfere vith Seller's curtailment 1
program or with Seller's ability to provide adequate service to !
customers accorded an equal or higher priority than Buyer by $allot'a
curtailment program; provided, hovever, buyer shall never receive
curtailment credit under the Gas Salsa Contract for curtailment of
gas transferred hereunder.
2
s
i
I
y
c. This Agreement shall never be construed to give buyer the right to
deliver gas at rates in excess of any contractual limitations
provided for any of the Other Cities' Plants.
d. All such quantities of gas transferred from Buyer as provided herein
i shall be credited toward the Demand Charge under Buyer's Gas Sales
Contract with Seller as such credits are set forth in such Gas Sales
Contract as if such gas had been delivered to buyer at Buyer's
/ plants. Notwithstanding anything to the contrary, Buyer shall never
have the right to transfer (1) any quantities of gas which are sold
by Seller under paragraph 4(b) of the Gas Sales Contract or (ii) any
I
quantities of gat which are delivered under agreements other than
the Gas Sales Contract or the Gas Transportation Agreement.
e. The heating value to be used for measurement and billing purposes
of the gas transferred hereunder shall be the heating value of such
i
gas as delivered at the Ocher Cities' Plant(s).
l t. The total annual volume of all gas transferred under this Agreement
kk by Buyer during any Year of the tan of the Cat Transportation
I Agreement shall not exceed twanty•fiva percent (291) of the combined
total volume of gas transported by Seller for Buyer to any and all
delivery points during such Year. Such wonty•tlva percent (251)
limit shall apply only to gas volum*s transferred to such Other
Cities' Plant(s) where such Other City(@) does not have both a gas
sales contract and a gas transportation agtsement with Seller which
is then currently in effect. However, without obligating Seller in
any way to transfer gat for Buyer in excess of the limit tat fotth
in this paragraph, it Buyer should transfer quantities of gas in
7
I
I
i
I
I
I
I
;
excess of such limit, buyer shall pay Seller for any such gas an
` additional amount of twenty (20C) per10Qtu in addition to the sales
price or transportation fee provided in the Gas Sales Contract and
Gas Transportation Agreement, whichever agreement/contract is
applicable.
g, buyer shall be allowed to transfer gas to any of the Other Cities'
Plants provided such City has both a gas sales contract and a gas
transportation agreement with Seller which is then currently in
effect. However, if any of such Cities does not have both a gas
silos contract and a gas transportation agreement in affect with
Seller at such time and Seller should desire to allow buyer to
transfer gas to such City, than Seller may elect to allow such
transfer for any time period Seller chooses, all at Seller's sole
option, Therefore, on or before each April 1 and October 1 of any
Contract Year during the term of the Gas Sales Contract, Seller
shall inform buyer of each City which does not have both a gas sales
contract and a gas transportation agreement in affect with Seller
at such tied and Seiler shall also than inform buyer of: (i) which
of such Other Cities' Plant(s) shall be allowed to receive gas
` - - transferred hereunder for the consecutive six (6) month period
beginning on such April 1 or October 1, and (ii) the maximum hourly
and daily volumes Seller may deliver hdreundst at each such Plant(s)
during such period. However, if any City(s)'a gas sales contract
and/or gas transportation agreement terminates during such six (6)
month period, 3ellsr shall not be obligated to deliver gab
transferred hereunder to such City(s). Provided, however, if Seller
4
I
I
11
fails to submit to Buyer on or before April 1 or October 1 of any
Contract Year the allowed Plant(s) and volumes as provided in the
previous sentence, then such allowed Plant(s) and volumes for the
immediately preceding consecutive six (6) month period shalt apply.
! h. Buyer nay terminate such a transfer of gas at any time by giving
M
reasonable advance notice to Seller of its desire to do to and Seller
/ may likevtse terminate a transfer of gas by giving Buyer reasonable
advance notice if Seller has determined that to continue a transfer
would interfere vith Seller's curtailment program or with Seller's
ability to provide service to customers accorded an equal or higher
priority tt:an Buyer under Seller's curtailment program.
i
ARTICLE lI
TERM
Subject to the other terns and provisions hereof, this Agreement shall be
effective on the let day of Nay, 1939 and shall thereafter continue and remain
in full force and effect for a period and term extending until the termination
I
j of the Gas Sales Contract betveen buyer and Seller.
I
ARTICLE III
1
f PAYMENT
All quantities of gas transferred from buyer to one of the Cities as
provided for herein, shall be deemed to have been purchased by buyer or
transported for buyer, whichever is applicable, and such quantities transferred
shall not be credited in any way tovard any agreement in effect for the City to
which the transfer is made. The sales price or transportation fee for such
volume of transferred gas, the rendering of statements and bills, and the
payments for same and any other similar mattars shall be according to the terms
S
!
I
i
and conditions of buyer's Gas Sales Contract or Gas Transportation Agreement,
whichever is applicable,
ARTICLE IV
NOTICES
The parties hereto recognize that in order to determine and allocate sales
and/or transport volumes delivered each billing month under (t) the Gas Sales
Contract and/or the Gas Transportation Agreement and (ii) the aforesaid Citiea'
contracts, it is necessary for Seller to deduct the transferred volume(s) of gas
which was delivered under the Cam Sales Contract and/or the Gas Transportation
Agreement at each Other Cities' Plants during each billing month from total
deliveries to such plant(s). Therefore, for confirmation purposes, buyer agrees
to furnish to Seller at its office in Dallas, Texas, a written report of all gas
i
transferred hereunder during each billing month within four (4) working days
following the end of each such billing month. Only transferred volumes so
reported each month shall be considered as gas volusas transferred hereunder.
j
The parties hereto agree that this Agreement may be executed in one or
more copies, or counterparts, each of which, when executed by Seller and buyer,
as well as any of the parties listed below, as Other Cities, shall constitute
and be an original effective agreement bstwaen Buyer and Seller and such Other
I
Cities,
i
6
f
i
it
F
1
IN WITNESS WHEREOF, this Agretaent has been executed in duplicate originals
by the parties hereto on the day of 1989.
ATTEST: SELLER:
LONE STAR CAS COMPANY, a Division of
ENSERCH CORPORATION
J. R. Moore
Vice President
ATTEST: BUYER:
CITY OF DENTON, TEXAS
I I
i OTHER CITIES:
I ATTEST: CITY OF BRYAN, TFUS
I
ATTEST: CITY OF GARLAND, TEXAS
ATTEST: CITY OF CREEhVILU, TEXAS
ATTEST: BRAZOS FUEL COMPANY, INC.
i
i
I
7
;
i,
I
i
2
GAS SALES CONTRACT
THIS CONTRACT is made and entered Into as of the lit day of January, 1989
by and between ENSEACH GAS COMPANY (Seller), whose sailing address is 1700
Commerce Place/8th Floor, Dallas, Texas 75201, and the CITY Of DENTON iSuyer),
whose address to Municipal Building, Denton, Texas 76701, and provides for the
male and purchase of such quantities of gas which Seller has available and the
right to sell from various sources within the State of Texas under Seller's
existing agreements. Said gas production will be made available to Buyer or Lone
Star Cas Company (Buyer's Agent) under this Contract on a monthly basis at the
Delivery Poinr(s) hereunder.
I.
j Dal va Point. The Point(s) of Delivery for all gas delivered hereunder shall
be at the inlet flange of buyer's Agent's maters located at various points on
Buyer's Agent's pipeline within the State of Texas. Title to all gas delivered
hereunder shall pass from Seller to buyer at said Point(s) of Delivery. Buyer
shall arrange and pay for the transportation of the gas covered hereunder from
the delivery point to its final destination.
it.
lcoL The term of this Contract shall commence on the date of initial delivery
E hereunder and continue through December 31, 1993, and month to month thereafter
until cancelled by either party giving thirty (30) days prior vtittsn notice to
the other party. Buyer affirms that it will suffer no irreparable injury by
virtue of the expiration of this Contract at the time and date such expiration
i occurs and hereby authorises the sbandorxaeut of service as set forth herein,
III,
OuantiU. Subject to the terms and conditions herein, buyer may purchase and
receive such quantities of gas that Seller has available for sale from various
sources hereunder on any given day not to exceed a maxirum quantity of twenty-
five million cubic feet (25 Met) of gas per day. The quantities of gas which
Seller has available for sale to buyer shall be determined solely by Sailor and
shall be that quantity of gas which Seller delivers each day to Buyer's Agent
at the Point(s) of Delivery hereunder for delivery to Buyer, Nothing contained
heroin, however, shall be construed as preventing the parties from mutually
agresing in writing to the isle and purchase of quantities of gas in excess of
those provided in this paragraph.
Prior to the beginning of each month, buyer shall notify Seller of the estimated
monthly volumes, if any, that buyer in good faith estimates it will purchase
1
I
i
I '
i
i
hereunder during such month. Buyer may assign, upon thirty (30) days prior
written notice to buyer's Agent, any or all nomination obligations to Seller.
Upon such assignment. Seller shall inform buyer's Agent of estimated monthly
volumes which Seller estimates Buyer's Agent will deliver to Buyer for such
month.
Both parties recognise that the volumes delivered at the Point(s) of Delivery
hereunder may be commingled with volumes of gas delivered under agreements
between Seller and other third parties; therefore, for allocation and billing
purposes Buyer and Seller hereby agree that the procedure for allocation of all
volumes delivered at the Point(s) of Delivery shall be mutually agreed upon by
_ the involved parties.
In no event shall the volumes of gas that Seller sells and delivers to buyer or
that buyer purchases and receives from Seller under the terms of this Contract
ever exceed the volumes of gas which can be legally produced under the applicable
rules and regulations of the Railroad Commission of Texas in the course of
reasonably prudent operations.
Seller shall to in control and poeseesion of the gas sold and purchased hereunder
and be responsible for and shall Indemnify and hold buyer or buyer's Agent
harmless from any damages or injury caused thereby until the same shall have been
delivered to buyer or Buyer's Agent at the Point(m) of Delivery, except for
injuries and damages occasioned proximately by the negligence of Buyer or Buyer's
Agent. Buyer shall be in control and possession of the gam sold and purchased
hereunder and be responsible for and shall Indemnify and hold Seller harmless
from any damage or injury caused thereby once the same his boon delivered to
Buyer or buyer's Agent at the Point(s) of Delivery, except for Injuries and
damages occesionad proximately by the negligence of Seller.
i
1Y.
Price and Pavn,ant_ For all of Seller's gas delivered to buyer or Buyer's Agent
at the Point(s) of Delivery and purchased hereunder for the period beginning
Janusey 1, 1969 and ending January 31, 1989, buyer agrees to pay Seller and
- Seller agrees to accept $1.98 per Mtbtu. The price to be paid by Buyer for gas
hereunder fur the period beginning February 1, 019 and ending at 4:00 p.m.
February 3, 1969 shall be $1.60 par WBtu. The price to be paid by Buyer for
gas hereunder for the period beginning at 4:00 p.m, February 6, 1939 and ending
February 21, 1999 shall be $1.95 per MMbtu, The price to be paid by Buyer for
gas hereunder for the period beginning February 22, 1939 and ending February 26,
1989 shall be $1,75 per MMBtu, The price to be paid by buyer for gas hereunder
for the period beginning March 1, 1939 and ending March 31, 1969 shall be $1.43
per MMStu. The pries to be paid by Buyer for gas hereunder for the period
beginning April 1, 1939 and ending April 30, 1939 shall be $1,55 per MMBtu. The
price to be paid by Buyer for gas hereunder during the remaLning term hereof
after April 30, 1969, shall be negotiated by Buyer and Seller for any mutually
agreeable time perLod(s). In the event buyer and Seller cannot mutually agree
upon a negotiated price prior to the beginning of any such period, then neither
party shall have any obligation to perform under this Contract during such
period, exempt for the requirement to make paysent of any asounts due hereunder,
i
2
i
f
I a
III` i j
k
i
In no event shill any price paid and collected hereunder exceed any maximum
lawful price established by the Natural Gas Policy Act of 1978 (NGPA) which is
applicable by vintage, character, and category to the gas sold hereunder. If
such contract price is reduced to such lesser maximum lawful price, Seller shall
be entitled to collect such allowances as are available under Section 1L0 of the
NCPA for gathering, treating, compression and tax reimbursement (as limited by
Article VI hereof), but the sum total of such maximum lawful price and Section
110 allowances shall not exceed an otherwise applicable contract price.
Seller shall render a statement to Buyer on approximately the 15th day of each
month for gas delivered the previous month. Said statement shall be based on
Buyer's Agent's sales meters and buyer shall pay Seller the amount of the
statement within twelve (12) days from the date Seller's statement is deposited
postage prepaid in the United States mail or in case of hand delivery, within
ten (10) days from the data Seller's statement is delivered to a representative
of Buyer from a representative of Seller. If the total invoiced amount of any
payment due is not paid when due, interest on all unpaid amounts shall accrue
at the rate of one and one-half percent (1 1/21) per month from the date such
amount is due Seller; provided, however, no interest shall accrue on unpaid
amounts whin failure to make payment is the result of a bona fide dispute betvaan
the parties hereto regarding such amounts and buyer timely pays all amounts not
in dispute. Should litigation on any of these aeaunts be required, Buyer agrees
to reimburse Seller for its reasonable attorneys fees.
Bills rendared for gas delivered hereunder shall be payable at Seller's office
located at P. 0. Box 910264, Dallas, Texas 75191.0264, or such other address as
may from time to time be designated by Seller upon reasonable notice.
V.
I
Measurement. Heating value is to be calculated at a pressure of 14,63 pate on
a dry basis and temperature of 600f. The unit of volume for purposes of
measurement shall be one thousand (1,000) cubic feet of gas at 14,65 pets and
606F, as corrected pursuant to current industry standards, and Buyer's Agent's
meters and other measurements shall be conclusive except for when the metat is
found to be inaccurate by as such as one percent (11) fast or slow, or to have
failed to register. The quantity of gas delivered while the sw ter was inaccurate
- or failed to register shall be determined by correcting the error if the
percents, of error is ascertainable by calibration teat or mathematical
calculation, if not so ascertainable, than it shall be determined by estimating
the quantity on a basis of deliveries under similar conditions when the meter
via registering accurately. No adjustment or correction for roster inaccuracy
or failure shall be made for a period longer than ninety (90) days.
Vt.
jai, Buyer and Seller acknowledge that the present severance, production,
gathering or similar taxes amount to seven and one-half percent (7.1/21) of the
purchase price and is included therein. In addition to the terms and provisions
of Article IV herein, Buyer agrees to reimburse Seller monthly for one hundred
percent (1001) of the aggregate amount of all severance, production, gathering,
3
I
I
I
III
1 3,
b
or sim.'.lar :axes levied, assessed or fixed by any taxing authority or authorities
and paid by Seller with respect to gas sold and delivered hereunder which exceeds
the aforesaid amount in effect on the date hereof. In addition to the
aforementioned taxes, Buyer also agree, to reimburse Seller for any and all taxes
(not including excess profits, capital stocks, franchise or general property
taxes) levied, assessed or fixed by any taxing authority or authorities,
including but not limited to gross receipts taxes, and paid by Seller with
respect to the sale, transportation, handling, and/or delivery of gas sold
hereunder.
VII.
QualitX. Seller shall deliver :or receipt by Buyer's Agent natural gas which
to of merchantable quality and free of water and other objectionable fluids and
solids. The gas shall contain no oxygen, and not more than five (5) grains of
total sulphur, consisting of no more than one quarter (.25) grain of hydrogen
sulfide and one (1) grain of mercaptan sulphur per one hundred (100) cubic feet
of gas, not more than three percent (31) by volume carbon dioxide, and not more
than seven pounds (7s) of water vapor per one million (1,000,000) cubic feet of
gas, and which has a host content of not less than nine hundred fifty (950) nor 1
more than eleven hundred fifty (1,150) British Thermal Units per cubic foot under
the conditions of measurement contained herein, The gas delivered hereunder
shall be at temperatures not in excess of one hundred and twenty degrees (1204)
Fahrenheit, and not less than forty degrees (404) Fahrenheit,
VIII.
Varranty. Seller hereby warrants to Buyer that at the time of delivery of gas
hereunder it will have good title or the right to deliver such gas, and that such
gas will be free and clear of all liens and adverse claims; and Seller agrees
with compact to the gas delivered by it, to indemnify Buyer against all suite,
actions, debts, accounts, damages, costs (including attorney's fees), losses and
expenses arising from or out of any adverse claims, relating to Seller's title,
of any and all persons to or against said gas.
Each party warrants to the other that its (and/or its agent's) facilittes
utilised for the delivery and acceptance of gas hereunder are wholly intrastate
facilities and are not subject to the Natural Gas Act of 1938, as heretofore
amended. As a matartal representation, without which both parties would not have
been willing to execute this Contract, each party warrants to the other party
that it (end ita agents) will take no action or commit an act of omission which
will subject its (or its agent's) facilities, this transaction, or the other
party's (or the other party's , agent's) facilities, to jurisdiction of the federal
Energy Regulatory Comission (FERC) or its successor governmental agency under
the terns of the Natural Cat Act of 1938, as amended. The gas delivered and
accepted hereunder shall not have been nor shall be sold, transported or
otherwise utilized in interstate comerce in a manner which will subject either
party (or their agents) to the time of the Natural Oat Act of 1938, as amended.
In addition to and without excluding any remedy the aggrieved party may have at
law or in equity, the party who breaehad the above warranties and representations
4
i
I
IIl
g
d a
r
v i
shall be liable to the aggrieved party (and the aggrieved party's agent) for all
damages, Injury and reasonable •xpens• th• aggrieved att
party's agent) may sustain by reason of any breach hereof.(anFurther aggrieved
either party (or their agents) perform any act, or cause any act to be performed,
at any time, that results in any gas covered hereunder becoming regulated by or
subject to the Jurisdictional consequences of the FERC or successor governmental
authority contrary to this Contract, this Contract shall be deemed of its own befor
terms
such however c~tar inationeshall Hewers beheonitrved to tmpaieuany righerovided,
under this paragraph, agEng
buyer and Seller agree that this Contract will be construed according to the
laws of the State of Texas.
j IX,
Forca___ N.J In the event of either party hereto being rendered unable, wholly
or in part, by force maJeurs to carry out its obligations under this Contract,
other than to make payments due hereunder, it is agreed that on such party's
giving notice and full particulars of such force maJeure by written notice or
by telegraph to the other party as soon as possible after the occurrence of the
cause relied on, than the obligations of the party giving such notice, so far
as they are affected by such force maJeure, shall be suspended during the
continuance of any inability so caused but for no Longer period, and n.u h cause
shall as far as possible be remedied with all reasonable dispatch, The term
'force maJsure', as employed herein, shall mean acts of Cod; strikes, lockouts,
or other industrial disturbances; acts of the public enemy, wars, blockades,
insurrections, civil disturbaneeos and riots, and epidemics; landslide,
lightning, earthquakes, fire, stores, floods, and washouts; arrests, orders,
directives, restraints and requirements of the government and government
agencies, either federal or state, civil and military; any application of
governmental conservation rules and regulations; explosions, breakage or accident
to machinery or lines of pipe; ehutdovns of equipment or lines of pipe for
j inspection, maintenance or repair; shortage of water, frosting of wells or lines
of pipe; partial or entire failure, depletion or lose of wells or sources of
supply of gas; inability or refusal of buyer's Agent to accept deliveries of
Sea from taller or redeliver Sao to the Point(s) ol. Delivery, cancellation by
buyer's Agent of buyer's transportation agreement with Buyer's I,p nt for any
reason whatsoever; and any other causes, whether of the kind er.,umersted or
otherwise, not re aonably within the control of the party claiming ouepansion,
It is understood and agreed that the settlement of strikes or lockouts shall be
entirely within the discretion of the party having the difficulty, and that the
above requirement that any force maJeure shall be remedied with all treasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demand of the opposing party when such course is or is deemed to be
inadvisable or inappropriate in the discretion of the party having the
difficulty,
~I
i
I
i
f
r
,
R
f
X.
Recitals and Covenants. ".'ha intent and purpose of this Contract is to enable
Buyer to purchase gas Prow a source other than its traditional utility source
h of supply, buyer is not relying on and will not rely on any expectation of sales
or service from Seller except as specifically provided in this Contract. it to
intended that Seller's furnishing of gas to Buyer be solely and strictly under
the quantity, totes, and other provisions of this Contract.
Buyer believes that it to in its bast interest to purchase gas under the terns
and conditions of this Contract and without the benefit of the duties,
obligations, and conditions of sale and service which could apply to Seller were
Seller doomed to be a utility. Buyer recognises and agrees that in purchasing
j' gas under these conditions it will not have available certain legal remedio-i
against Seller which it would have were Seller to be a utility or, wen if Sello.t
were doomed to be a utility, were gas to be purchased from Seller under
circumstances and conditions other than under this Contract.
Buyer agrees and stipulates that, in making sales to buyer under this Contract,
Sailer is neither the sole not exclusive source of supply of gas to buyer nor
will Seller be engaged in the making of a city gate sale to Buyer,
buyer hereby wives any and all rights to assert or claim that Seller has any
obligations whatsoever to provide natural gas sales or service to Buyer other
than under the terms and conditions of this Contract, or that any obligations
will accrue by virtue of sales or service under this Contract. This waiver
specifically includes, but is not limited to, any claim or assertion that any
cessation of sales or service provided by Seller to buyer, provided such
cessation is in conformance with the provisions of this Contract, constitutes
abandonment of Buyer or that Seller must receive permission for such cessation
from any governmantal authority.
Should, for any reason, Seller ever be doomed to require the permission of any
governmental authority for the cessation, whether of a permanent or temporary
nature, of service and sales to Buysr as provided for in this Contract, Buyer
agrees that such cessation is in the public interest and that such permission
should be granted and/or doomed granted at the time of execution of this
Contract.
X1.
Miscall, buyer's purchase of said gso under this Contract shall bs subject
to all terms and conditions of any release(s) applicable to said Ass from prior
contracts of other purchasers.
Waiver by Seller of a particular right or default hereunder shall not be deemed
a waiver of other rights or defaults whether similar or dissimilar.
This Contract supersedes and replaces all prior contracts between the parties
hereto, or their respective predecessors in interest, for gas at the location
and for the purposes heroin designated, and constitutes the entire contract
between the parties.
6
{
1
This Contract constitutes the entire agreement between the parties covering
the subject natter hereof, and there are no agreements, modifications, conditions
or understandings, written or oral, expressed or implied, pertaining to the
subject natter hereof which are not referenced or contained herein,
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Contract in duplicate originals as of the day and year first herein written,
BUYER: SELLER:
CITY OF DENTON CISERCH CAS COMPANY
By, By:
i
Title: Title:
ATTEST:
1i
i i
i
it
I
i
~ I
7
I
i
t
EXCERPT
Public Utilities Board Minutes
May 24, 1989
6. REVIEW LONE STAR GAS CONTRACTS
Nelson Introduced Paul Brietzman, Gas Consultant, and Jim Thune,
Superintendent of the Power Plant. He then proceeded to review the
main points of the four gas contracts:
a. Lone Star Gas Sales Contract
b, Lone Star Gas Transportation Agreement
c. Lone Star Transfer of Gas Agreement
d. Enserch Gas Sales Contract.
Nelson stated that, although Denton got better concessions than ever
before from lone Star Gas, the Board needs to be well cognizant of
the fact that there are going to be times when Denton's contract
price is not going to be as good as Bryan's or Garland's.
Brietzman gave a short presentation. After general discussions,
Frady made a motion to recotmend to the City Council approval of the
four contracts upon Legal Department review and acceptance. Second
by Thompson, All ayes, no nays, motion carried.
i j
t
i
I
6445U:6
I
i
i
.
t'
2793L
ORDINANCE NO.
AN ORDINANCE AWARDING A CONTRACT FOR THE PURCHASE OF SPOT GAS
FROM ENSERCH GAS COMPANY; PROVIDING FOR THE EXPENDITURE OF FUNDS
THEREFORE; t.ND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City has solicited, received and tabulated com-
petitive sealed proposals for the purchase of spot gas in
accordance with the procedures of state law and City ordinances;
and
WHEREAS, the City Manager has reviewed and recommended that
the proposal of Enserch Gas Company is the lowest responsible
proposal services as shown in the "Bid Proposals" submitted
therefor; and
WHEREAS, the City Council has provided in the City Budget for
the appropriation of funds to be used for the purchase of spot
gas herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the proposal of Enserch Gas Company is
here y6 accepted and approved as being the lowest responsible
proposal for the items set forth in the proposal.
E SECTION II. That the City Manager is hereby authorized to
execute a contract with Enserch Gas Company for the purchasG of
spot gas under the conditions set forth therein, a copy of which
l is attached hereto and incorporated by reference herein.
j SECTION 111. That by the acceptance and approval of the above
propose ; ie'-tity Council hereby authorizes the expenditure of
h funds therefor in the amount and in accordance with the written
contract made pursuant thereto.
SECTION IV. That this ordinance shall become effective
imme at3f ely upon its passage and approval.
PASSED AND APPROVED this the day of
_ 1989.
RAY 9TEPRENS; FRYOR
ATTEST:
JENNIFER WALTERSO CITY SMIrMY
APPROVED AS TO LEGAL FORM:
DEBRA DRAYOVITC11 , CITY ATTORNEY
BY:
A
I
1I~
1
1`l\
CAS SALES CONTRACT
THIS CONTRACT is made and entered into as of the lot day of January, 1989
by and between ENSEP,CH CAS COMPANY (Seller), whose mailing address Is 1700
Commerce Place/8th Floor, Dallas, Texas 75201, and the CITY OF DENTON (Buyer),
whose address is Municipal Building, Denton, Texas 76701, and provides for the
sale and purchase of such quantities of gas which Seller has available and the
right to sell from various sources within the State of Texas under Teller's
existing agreements. Said gas production will be made available to Buyer or Lone
Star Cat Company (Buyer's Agent) under this Contract on a monthly basis at the
Delivery Point(s) hereunder.
I.
Delivary Point. The Point(s) of Delivery for all gas delivered hereunder shall
b• at the inlet flange of Buyer's Agent's meters located at various points on
Buyer's Agent's pipeline within the State of Texas. Title to all gas delivered
hereunder shall pass from Seller to Buyer at said Point(s) of Delivery. Buyer
shall arrange and pay for the transportation of the gas covered hereunder from
the delivery point to its final destination.
i II.
Term, The term of this Contract shall commence on the date of initial delivery
i hereunder and continue through December 3l, 1993, and month to month thereafter
until cancelled by either party giving thirty (30) days prior written notice to
the other party, Buyer affirms that it will suffer no irreparable injury by
virtue of the expiration of this Contract at the aims and date such expiration
occurs and hereby authorizes the abandonment of service as set forth herein.
3
i ~
III.
Quantity. Subject to the terms and conditions herein, Buyer may purchase and
receive such quantities of gas that Seller has available for sale from various
sources hereunder on any given day not to exceed a maximum quantity of twenty. !
five million cubic feet (25 MMcf) of gas per day. The quantities of gas which
Seller has available for sale to buyer shall be determined solely by Seller and
shall be that quantity of gas which Seller delivers each day to Buyer's Agent
at the Point(a) of Deliw ey hereunder for dolivery to Buyer. Nothing contained
herein, however, shall be construed es preventing the parties from mutually
agreeing in writing to the sale and purchase of quantities of gas in excess of
i those provided in this paragraph.
Prior to the beginning of each month, buyer shall notify Seller of the estimated
monthly volumes, if any, that Buyer in good faith estimates it will purchase
1
I`
3
4
hereunder during such month. Buyer may assign, upon thirty (30) days prior
written notice to Buyer's Agent, any or all nomination obligations to Seller.
Upon such assignment, Seller shall inform Buyer's Agent of estimated monthly
volumes which Seller estimates Buyer's Agent will deliver to buyer for such
month.
Both parties recognize that the volumes delivered at the Point(s) of Delivery
hereunder may be commingled with volumes of gas delivered under agreements
between Seller and other third•partles; therefore, for allocation and billing
purposes Buyer and Seller hereby agree that the procedure for allocation of all
volumes delivered at the Point(s) of Delivery shall be mutually agreed upon by
the involved parties.
In no event shall the volumes of gas that Seller sells and delivers to Buyer or
that Buyer purchases and receives from Seller under the terms of this Contract
ever exceed the volumes of gas which can be legally produced under the applicable
rules and regulations of the Railroad Comliissi-n of Texas in the course of
reasonably prudent operations.
Seller shall be in control and possession of the gas sold and purchased hereunder
and be responsible for and shall indemnify and hold Buyer or Buyer's Agent
harmless from any damages or injury caused thereby until the same shall have been
delivered to Buyer or Buyer's Agent at the Point(s) of Delivery, except for
injuries and damages occasioned proximately by the negligence of Buyer or Buyer's
Agent. Buyer shall be in control and possession of the gas sold and purchased
hereunder and be responsible for and shall indemnify and hold Seller harmless
from any damage or injury caused thereby once the same has been delivered to
Buyer or Buyer's Agent at the Point(s) of Delivery, except for injuries and
damages occasioned proximately by the negligence of Seller.
IV.
i
Price and Patsac1r, For all of Seller's gas delivered to Buyer or Buyer's Agent
at the Point(s) of Delivery and purchased hereunder for the period beginning
January 1, 1989 and ending January 31, 1989, Buyer agrees to pay Seller and
Seller agrees to accept $1.98 per MMBtu. The price to be paid by Buyer for gas
hereunder for the period beginning February 1, 1989 and ending at 4:00 p.m.
February 3, 1989 shall be $1.60 per MMBtu. The price to be paid by Buyer for
gas hereunder for the period beginning at 4:00 p.m. February 8, 1989 and ending
February 21, 1989 shall be $1.95 per MMBtu. The price to be paid by Buyer for
gas hereunder for the period beginning February 22, 1989 and ending February 28,
1989 shall be $1.75 per MMBtu. The price to be paid by Buyer for gas hereunder
for the period beginning March 1, 1989 and ending March 31, 1989 shall be $1.45
per MMBtu. The price to be paid by Buyer for gas hereunder for the period
beginning April 1, 1989 and ending April 30, 1989 shall be $1,55 per MMBtu. The
price to he paid by Buyer for gas hereunder during the remaining term hereof
after April 30, 1989, shall be negotiated by Buyer and Seller for any mutually
agreeable time period(s). In the event Buyer and Seller cannot mutually agree
upon a negotiated price prior to the beginning of any such period, then neither
party shall have any obligation to perform under this Contract during such
period, except for the requirement to make payment of any amounts due hereunder.
2
> k
In no event shall any price paid and collected hereunder exceed any maximum
lawful price established by the Natural Gas Policy Act of 1978 (NGPA) which is
applicable by vintage, character, and category to the gas sold hereunder. If
such contract price is reduced to such lesser maximum lawful price, Seller shall
be entitled to collect such allowances as are available under Section 110 of the
NGPA for gathering, treating, compression and tax reimbursement (as limited by
Article VI hereof), but the sum total of such maximum lawful price and Section
110 allowances shall not exceed an otherwise applicable contract price,
Seller shall render a statement to Buyer on approximately the 15th day of each
month for gas delivered the previous month. Said statement shall be based on
Buyer's Agent's sales meters and Buyer shall pay Seller the amount of the
statement within twelve (12) days from the date Seller's statement is deposited
postage prepaid in the United States mail or in case of hand delivery, within
ten (10) days from the date Seller's statement is delivered to a representative
of Buyer from a representative of Seller. If the total invoiced amount of any
payment due is not paid when due, interest on all unpaid amounts shall accrue
at the rate of one and one-half percent (1 1/21) per month from the date such
amount is due Seller; provided, however, no interest shall accrue on unpaid
amounts when failure to make payment is the result of a bona fide dispute between
the parties hereto regarding such amounts and Buyer timely pays all amounts not
in dispute, Should litigation on any of these amounts be required, Buyer agrees
to reimburse Seller for its reasonable attorneys fees.
Bills rendered for gas delivered hereunder shall be payable at Seller's office
located at P. 0. Box 910264, Dallas, Texas 75391-0264, or suet. other address as
may from time to time be designated by Seller upon reasonable notice.
V.
Measurement. Heating value is to be calculated at a pressure of 14,65 psis. on
a dry basis and temperature of 60°F. The unit of volume for purposes of
measurement shall be or,e thousand (1,000) cubic feet of gas at 14,65 psis and
60°F, as corrected pursuant to current industry standards, and Loyer's Agent's
meters and other measurements shall be conclusive except for when the meter is
found to be inaccurate by as much as one percent (11) fast or slow, or to have
failed to register, The quantity of gas delivered while the meter was inaccurate
or failed to register shall be determined by correcting the error if the
percentage of error is ascertainable by calibration test or mathematical
calculation. If not so ascertainable, then it shall be determined by estimating
the quantity on a basis of deliveries under similar conditions when the meter
was registering accurately. No adjustment or correction for meter inaccuracy
or failure shall be soda for a period longer than ninety (90) days,
V11
Taxes. Buyer and Seller acknowledge that the present severance, production,
gathering or similar taxes amount to seven and one-half percent (7.1/21) of the
purchase price and is included therein. In addition to the terms and provisions
of Article IV herein, Buyer agrees to reimburse Seller monthly for one hundred
percent (1001) of the aggregate amount of all severance, production, gathering,
3
I
i
i
}
a
.
or similar taxes levied, assessed or fixed by any taxing authority or authorities
and paid by Seller with respect to gas sold and delivered hereunder which exceeds
the aforesaid amount in effect on the date hereof. In addition to the
aforementioned taxes, Buyer also agrees to reimburse Seller for any and all taxes
(not including excess profits, capital stocks, franchise or general property
taxes) levied, assessed or fixed by any taxing authority or authorities,
including but not limited to gross receipts taxes, and paid by Seller with
respect to the sale, transportation, handling, and/or delivery of gas sold
hereunder.
VII.
Quality. Seller shall deliver for receipt by Buyer's Agent natural gas which
is of merchantable quality and free of water and other objectionable fluids and
solids. The gas shall contain no oxygen, and not more than five (5) grains of
total sulphur, consisting of no more than one quarter (.25) grain of hydrogen
sulfide end one (1) grain of mercaptan sulphur per one hundred (100) cubic feet
of gas, not more than three percent (31) by volume carbon dioxide, and not more
than seven pounds ()a) of water vapor per one million (1,000,000) cubic feet of
gas, and which has a heat content of not less than nine hundred fifty (950) nor
more than eleven hundred fifty (1,150) British Thermal Units per cubic foot under
the conditions of measurement contained herein. The gas delivered hereunder
shall be at temperatures not in excess of one hundred and twenty degrees (120°)
Fahrenheit, and not less than forty degrees (401) Fahrenheit.
VIII.
Warranty. Seller hereby warrants to Buyer that at the time of delivery of gas
hereunder it will have good title or the right to deliver such gas, and that such
gas will be free and clear of all liens and adverse claims; and Seller agrees
with respect to the gas delivered by it, to indemnify Buyer against all suits,
actions, debts, accounts, damages, costs (including attorney's fees), losses and
expenses arising from or jut of any adverse claims, relating to Seller's title,
of any and all persons to or against said gas.
i
Each party warrants to the other that its (and/or its agent's) facilities
- utilized for the delivery and acceptsnee of gas hereunder are wholly intrastate
facilities and are not subject to the Natural Cas Act of 1938, as heretofore
amended. As a material representation, without which both parties would not have
been willing to execute this Contract, cacti party warrants to the other party
that it (and its agents) will take no action or commit an act of omissiot, which
will subject its (or its agent's) facilities, this transaction, or the other
party's (or the other party's agent's) facilities, to jurisdiction of the Federal
Energy Regulatory Commission (FERC) or its successor governmental agency under
the terms of the Natural Gas Act of 1938, as amended. The gas delivered and
accepted hereunder shall not have been nor shall be sold, transported or
otherwise utilized in Interstate commerce in a manner which will subject either
{ party (or their agents) to the terms of the Natural Gas Act of 1936, as amended.
In addition to and without excluding any remedy the aggrieved party may have at
law or in equity, the party who breached the above warranties and representations
4
I
T
S
Y
ICI
li
shall be liable to the aggrieved party (and the aggrieved party's agent) for all
damages, injury and reasonable expense the aggrieved party (and the aggrieved
party's agent) may sustain by reason of any breach hereof. Further, should
either party (or their agents) perform any act, or cause any act to be performed,
E at any time, that results in any gas covered hereunder becoming regulated by or
subject to the jurisdictional consequences of the FERC or successor governmental
authority contrary to this Contract, this Contract shall be deemed of its own
terms to terminate on the day before the date of such occurrence; provided,
however, such termination shall never be construed to impair any right arising
under this paragraph.
Buyer and Seller agree that this Contract will be construed according to the
laws of the State of Texas.
IX.
force Halevre. In the event of either party hereto being rendered unable, wholly
or in part, by force majeure to carry out its obligations under this Contract,
other than to make payments due hereunder, it is agreed that on such party's
giving notice and full particulars of such force majeure by written notice or
by telegraph to the other party as soon as possible after the occurrence of the
cause relied on, then the obligations of the party giving such notice, so far
as they are affected by such force majeure, shall be suspended during the
continuance of any inability so caused but for no longer period, and such cause
shall as far as possible be remedied with all reasorable dispatch. The term
'force majeure', as employed herein, shall mean acts of Cod; strikes, lockouts,
3 or other industrial disturbances; acts of the public enemy, were. blockades,
insurrections, civil disturbances and riots, and epidemics; landslides,
lightning, earthquakes, fire, storms, floods, and washouts; arrests, orders,
directives, restraints and requirements of the government and government
agencies, either federal or state, civil and military; any application of
governmental conservation rules and regulations; explosions, breakage or accident
to machinery or lines of pipe; shutdowns of equipment or lines of pipe for
inspection, maintenance or repair; shortage of water, freezing of wells or lines
of pipe; partial or entire failure, depletion or loss of wells or sources of
supply of gas; inability or refusal of Buyer's Agent to accept deliveries of
gas from Seller or redeliver gas to the Point(s) of Delivery, cancellation by
Buyer's Agent of Buyer's transportation agreement with Buyer's Agent for any
reason whatsoever; and any other causes, whether of the kind enumerated or
otherwise, not reasonably within the control of the party claiming suspension.
It is understood and agreed that the settlement of strikes or lockouts shall be
entirely within the discretion of the party having the difficulty, and that the
above requirement that any force majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demand of the opposing party when such course is or is deemed to be
inadvisable or inappropriate in the discretion of the party having the
I difficulty.
j 5
II
i
i
y
s
X.
Recitals and Covenants. The intent and purpose of this Contract is to enable
Buyer to purchase gas from a Fource other than its traditional utility source
of supply. Buyer is not relying on and will not rely on any expectation of sales
or service from Seller except as specifically provided in this Contract. It Is
Intended that Seller's furniahing of gas to Buyer be solely and strictly under
the quantity, terms, and other provisions of this Contract.
Buyer believes that it is in its beat interest to purchase gas under the terms
and conditions of this Contract and without the benefit of the duties,
obligations, and conditions of sale and service which could apply to Seller were
_ Seller deemed to be a utility. Buyer recognizes and agrees that in purchasing
% gas under these conditions it will not have available certain legal remedies
against Seller which it would have were Seller to be a utility or, even if Seller
were deemed to be a utility, were gas to be purchased from Seller under
circumstances and conditions other than under this Contract.
Buyer agrees and stipulates that, in making sales to B,%yer under this Contract,
Seller Is neither the sole nor exclusive source of supply of gas to Buyer nor
will Seller be engaged In the making of a city gate sale to Buyer,
Buyer hereby waive3 any and all rights to assert or claim that Seller has any
obligations whatsoever to provide natural gas sales or service to Buyer other
than under the terms and conditions of this Contract, or that any obligations
will accrue by virtue of sales or service under this Contract. This waiver
specifically includes, but is not limited to, any claim or assertion that any
cessation of sales or service provided by Seller to Buyer, provided such
cessation is in conformance with the provisions of this Contract, constitutes
I abandonment of Buyer or that Seller must receive permission for such cessation
from any governmental authority.
Should, for any reason, Seller ever be deemed to require the permission of any
governmental authority for the cessation, whether of a permanent or temporary
nature, of service and sales to Buyer as provided for in this Contract, Buyer
agrees that such cessation is in the public interest and that such permission
should be granted and/or deemed granted at the time of execution of this
Contract.
XI.
hiscellaneous. Buyer's purchase of said gas under this Contract shall be subject
to all terms and conditions of any release(s) applicable to said gas from prior
contracts of other purchasers.
Waiver by Seller of a particular right or default hereunder shall not be deemed
a waiver of other rights or defaults whether similar or dissimilar,
This Contract supersedes and replaces all prior contracts between the parties
hereto, or their respective predecessors in interest, for gas at the location
and for the purposes herein designated, and constitutes the entire contract
between the parties.
I 6
f
{
i
Il '
s.
w .ry'
~Fd A+
1
This Contract constitutes the entire agreement between the parties covering
the subJect matter hereof, and there are no agreements, modification., condition.
or understandings, vrltten or oral, expressed or implied, ertelnin
cubject matter hereof which are not referenced or contained herein,
p g to the
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Contract In duplicate origlnals as of the day and year first herein written.
BUYER:
SEMER:
CITY OF DENTON
ENSERCH CAS CONpANy
By
By:----
Title:
Title:
ATTEST:
j i
i
I
i
7
i
I
i
I J
k
}
i
i {f
I
I
1i
I
I
i ~
1I
1
i
i
I
III
i
I
f
i
f
279SL
ORDINANCE NO.
AN ORDINANCE AWARDING A CONTRACT FOR THE PURCHASE OF GAS FROM
LONE STAR GAS COMPANY; PROVIDING FOR THE EXPENDITURE OF FUNDS
THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City has solicited, received and tabulated com-
petitive Eealed proposals for the purchase of gas in accordance
with the procedures of state law and City ordinances; and
WHEREAS, the City Manager has reviewed and recommended that
the proposal of Lone Star Gas Company ,is the lowest responsible
proposal services as shown in the Bid Proposals submitted
therefor; and
WHEREAS, the City Council has provided in the City Budget for
the appropriation of funds to be used for the purchase of gas
herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the proposal of Lone Star Gas Company is
heresy accepted and approved as being the lowest responsible
E proposal for the items set forth in the proposal.
SECTION II. That the City Manager is hereby authorized to
execute a contract with Lone Star Gas Company for the purchase of
gas under the conditions set forth therein, a copy of which is
attached hereto and incorporated by reference herein.
SECTION III. That by the acceptance and approval of the above
propose , t e City Council hereby authorizes the expenditure of
funds therefor in the amount and in accordance with the written
contract made pursuant thereto.
SECTION IV. That this ordinance shall become effective
imme ate y upon its passage and approval.
PASSED AND APPROVED this the day of _
1989.
~i F97-SfiEMNE , MAYOR
ATTEST:
I
JENNLYM j , CITY-3'ECRE~'AAY I
APPROVED AS TO LEGAL FORM:
DEBRA A. DRAYOVITC' CITY ATTORNEY
BY:
a
I
i
~My 1M5 Sa'L. M/~
Il
I CAS SALES CONTRACT
BETVEEN
LANE STAR CAS COMPANY
AND
CITY Of DENTON, TEXAS
DATED JANUARY 1, 1989
t
i I
i
i
i
I
i
i
xx
• r°, soao~
TABLE OF CONTENTS
68T3SaLE PACE
I Definitions 1
II Subject !latter 3
III Quantity 3
IV Demand Charge 8
V Quality 10
VI Delivery and Connection Facilities 12
VII Measurement 13
VIII Price 16
1
IX Adjustment for Heating Value 19
X Reimbursement for Taxes and Rentals 19
XI Payment 22
XII Term 24
' XIII Force Majeure 24
r f
XIV Curtailment of Deliveries 26
XV Regulatory bodies 28
XVI Termination Privilege 28
i
XVII Intrastate Provisions 30
XVIII Warranty 31
XIX Right of Way 31
XX Indemnity 31
r~ XXI Waiver of Breach 32
XXII Assignment 32
XXIII Miscellaneous 32
' I
i
II
f
GAS SALES CONTRACT
THIS CONTRACT, made, entered into, and effective on this 1st day of
January, 1989, by and between LANE STAR GAS COKPANY, a division of ENSERCH
Corporation, a Texas Corporation, hereinafter referred to as "Seller", and the
CITY OF DENTON, TEXAS, a municipal corporation, hereinafter referred to as
"Buyer",
W I T N E S S ETHo
WHEREAS, Buyer owns and operates an electric generating station known
and designated as the Spencer Generating Station, located in Denton County,
Texas, is hereinafter referred to as "Buyer's P1Ant" (or "Plant''); and
h WHEREAS, Buyer desires to be assured of an adequate supply of natural
gas for the operation of said Plant, and Seller desires to sell gas to Buyer
E under the terms and conditions of this Contract;
I I NOW, THEREFORE, in consideration of the mutual covenants and agreements
? herein contained, togather with other good and valuable consideration, the
I!
receipt and sufficiency of which Is hereby eeknowledged, Seller and Buyer do
hereby contract and agree with each other as follows:
I
ARTICLE I
DEFINITIONS
For the purposes of this Contract, unless the context of the instrument
requires otherwise, the following definitions shall be applicable:
1, 'Gas' shall mean natural gas produced from gas wells, vaporized natural
gas liquids, gas produced in association with oil (casinghead gas) and/or
the residue gas resulting from processing casinghead gas and/or gas well
gas.
j I
1
i
2. "Day" shall mean the 24-hour period beginning at 1:00 a.m., Dallas time,
on one calendar day and ending at 7:00 a.m., Dallas time, on the following
calandrr day.
3. "Month" or "Billing Month" shall mean the period beginning at 7:00 a.m.,
Dallas time, on the first day of a calendar month and ending at 7:00 a.m.,
Dallas time, on the first day of the succeeding calendar month.
( 4. "Contract Year" or "Calendar Year" shall mean a period of twelve (12)
consecutive months beginning at 7:00 a.m., Dallas time, on January 1 of
?
each calendar year of the term hereof and ending at 7:00 a.m., Dallas time,
on the same date of each succeeding year during the term hereof.
i
5. "Mcf" shall mean one thousand (1,000) cubic feet of natural gas.
6. The tern "Btu" as used herein shall mean British Thermal Unit and, where
i
appropriate, the plural thereof. The term "MMBtu" shall mean one million
I
(1,000,000) Btu.
7. "Heating Value" or "Neat Content" shall mean the total heating value
i
j expressed in Btu per cubic foot (gross heating value) of the gas delivered
1. hereunder, and shall be determined at a temperature of sixty degrees (60°)
i
Fahrenheit, saturated with water vapor and under a pressure equiv410nt to
that of thirty (30) inches of mercury at thirty-two degrees (321) Fahrenheit
converted to base conditions of sixty degrees (60°) Fahrenheit and an
absolute pressure of fourteen and sixty-five one-hundredths (14.65) pounds
per square inch and adjusted to reflect actual water vapor content.
8. "Pats" shall mean pounds per square inch absolute,
9. "Psig" shall mean pounds per square inch gauge.
i
2
i
I
10, "Transportation Agreement" shall mean chat certain Gas Transportation
Agreement between Buyer and Seller dated January 1, 1989.
11. "Transfer Agreement' shall mean that certain Transfer of Gas Agreement
between Buyer and Seller dated May 1, 1989.
ARTICLE II
SUBJECT MATTER
Subject to the terms and provisions hereinafter set out and to the extent
of and in accordance with the terms, conditions and limitations hereinafter
stipulated, Seller agrees to sell and deliver to Buyer and Buyer agrees to
purchase and receive from Seller, at the point of delivery herein provided for,
natural gas for that portion of the natural gas fuel requirements of Buyer's
Plant during the term specified herein, including but not limited to Article III
+ hereof, hereinafter called "Buyer's Fuel Requirements",
ARTICLE III
QUANTITY
1. The quantity of gas, computed on an MMBtu basis, to be purchased and sold
hereunder shall be a volume of gas equal to that amount of Buyer's Fuel
Requirements specified by this Contract for Its Plant, up to but not in
excess of Buyer's Maximum Hourly Volume, Maximum Daily Volume and Maximum
Annual Volume for each Contract Year, as such requirements are set forth
below:
r` For Each Contract Year
Maximum Hourly Volume 1,500 MMBtu
Maximum Daily Volume 30,000 MMBtu
Contract Year Beginning
Januarv 1. 1989
i
Maximum Annual Volume 1,000,000 MMBtu
1 l
I
i
3
I
I
2.(a). On or before September 1 of each Contract Year during the tern of this
Contract, Buyer shall submit written notice to Seller specifying the
Maximum Annual Volume obligation for the immediately following Contract
Year. The Maximum Annual Volume designated for 1990 and each
succeeding Contract Year shall not be greeter than one hundred twenty-
five percent (1251) nor less than seventy-five percent of the Maximum
Annual Volume designated for the immediately preceding Contract Year;
f ! however, Buyer may, once and only once during the term hereof, increase
i the Maximum Annual Volume for any one Contract Year to equal more than
one hundred twenty-five percent (1251) but not more than one hundred
' fifty percent (1501) of the immediately preceding Contract Year's
~ Maximum Annual Volume. In no went will Buyer ever establish a Maximum
Annual Volume of less than one million (1,000,000) MMBtu for any
Contract Year.
1
(b). If, during any Contract Year, Buyer fails to submit a maximum Annual
Volume as provided for herein, Buyer's Maximum Annual Volume for the
next succeeding Contract Year shall be equal to the Maximum Annual
i
Volume in effect for the preceding Contract Year,
~,\y (c). Notwithstanding anything to the contrary contained herein, nothing in
this Article or any other provision of this Contract shall prevent
Seller from jelling and delivering to Buyer hereunder quantities of
gas in excess of the volumes Seller is obligated to sell and deliver
hereunder, which Seller has available and desires to sell and which
Buyer desires to purchase.
3. Buyer agrees that all of the gas purchased hereunder will be used or
consumed in and for the operations of Buyer's Plant, and that no part of
4
I
f
such gas will be retold or used for any other purposes, except as otherwise
expressly provided in the Transfer Agreement.
4(a). Should Buyer, during any Contract Year beginning on or after January
1, 1990, receive s bona fide written offer to sell and deliver gas
directly to Buyer's facilities (which serve Buyer's Plant) through a
I
pipeline other than Seller's pipeline and at a price (including taxes,
- transportation and all other costa necessary for delivery of gas to
Buyer's facilities which serve Buyer's Plant) lower than Seller's then
current price (including taxes, transportation and all other costa
necessary for delivery of gas to Buyer's facilities which serve Buyer's
I
Plant) per MMBtu, Buyer may purchase and receive natural gas from such
other person, firm, or corporation in accordance with such offer (such
i
purchases herein referred to as 'Supplemental Volumes'); provided,
I
however, the total of such Supplemental Volumes during such Contract
k Year do not exceed the following volume limitations (herein referred
to as 'Maximum Supplemental Volume');
(i) For the Contract Year beginning January 1, 1990, and each Contract
Year thereafter during the term hereof, Buyer may receive
1 Supplemental Volumes not to exceed fifty percent (501) of the
Maximum Annual Volume in affect for such Contract Year.
(!i) Notwithstanding anything to the contrary contained herein, if
Buyer notifies Seller as provided in paragraph 2(a) of this
Article that it desires to increase its Maximuo Annual Volume for
any one Contract Year herein to equal more than one hundred
twenty-five percent (1251) but not more than one hundred fifty
percent (150!) of the immediately preceding Contract Year's
I
5
I
i
I
I Maximum Annual Volume, then for such Contract Ye, r and each
Contract Year thereafter the Maximum Supplemental Volume
limitation specified in this paragraph 4(a) shall be reduced by
twenty percent (201).
(b). Notwithstanding the provisions of paragraph 4(a) above, prior to
entering into any agreement for the purchase of such Supplemental
Volumes, or prior to entering into any amendment to nn agreement under
which Buyer may purchase Supplemental Volumes, Buyer shall notify
Seller in writing of the terms and conditions of the bona fide offer
for such proposed Supplemental Volumes (including a complete facsimile
of the offer which is presented to the Denton City Council for much
proposed Supplemental Volumes). If Seller (or its assignee) (i)
within five (5) days of receiving Buyer's said notice if the delivery
period of such notice is one (1) monch or less, (it) or within thirty
I
(30) days of receiving Buyer's said notice if the delivery period of
such notice is greater than one (1) month, offers in writing to sell
and deliver gas to Buyer all or any portion of the quantity offered
I
under such bona fide offer, under similar terms and conditions as
j stated in Buyer's said notice to Seller, at the same or lower price
(including taxes, transportation and all other costs necessary for
delivery of gas to Buyer's facilities which serve Buyer's Plant) per
MMBtu, then Buyer shall purchase from Seller (or its assignee) a
quantity of gas equal to the lessor of (i) the quantity offered in
writing by Seller (or its a uignes), (it) a quantity equal to no less
I
than 501 of the quantity offered for purchase under the aforesaid
bona fide offer, or (iii) a quantity equal to no less than fifty
6
I
percent (50W) of the applicable Maximum Supplemental Volume limitation
set forth in the preceding paragraph 4(a) above, under Seller's (or
its assignee's) aforesaid offered terms and conditions rather than
under the aforesaid bona fide offer. If Seller (or its assignee)
F falls to meet or better the aforesaid bona fide offer as provided
above for all or a portion of the quantities offered under the bona
fide offer or if Buyer and Seller (or its assignee) cannot agree to
1 some other mutually agreeable offer within the said five (5) or thirty
(30) day period (whichever is applicable), nothing shall limit Buyer's
purchases of Supplemental Volumes under such bona fide offer provided
that during each Contract Year herein the sum of (i) all Supplemental
~ I
Volumes purchased by Buyer under any and all such bona fide offers
and (ii) all purchases of gas by Buyer from Seller (or its assignee)
under this paragraph 4(b), never exceeds the Maximum Supplemental
Volume for such Contract Year herein.
(c). If at any time during the term of the bona fide offer for Supplemental
Volumes, the terms and conditions of such offer are changed in any
manner from the written terms and conditions which Buyer provided
Seller, then Buyer shall notify Seller immediately of such change,
Once Buyer has made such notification to Seller, then Seller (of its
assignee) shall have the right to offer to sell and deliver gas to
Buyer for all or any portion of the quantity offered under the new
terms and conditions of such bona fide offer pursuant to the same
procedures as provided in the preceding paragraph 4(b).
j (d). In the event Buyer enters into agreement(s) with other patty(s) for
the purchase of Supplemental Volumes as set forth in this Article,
7
t
E
Buyer shall give Seller, at Seller's request, prior verbal estimates
of such Supplemental Volumes which Buyer expeucs to purchase and
consume each month and shall notify Seller in writing of the actual
volumes of Supplemental Volumes purchased and consumed during such
month as soon as practicable after Buyer has knowledge of such
volumes.
(e). Buyer's Supplemental Volumes shall not reduce nor be credited toward
Buyer's Demand Charge as set forth in Article IV of this Contract
i
unless hereinafter speuified,
ARTICLE IV
DEMAND CHAROE
1. Without limiting any obligations or rights of Buyer and Seller hereunder,
Buyer agrees to pay an annual fee to Seller for the availability of gas fuel
service under this Contract (herein referred to as "Demand Charge). For
i
each Contract Year of the term herein, the Demand Charge shall be equal to
the Maximum Annual Volume in effect for such Contract Year multiplied by
the Demand Charge Rate of thirty-seven and one-half cents (37.5c).
2. Seller shall render to Buyer after the end of each Contract Year an invoice
for the uncredited Demand Charge rrplicabls for such Contract Year and Buyer
shall make payment to Seller for such amount no later than twenty (20) days i
from the date Seller's statement is deposited postage prepaid in the United
States mail.
I~ 3. The Demand Charge due and payable by Buyer to Seller at the end of each
Contract Year shall be credited as follows; For any Contract Year, Buyer
will receive credits toward such Contract Year's Demand Charge, as defined
herein, by deducting the following amounts from the applicable
Demand Charge
B
I
i
t
for such Contract Year,
(a). For Buyer's purchases from Seller during any Contract Year of the term
hereof, excluding any volumes Seller (or its assignee) delivers to
Buyer as allowed under paragraph 4(b) of Article III, Buyer will
receive a credit toward such Contract Year's Demand Charge equal to
the product resulting from the multiplication of the total of all
M"tus purchased from Seller hereunder during such Contract Year by
the Base Price applicable to each such KX3tu purchased, as such Baca
Price is defined in Article VIII.
(b)• For Buyer's purchases from Seller (or Seller's assignee) during any
1I g Y
Contract Year as allowed under the terms of Article III, paragraph
4(b), Buyer shall receive a credit toward the Demand Charge in effect
for such Contract Year during which such gas is purchased, and such
j credit shall be equal to the product resulting from the multiplication
I
of twenty-two cents (220 by the total of such purchases (in WBtu)
i
during such Contract Year. Notwithstanding anything to the contrary
~ j
contained herein, any gas delivered to Buyer through pipelines other
than Seller's pipeline shall never be credited in any way Buyer's Demand Charge. Y Y toward
(c). For gas volumes which Buyer pays a transportation fee for under its
Transportation Agreement with Seller during any Contract Year of tho
term hereof, Buyer will receive a credit toward such Contract Year's
Demand charge, and such credit shall be equal to the total of all
applicable 'Transportation Fee(s)" paid to Seller under the
` Transportation Agreement for transportation of such gas volumes during
such year; provided, however, for purposes of crediting hereunder,
i
9
I
i I
i
l
F
such Transportation Fee will not include any amounts paid by Buyer for
gas lost and unaccounted for, gas used as fuel and gas used in day-
to-day pipeline operations as described in the Transportation
Agreement.
4. Notwithstanding anything to the contrary contained herein, the combined
total amount to be credited toward Buyer's Demand Charge during any Contract
Year of the term hereof under paragraphs 3(b) and 3(c) of this Article IV
shall never exceed seventy-five percent (751) of the Demand Charge
applicable to such Contract Year.
S. Buyer shall never be entitled to recoup as as any of the
8 Y payments made to
Seller under the terms of this Article IV,
ARTICLE V
QDA1 ITT
1. Seiler shall deliver to Buyer natural
gas which is of merchantable quality
and commercially free from water, sand and other objectionable fluids,
solids or gas components, and shall most the quality requirements as
follows:
(a), shall have a heating value of not less than nine hundred fifty (950)
Btus per cubic foot nor greater than one thousand one hundred and
i
fifty (1,150) btus per cubic foot;
(b), shall contain no oxygen;
(c). shall have a temperature of not more than one hundred twenty degrees
(1200) Fahrenheit nor less than forty degrees (40e) Fahrenheit;
(d). shall not contain more than one-fourth (1/4) grain of hydrogen sulfide
per one hundred (100) cubic feet;
(e)• shall not contain more than five (5) grains of total sulphur including
10
i
i
I
1
i
1
F
V
r
I
not more than one (1) grain of mercaptan sulphur per c,.e hundred (100)
cubic feet;
M. shall not contain more than three percent 0%) by volume of carbon
dioxide,
(g), shall in no event have a water vapor content in excess of seven (7)
pounds per million (1,000,000) cubic feet of gas measured at a
pressure base of fourteen and sixty-five one•hundredtho (14.65) pounds
I per square inch absolute and at a temperature of sixty degrees (600)
Fahrenheit,
2. If at any time the gas fails to meet the quality specifications enumerated
herein, Buyer shall notify Seller and Seller shall make a diligent effort
€ to correct such failure, If Seller is unable to deliver gas according to
f such specifications, Buyer may refuse to accept delivery of gas for so long
as such conditions exist, If such a refusal is the sole cause and makes
it necessary for Buyer to completely and totally shut down Eta Plant and
Buyer gives Seller written nor ice of the occurrence of such plant shutdown,
then if Seller fails to correct the quality problem within forty-eight (48)
hours of Seller's actual receipt of the aforesaid written notice and Buyer's
i
Plant has remained completely and totally shutdown during such forty-eight
(48) hour period, Buyer shall receive credit against the Demand Charge
applicable to such Contract Year of the term hereof, Said credit shall be
determined as follows: the Demand Charge applicable to such Contract Year
shall be divided by the number of days in such Contract Year and the
i
quotient shall be multiplied times the number of days during such Contract
Year that Buyer's Plant was so continually shutdown following the forty-
eight (48) hour periodts) described above.
I
~ 11
{
~l
ARTICLE VI
DELIVERY AND CONNECTION FACILITIES
The point of delivery of gas to be sold and dellveted by Seller to Buyer
hereunder shall be at the outlet side of Seller's regulating and metering
stations on the sites of Buyer's Plant or which may here&fter be installed
by Seller at locations which are mutually acceptable to Buyer and Seller,
Seller agrees that it will operate and maintain such regulating and metering
stations, as well as the necessary tap or lateral lines from its main
pipeline system to said regulating and metering stations; and Buyer agrees
i
I that it will furnish to Seller, without charge, suitable space at the point
of delivery for Seller's top and lateral pipelines, regulating and metering
statione and appurtenant equipment, and that Buyer will maintain the
i
necessary service lines to connect with Seller's lines at the outlet side
of Seller's regulating and metering stations. Buyer shall authorize no
I
person other than an agent of Seller, or a person otherwise lawfully
authorized, to tamper with, inspect, alter or remove Seller's facilities.
Seller shrill have free ingress and egress to and from Buyer's premisee for
the construction, maintenance, repair and replacement of Seller's property
located thereon, or for any purpose connected with supplying gas hereunder.
2. Seller shall deliver gas hereunder to Buyer at the point of delivery at
such reasonably steady pressures as may be designated by Buyer, or absent
such designation, at pressures which are sufficient to enter Buyer's Plant ,
against the prevailing pressures maintained therein by buyer; provided,
however, Seller shall not be required to doliver gas to Buyer at a pressure
1
in excess of 15 paig.
i I
i
i !
12
1
a
3. The title to and ownership of the gas delivered hereunder shall pass to
and absolutely vest in Buyer at the point of delivery herein provided. Each
of the parties hereto agrees to use reasonable efforts to promptly notify
the other party of any significant changes in operating conditions which
will affect the delivery and receipt of gas hereunder, and the reasons for
such significant changes. Notwithstanding anything contained herein to the
contrary, in no event shall Seller be required to install new facilities {
i
or to enlarge or modify its existing facilities in order to make deliveries 1
of gas to Buyer, except to the extent that such facilities are necessary
to deliver the Maximum Hourly Volume of gas hereunder.
4. Subject to the terms and provisions of this Contract, Seller and Buyer
recognize and agree the point of delivery described in this Contract may
be a point at which Seller delivers gas for sale or transportation under
other agreements with Buyer or under other agreements with parties other
A
~ f than Buyer. It is understood and agreed by the parties that the Maximum
I }sourly Volume and the Maximum Daily Volume set forth in Article III,
paragraph 1 is the cumulative maximum volume of gas which Seller is
obligated to deliver at such point of delivery on any given Day, under (i)
this Contract, (it) the Transportation Agreement herein described ani (iii)
any other delivery of gas to Buyer by Seller on behalf of a third party.
AATICLZ VII
MWURLMENT
1. For the purpose of this Contract the volumetric unit of measurement of gas
shall be one thousand (1,000) cubic feet at a pressure base of fourteen and
i
j i sixty-five ore-hundredths (14.65) pounds per square inch absolute and at
a temperature base of sixty degrees (601) Fahrenheit. Meter measurements
I
I
13
I
I
1
I
I
shall be computed by Seller into such units, a.fjvited for volume variations
due to pressure and temperature in accordance with the Ideal Gas Law, and
corrected for deviation using daily averages of recorded specific gravity
(determined to three (3) decimal places) and a value for atmospheric
pressure of fourteen and four tenths (14.4) pounds per square inch absolute.
2. The period during which gas is flowing shall be used in determining daily
averages of metered pressure, specific gravity, flowing temperature and
heating value.
3. The gas delivered hereunder shall be measured by means of measuring devices
of standard type with flange connections (installed in accordance with
current industry standards) which shall be operated and maintained by Seller
at its sole expense, and placed at the aforementioned point of delivery or
in as close proximity thereto as practicable. Motors, and other measurement
I
instruments and equipment, shall be tested and adjusted for accuracy monthly
j 1 by Seller at Seller's expense.
4. Buyer shell have strata to said metering equipment at all times, including
~ telemetry output signals j long as such access is at no cost to Seller,
I
but the maintenance, reading, calibration and adjustment thereof shall be
done only by t'ie employees or agents of Seller. Records from such metering
equipment shall remain the property of Seller and shall be kept on file by
Seller for a period of not leis than three (9) years. However, upon request
of Buyer, Seller shall make available to Buyer records from its metering
equipment, together with calculations therefrom, for Buyer's inspection and
verification, subject to return by Buyer within ten (10) days after receipt
` thereof,
S. Buver may, at its option and expense, install and operate meters,
14
i
Instruments and equipment to check Seller's meters, instruments and
equipment but the measurement of gas for the purpose of this Contract
shall be by Seller's meters only, except as hereinafter specifically
provided. The meters, instruments and equipment installed by Buyer shall
be subject at all reason0ole timos to inspection or examination of Seller,
but the maintenance, reading, calibration and adjustment thereof shall be
done only by Buyer.
rr.~ 6. Each party shall give to the other party notice of the time of all tests
of meters sufficiently in advance of such tests so that the other party
may conveniently have its representatives present; provided, however, that
if either party has given such notice to the other party and such other
party Is not present at the time specified, than the party giving the notice
I
may proceed with the test si though the other party were present,
7. Meter measurements comps,.ced by Seller shall be deemed to be correct except
where the measuring device is found to be inaccurate by as much as one
percent (11;, fast or slow, or to have failed to reLtster, in either of
which cases Seller shall repair or replace the meter. The quantity of gas
dslivsred while the meter was Inaccurate or failed to register shall be
f determined first by the reading of Buyer's check neter, if installed and
~j in good operating condition, or second, by correcting the error if the
percentage of error is ascertainable by calibration or mathematical
calculation. If it is not so ascertainable then it shall be determined by
estimating the quantity on a basis of deliveries under similar conditions
when the meter was registering accurately. Such adjustment or correction
shall be made only for one-half (1/2) of the period betwe-n the test in
which the inaccuracy was discovered and the previous test for accuracy;
I i
15
I
I
j
1
provided, however, such adjustment or correction period shall not exceed
ninety (90) days.
B. The daily average heating value and specific gravity of the gas delivered
hereunder, shall be determined at Seller's expense by the use of recording
devices of standard type, which shall be installed and operated by Seller.
Each device used to determine su:h average nesting value and specific
gravity shall be tested far accuracy by Seller at regular monthly intervals
and should any test show it to be inoperative or recording in error as much
as one-half of one percent (.OS%), plus or minus, proper correction shall
be made for the period during which the recorder was inoperative or
recording in error, and if this period cannot be ascertsinad, correction
shall be made to an average of the values recorded during the most recent
fifteen (15) day period prior to the previous test under similar conditions
of flow, and such device shall immediately be calibrated to measure as
j accurately as practicable. The degree of saturation by water vapor of the
! gas to be delivered hereunder shall be determined monthly by Seller, using
standard instr=onts and methods, and the results thereof shall be properly
i
taken into account in detnrmining the heating value of the gas delivered.
9, Seller will make available to Buyer, upon req:.est, a compositional analysis
of gas delivered by Seller to Buyer at the point of delivery hereunder.
ARTICLE VIII
PRICE
1. The price payable by Buyer for the gas to be delivered hereunder shall be
determined for each Billing Month by increasing the Base Price in effect
during such month, as set forth below in paragraph 2 of this Article VIII,
by an amount equal to the weighted average price per Mcf, as defined in
16
~I
i
paragraph 3 of this Article VIII, for all gas purchased by Seller during
such Billing Month; provided, however, that the price payable by Buyer for
the gas to be delivered by Seller to Buyer hereunder is subject to
adjustment for variations in the Btu heat content of the gas in the manner
and to the extent set out in Article IX hereof.
2. The Base Price per Mcf for gas to be delivered hereunder shall be as
follows:
/ (a). For the Contract Year beginning January 1, 1989 and ending December
( 31, 1989, the Base Price per Mcf shall be (i) forty-two cents (42C)
i
for gas delivered and received hereunder during the Billing Months of
January, February, March, November and December and (ii) thirty-eight
cents (38C) for the Billing Months of April through October.
(b). For each Contract Year beginning on or after January 1, 1990, both of
the aforesaid Base Prices shall escalate one cent (14) on January I
i i
of each such Contract Year.
3. The weighted average price of gas purchased by Seiler hereunder shall be
determined as follows:
(a). The term "weighted average price" of gas purchased by Seller shall
mean the weighted average price per one thousand (1,000) cubic feet
i
of all gas purchased by Seller during the Billing Month, computed to
the nearest one-hundredth of one cent ($.0001), and shall be
determined by dividing the total dollar amount paid or accrued on
Seller's books during such Billing Month for all gas purchased by
Seller by the total number of thousands of cubic feet of gas purchased
by Seller during such Billing Month, adjusted to the same pressure
base as gas sold hereunder, and shall include,, In addition to the cost
17
. I
t
of gas itself, all Class A Taxes, as hereinafter defined in Article
X hereof; provided, if any portion of the cost of gas (or if any Class
A Tax) which has been paid by Seller is refunded to Seller, or if
Seller is required by the terms of any gas purchase contract, or of
any agreed settlement of a disputed claim, or by a determination or
judgement of a regulatory body or court having or asserting
jurisdiction, to make retroactive payments with respect to gas which
~I has been or may be purchased by Seller, or if billing corrections are
made with respect to gas previously purchased by Seller, then such
l{ payments, refunds, or corrections shall be included In Seller's
determination of the weighted average price of gas for the month
1
during which any such payrenta, refunds or corrections occur.
F
(b)• It is recognized that soae of the gas delivered by Seller to Buyer
I
y hereunder during any month of the term hereof may be gas previously
purchased by Seller which is taken from one of its underground storage
i
i ~
reservoirs, but such gas shall not be considered in determining the
I weighted average price of gas purchased by Seller during such morth;
provided, however, that gas placed in storage by Seller for later
delivery to Buyer or to other customers of Seller shall be accounted
for as gas purchased during the month In which it :es actually
purchased by Seller.
4, If at any time following the execution of this Contract by the parties
hereto, Seller's standard method of determining its weighted average price
as described In paragraph 3(a) of Article VIII hereunder is changed from
an Mcf basis to an MMBtu basis under Seller's standard industrial contracts
I
as described in the Schedule of Industrial Rates-N. State of Texas, or any
I
18
I
i
i
I
f
replacement schedule, Seller will notify Buyer of such change and
incorporate that change into the method of determining Buyer's weighted
average price.
ARTICLE IX
ADJUSTMENT FOR MEATINO VALUE
If the weighted average heating value of the gas delivered by Seller to
Buyer during any month is less than one thousand (1,000) Btus per cubic foot,
the price payable by Buyer per Mcf of gas computed as provided in Article VIII
hereof shall be decreased one-tenth of one percent (0.1!) for each Btu below one
f
thousand (1,000) Btus per cubic foot; and if the weighted average heating value
of the gas so delivered during any month is more than one thousand (1,000) Btus
'I per cubic foot, the price payable by Buyer per Mcf of gas as provided in Article
it VIII hereof shrill be increased one-tenth of one percent (0.11) for each Btu above
f one-thousand (1,000) Btus per cubic foot for such gas so delivered during such
month.
ARTICLE X
REIMBURSEMENT FOR TAXES AND RENTALS
1. The term "tax" or "taxes", as used in this Contract, shall mean any kind
or character of tax (other than ad valorem, capital stock, general property,
income or excess profits taxes), license, fee, rental or charge of any
governmental authority, Including specifically, without limitation by
enumeration, any production, severance, gathering, transportation,
processing, compression, dedication, use, sales, delivery or gross receipts
tax, now or hereafter levied, assessed or made by any governmental authority
on the gas itself or on the act, right or privilege of production,
j severance, gathering, transportation, processing, compression, dedication,
~I
i
19
f
I
f
use, sale, handling or delivery of gas which is measured by gross receipts
or by the volume, value or sales price to Seller or Buyer of the gas in
question, but shall not include any value attributable to the liquid
hydrocarbons in said gas; provided, however, that the term "tax" or "taxes"
shall not be deemed to include any general franchise tax imposed on
corporations on account of their corporate existence or on their right to
do business within the State of Texas as a foreign corporation.
2. The terms "Class A Taxes", "Class B Taxes" and "Class C Taxes" as used in
this Contract shall have the following meanings, to wit:
(a). The term "Class A Taxes" shall be construed to mean all taxes, as
herein defined, which Seller pays for the account of or by way of
1 reimbursement to its gas suppliers with respwct to all gas purchased
by Seller.
(b). The term "Class B Taxes" shall be construed to mean all taxes, as 1
I herein defined, which are or may be levied upon, and/or paid by
Seller, with respect to the gas sold by Seller to Buyer hereunder,
exclusive of any Class A Taxes or Class C Taxes.
! I I
(c), The term "Class C Taxes" shall be construed to mean any license, fee,
rental or charge which is or may be levied or imposed upon by, and/or
paid by Seller to, any governmental authority for the use of its
public streets, alleys and thoroughfares in the conduct of Seller's
business, with respect to the gas sold by Seller to Buyer hereunder
and/or the gross receipts received by Seller from the sale of gas to
Buyer hereunder, or any sales or delivery tax which is or may be
levied or imposed upon, and/or paid by Seller, with respect to the gas
sold by Seller to Buyer hereunder and/or the gross receipts received
20
by Seller from the sale of gas to Buyer hereunder, exclusive of any
i
Class A Taxes of Class B Taxes.
' 3, Buyer agrees to reimburse Seller with respect to all Class B Taxes and
Class C Taxes, as herein defined, which are paid by Seller with respect to
that gas sold by Seller to Buyer hereunder, including any amounts due for
Demand Charges billed hereunder.
4. It is understood and agreed that the amount of reimbursement for all
existing, new, increased, or additional Class B Tsses and/or Class C Taxes
shall be determined by applying the rate of any such tax measured by gross
receipts, units of volume, value or sales price, to Seller's gross receipts
hereunder or to the volume, value or sales pcico respectively, of the, gas
delivered hereunder; provides, that in the event such taxes carriot be
i
directly related to the gas delivered hereunder or the gross receipts
I
received by Seller, as hereinabove provided, the amount of reimbursement
to Seller shall be in the same proportion to the volume of gas sold
i
hereunder as the total amount of such taxes is to the total Volume of gas
sold by Seller to all its customevs,
i
3 S. It is understood and agreed that in the event any tax, charge or rental
for which Seller has been reimbursed or paid by Buyer hereunder is
subsequently declared unlawful, Seller, upon recovery of the amount of such
unlawful tax, charge or rental, shall refund to Buyer the entire amount of
such reimbursement or paymn,,t made by Buyer to Seller which is recovered
r by Seller; provided, however, that Seller shall not be required to make a
refund to Buyer with respect to any tax, charge or rental so recovered after
I
this Contract has terminated unless Seller has recovered such tax, charge
I F
or rental prior to such termination.
i
21
6, Any amounts due from Buyer to Seller as reimbursement for taxes, charges
,)r rentals, in accordance with the provisions of this Article X, shall be
paid by Buyer to Seller at the time and in the manner that invoices for gas
delivered hereunder are payable, as provided in Article XI hereof.
ARTICLE XI
PAYMENT
1. For the purpose of billing and accounting for gas delivered hereunder, the
V 1
terms "Day, "Billing Month", and "Contract Year" shall be as defined in
Article I hereof.
i
2. On approximately the tenth (10th) Day of each calendar month, Seller shall
M
render to Buyer at its office In Denton, Texas, statements of the amount
of gas delivered by Seller to Buyer at the point of delivery during the
IF j preceding Billing Month, and shall also render an invoice for the gas sold
I
hereunder and an allocation statement for all the gas so delivered, In
i
computing such invoice for gas sold hereunder by Seller to Buyer during any
Billing Month, the weighted average price of gas purchased by Seller during
such Billing Month, as determined in accordance with paragraph 3 of Article
VIII, shall be used. Buyer shall make payment to Seller at Seller's offtes
in Dallas, Texas for all gas delivered hereunder to Buyer during the
preceding Billing Month by no later than twelve (12) days from the date
Seller's statement is deposited postage prepaid in the United States mail
or in cue of hand delivery, within ten (10) days from the date Seller's
i
statement is delivered to a representative of Buyer from a representative
of Seller,
{
3. If Buyer should fail to pay any amount owing to Seller when the same is
due, interest thereon shall accrue at the rate of eighteen percent (181)
i
I
22
r
~I I
1
i
Per annum from the date when such amount is due until sane is paid;
provided, however, no interest shall accrue on unpaid amounts whon failure
to make payment is the result of ■ bona fide dispute between the parties
hereto regarding such amounts and Buyer timely pays all amounts not in
dispute. If such failure to pay continues for sixty (60) days, Seller may,
in the absence of any bona fide dispute as to the amount or the time when
rams was due, suspend deliveries of gas hereunder, and the exercise of such
right shall be in addition to any and all other remedies available to
Seller; provided, however Seller shall be entitled to suspend deliveries
of gas hereunder in the event Buyer fails to pay any and all amounts not
in dispute.
4. Each party shall have the right at reasonable hours to examine the books
and records of the other party to the extent necessary to verify the
accuracy of any statement, payment, calculation of determination made
pursuant to the provisions hereof. If any such examination shall reveal,
or if either party shall discover, any error or inaccuracy in its own or
i
the other party's statements, payments, calculations or determinations, then
proper adjustments and corrections shall be made as promptly as practicable
thereafter, provided, however, that no adjustment or correction shall be
i
made with respect to any error or inaccuracy which occurred more than two
(2) years prior to the discovery thereof,
S. All notices, billings, and payments provided for herein shall be in writing
and shall be deemed to be delivered (except for when actual receipt of
notice is expressly required herein) when properly addressed to the other
party as indicated below, and deposited in the United States mail, postage
prepaid,
1 I
j
23
i
I
j
i
I
PIY{r
IN I
SELLER;
BUYER: ~
4=1111 Lone Star Gas Company
301 South Harwood Street City of Denton, Texas
Dallas, Texas 75201 Municipal Building
Attn: Utility Related Denton, Texas 76701
Credit Croup Attn: Executive Director
II261£Ct: of
Lone Star Cam Company Utilities
301 South Harwood Street
Dallas, Texas 75201
Attn: Cam Marketing Division
I ~
ARTICLE ZII
TERM
Subject to the ocher terms and provisions hereof, this Cont
be effective from the date set forth hereinabove and sh tact shall
all thereafter continue
and remain in full force and effect for a period and term extending to twelve
(11:00) o'clock midnight on December 31, 1993 and year to
year thereafter until
cancelled b+ either party upon one hundred and twenty (120) days prior written
notice to the other party,
ARTICLE ZIII
FORCE MAJEURE
1 In the event Of either party hereto being rendered unable, wholly or in
I
part, by force na)eure to carry out its obligations untir this Contract,
other than to make payments due hereuudar, it i.oi agreed that on such party
giving notice and full particulars of such force majeure in writing to the
other party as soon as possible after the occurrence of the cause relied
on, then the obligations of the Party giving such notice, so far as they
eta affected by such force majeure, Shall be suspended from the inception
end during the continuance of any inability so caused but for no longer
14
I
I
d
period, and such cause shall be as far rs possible remedied with all
reasonable dispatch. The term 'force majeure• as employed herein shall mean
acts of Cod, strikes, lockouts or other industrial disturbances, acts of
the public enemy, wars, blockades, insurrections, riots, epidemics,
landslides, lightning, earthquakes, fires, storms, floods, washouts,
arrests, orders, directives, requirements and restraints of governments and
governmental agencies, either federal or state, civil and military, any
application of governmental conservation rules and regulations, civil
disturbances, er.plosions, breakage cr accident to machinery or lines of
pipe, the necessity for making repairs to or alternations of machinery,
equipment or lines of pipe, breakage of transmission lines, failure of
I~ II`
olectric equipment due to sleet, ice or other unavoidable causes, accidents
to or failure of electric substations, transformers or switching devices,
i shortage of water, freezing of gas wells or lines of pipe, partial or entire
I
failure or loss of wells and/or sources of gas supply, and any other causes,
whether of the kind herein enumerated or otherwise, not within the control
of the party claiming suspension and which by the exercise of due diligence
such party is unable to prevent or overcome. Such tom shall also include
the inability to acquire, or the delays in acquiring, at reasonable cost
and after the exorcise of reasonable diligencs, any servitudes, right of
way grants, permits or licenses required to be obtained to enable a party
to fulfill its obligation hereunder,
It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the dircration of the party have the difficulty,
and that the above requirements that any force majeure shall be remedied
with all reasonable dispatch shall not require the settlement of strikes
it
k 2S
I
i
I
or lockouts by acceding to the demands of opposing party when such course
is inadvisable in the discretion of the party having the difficulty.
ARTICLE SIV
CURTAILMEN7 OF DELIVERIES
1. Seller does not guarantee a continuous, uninterrupted supply of gas to
Buyer hereunder and, subject to the provisions hereinafter set forth in
this Article XIV, Seller shall have the right to interrupt or curtail the
r supply of gas to Buyer, in whole or in part, if in the judgment of Seller
a continuance of the supply of gas to Buyer under this Contract would
jeopardize or threaten service to Seller's domestic, commercial or
industrial customers who are accorded a higher priority of service by the
E Railroad Commission of Texas. Notwithstanding anything to the contrary
contained herein, refusal or inability by Seller to supply gas to Buyer in
I
excess of Seller's obligations provided for in Article III herein shall not
i
constitute a curtailment of the supply of gas to Buyer hereunder for
purposes of paragraph 4 of this Article XIV.
` 2. Buyer and Seller recognize the fact that each is engaged in rendering a
service which is essential to the public health and safety and both consider
the continuity of Buyer's fuel supply essential to the public welfare;
therefore Seller agrees to exercise due diligence in making reasonable
advance preparations to enable it to provide reasonably continuous service
to Buyer, and Buyer agrees that it will provide an adequate quantity of
standby fuel and equipment to meet its fuel requirements during periods when
i
the gas supply hereunder may be curtailed pursuant to this Article XIV.
3. Within approximately ten (10) days after the end of any curtailment of gas
deliveries by Seller, Buyer shall notify Seller in writing regarding the
I
26
I
Ii
i
4
amount of gas which was actually curtailed for any reason, including force
majeure, and the details of the computation of such amount, and Buyer's
determination of the amount of such curtailment shall become ff-,al and
binding on both parties unless protested in writing by Selle! within ten
(10) days after receipt by Seller of such notification.
4. Notwithstanding anything to the contrary contained herein (except for the
provisions of paragraph 1 of this Article XIV), in case of interruption or {
curtailment of service, as provided for in this Article XIV, including
curtailment by reason of force majeure as defined in Article XIII hereof,
i
the amount of gas which was actually curtailed during any Contract Year
` shall be added to the amount of gas actually purchased and received by Buyer
during such Contract Year for the purpose of determining Buyer's credits
i
{ against the Demand Charge applicable to such Contract Year, as calculated
1 in accordance with the provisions of Article IV, paragraph 4(a) of this
1 Contract; provided, however, only gas curtailed under this Contract shall
1 receive credit against the Demand Charge for any Contract Year of the term
hereof.
5. Buyer and Seller recognize the fact that Buyer requires one million
j
(1,000,000) cubic feet of gas each day for plant protection gas, and Buyer
and Seller agree that during periods of curtailment Buyer shall be allowed
to take one million (1,000,000) cubic feet per day for plant protection gas;
provided, however, that Buyer shall not be allowed to take such gas during
periods of time in which it is necessary for Seller to curtail the supply
I
of gas to other industrial customers of Seller in the same curtailment zone
4 in which Buyer's Plant is located who are accorded by Seller a priority of
i
{ service equal to that provided in Railroad Commission of Texas Gas Utilities
27
i
i
Docket No. 446 for service to "(2). Large commercial (100 Mcf or more on
a peak day) and industrial requirements for pilot lights and plant
protection gas" under category "B. Industrial Rate 1."
ARTICLE EV
REGMATORY BODIES
1. This Contract and all operations hereunder are subject to the applicable
federal and state laws and the applicable ordinances, orders, rules and
regulations of any local, state or federal governmental authority having
or asserting jurisdiction; but nothing contained herein shall be construed
as a waiver of any right to question or contest any such law, ordinance,
order, rule or regulation in any forum having jurisdiction over same.
2. In the event either Buyer or Seller shall be required by a judgment or
11
order of any governmental authority having or asserting jurisdiction to
II
either pay or charge prices for gas sold by Seller to Buyer hereunder which
are higher or lower than the prices stipulated or provided for herein with
I respect to gas sold by Seller to Buyer hereunder, the party adversely
affected shall have the option of cancelling this Contract upon giving the
other party written notice of its intention to do so vithin ninety (90) days
after the date of such judgment or order, which cancellation shall become
effective at the end of six (6) months from and after the date of such
notice.
ARTICLE EVI
TERAINATION PRIVILEGE
1. If either party hereto shall fail to perform any of the covenants or
obligations imposed upon it under and by virtue of this Contract (except
where such failure shall be excused under any of the provisions of this
28
1
j
Contract), then in such event the other party may, at its option, terminate
this Contract by proceeding as follows; The party not in default shall
cause a written notice to be served upon the party in default, stating
specifically the cause for terminating this Contract and declaring it to
be the intention of the party giving the notice to terminate the same;
whereupon, the party in default shall have thirty (30) days after the actual
receipt of this aforesaid notice in which to remedy or remove the cause or
causes of default stated in the notice of termination, and if within said
period of thirty (30) days the party in default does so remedy and remove
said cause or causes then such notice shall be nullified and this Contract
shall continue in full force and effect. In case the party in default does
not so remedy and remove the cause or causes of default within said period
of thirty (30) days then this Contract shall terminate and become null and
void upon the expiration of said period.
2. Should Buyer obtain from any court, administrative or regulatory authority
an order directing Seller to continue gas service after expiration of this
Contract, or after Seller's termination of this Contract or gas service
hereunder pursuant to any provision contained herein, such continued gas
service shall be at a price and upon terms mutually agreeable between Buyer +
i
and Seller unless said order contains a specific prohibition to the
contrary. J
3. Any cancellation of this Contract pursuant to the provisions of this Article
XVI shell be without prejudice to the right of the party not in default to
collect any amounts then due it and without waiver of any ocher remedy to
which the party not in default may be entitled for violation of this
Contract.
29
t
ARTICLE PVII
INTRASTATE PROVISIONS
Each party warrants to the other that its facilities utilized for the delivery
and acceptance of gas hereunder are wholly intrastate facilities and are not
subject to the Natural Gas Act of 1938, as amended. As a material
representation, without which both parties would not have been willing to execute
this Contract, each party warrants to the other party that it will take no action
--1 or commit an act of omission which will subject its facilities, this transaction ,
or the other party's facilities to jurisdiction of the Federal Energy Regulatory
Commission (FERC) or its successor governmental agency under the terms of the
Natural Gas Act of 1938, as amended. The gas delivered and accepted hereunder
shall not have been nor shall be sold, transported or otherwise utilized in
f interstate commerce in a manner which will subject either rerty to the terms of
the Natural Gas Act of 1938, as amended. In addition to and without excluding
~I
any remedy the aggrieved party may have at law or in equity, the party who
breached the above warranties and representations shall be liable to the
aggrioved party for all damages, injury and reasonable expense the aggrieved
party may sustain by reason of any breach hereof. Further, should either party
perform any act, or cause any act to be performed, at any time, that results in
any gas covered hereunder becoming regulated by or subject to the jurisdiction
of the FERC or successor governmental authority under the Natural v`as Act of
1938, this Contract shall be deemed of its own terms to terminate on the Day
before the date of such occurrence; provided, however, such termination shall {
I
never be construed to impair any right arising under this paragraph.
i
I
30
I
i
ARTICLE XVIII
WARRANTY
Seller hereby warrants to Buyer that at the time of delivery of gas hereunder
it will have good title or the right to deliver such gas, and that such gas will
be free and clear of all liens and adverse claims; and Seller agrees with respect
to the gas delivered by it, to indemnify Buyer against all suits, actions, debts,
accounts, damages, costs (including attorneys' fees), losses and expenses arising
from or out of any adverse claims, relating to Seller's title, of any and all
1
persons to or against said gas.
ARTICLE ELL
RIGHT-07-WAY
Buyer hereby grants to Seller the right to lay and maintain pipelines and to
i
install metering stations and other necessary equipment at the point of delivery,
as provided for in Article V hereof, solely for the purpose of supplying gas
hereunder,
and such lines and other equipment pieced by Seller at said point of
delivery shall remain the personal property of Seller, and, subject to the terms
of this Contract, may be removed by Seller at any time.
ARTICLE xx
j INDEMNITY
- ` As between the parties hereto, Seller shall be in control and in possession of
gas delivered hereunder and responsible for any damages or injuries caused
thereby until the same shall have been delivered to Buyer at the point of
delivery and shall indemnify and hold Buyer harmless from any damage or injury
caused thereby while same is in Seller's possession, except injuries and damages
which shall be occasioned proximately by the negligence of Buyer. After such
delivery of gas at the point of delivery hereunder, Buyer shall be deemed to be
i
31
I
i
In exclusive control and possession thereof and responsible fcr any injuries or
damages caused thereby, and shall indemnify and hold Seller harmless from any
damage or injury caused thereby while same is in Buyer'a control and possession,
except injuries and damages which shall be occasioned proximately by the
negligence of Seller.
ARTICLE XxI
WAIVER OF BREACH
No waiver of either party hereto of any one or more breaches, defaults or
right(s) under any provisions of this Contract shall operate or be construed as
a waiver (continuing or otherwise) of any other breaches, defaults or right(s),
I
k whether of a like or of a different character.
ARTICLE IIIII
I
f ASSIGNMENT
This Contract shall be binding upon the parties hereto and their respective
successors and assigns. All or any part of the rights or obligations of either
I
party hereto may be at any time assigned, but any such assignment, unless
accepted in writing by the other party hereto, shall not relieve the assignor
of its obligations hereunder, in the event the assignee shall fail to perform
the same in accordance with the terms hereto; provided, however, consent to such
assignment would not be unreasonably withheld,
ARTICLE ma
MISCELLANEOUS
1. The captions or headings preceding the various parts of this Contract are
inserted and Included solely for convenience and shall never be considered
i
or given any effect in construing this Contract or any part of this
Contract, or in connection with the intent, duties, obligations or
32
i
1
liabilities of the respective parties hereto.
2. Buyer and Seller agree that this Contract will be construed according to
the laws of the State of Texas.
3. This Contract constitutes the entire agreement between the parties covering
the subject matter hereof, and there are no agreements, modifications,
conditions or understandings, written or oral, expressed or implied,
pertaining to the subject matter hereof which are not referenced or
contained herein.
4. Nothing contained in this Contract shall prevent Seller from (i) terminating
or allowing the termination or expiration of any of its existing or future
gas supply contracts, or (ii) entering into any amendment, modification,
renewal, extension or replacement of, or any accord and satisfaction under,
I
any existing or future gas purchase contract or contracts between Seller
and its gas suppliers.
i
IN WITNESS WHEREOF, this Contract has been executed in duplicate
originals by the parties hereto on the day and year first herein written.
1
ATTEST: SELLER:
j LONE STAR CAS COMPANY,
{ f a Division of ENSERCH CORPORATION
JJ
By:
J. R. Moore
Vice President
ATTEST: BUYER:
CITY OF DENTON, TEXAS
By: j
I I
{ i
33
6
THE STATE OF TEXAS(
COUNTY OF DALLAS {
BEFORE HE, the undersigned authority >n this day personally appeared J.
R. Moore, Vice President of LONE STAR CAS COMPANY, a division of ENSERCH
CORPORATION, a Texas corporation, known to me to be the person and officer whose
name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in the
i
4 capacity stated, and as the act and deed of said corporation.
Given under my hand and seal of office this day of _
19
Notary Public in and for the State
of Texas. My commission expires
I
III E STATE OF ►EXAS
TH { I
COUNTY OF DALLAS {
BEFORE ME, the undersigned authority on this day personally appeared
s municipal
i
corporation, known to me to be the person and officer whose name is subscribed
i
to the foregoing instrument and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, in the capacity stated, and
as the act and deed of said corporation,
Given under my hand and seal of office this _ day of
19_.
:
Notary Public in and for the State
of Texas. Hy commission expires
i
II
34
TT f-
I
I
i
i
~ I
Y
O
' 2795L
ORDINANCE NO.
All ORDINANCE AWARDING A CONTRACT FOR THE TRANSPORTATION OF GAS TO
LONE STAR GAS COMPANY, PROVIDING FOR THE EXPENDITURE OF FUNDS
THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City has solicited, received and tabulated com-
petitive sealed proposals for the transportation of gas in accord-
ance with the procedures of sta:e law and City ordinances; and
WHEREAS, the City Manager l.as reviewed and recommended that the
proposal of Lone Star Gas Company is the lowest responsible pro-
posal services as shown in the "Bid Proposals" submitted therefor;
and
WHEREAS, the City Council has provided in the City Budget for
the appropriation of funds to be used for the transportation of
gas; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the proposal of Lone Star Gas Company is here-
by accepted and approved as being the lowest responsible proposal
for the items set forth in the proposal.
SECTION II. That the City Manager is hereby authorized to
execute a contract with Lone Star Gas Company for the transports-
tion of gas under the conditions set forth therein, a copy of
which is attached hereto and incorporated by reference herein.
SECTION III. That by the acceptance and approval of the above
proposal; the -City Council hereby authorizes the expenditure of
funds therefor in the amount and in accordance with the written
contract made pursuant thereto.
SECTION IV. That this ordinance shall become effective
immea ati eTy upon its passage and approval.
PASSED AND APPROVED this the day of , 1989. 1I
i
RAY , MAYOR
ATTEST:
~t
f
APPROVED AS TO LEGAL FORM:
f DEBRA A. DRAYOVITCH, CITY ATTORNEY
BY.
i
i
LS•T•MC•a
GAS TRANSPORTATION AGREEMENT
THIS AGREEMENT, made and entered into the let day of January, 1989 to be
effective with the date of initial deliveries hereunder, by and between LONE
STAR GAS COMPANY, a Division of ENSERCH Corporation, a Texas corporation,
hereinafter referred to as "Transporter" and CITY OF DENTON, a municipal
corporation, hereinafter referred to as "Shipper";
~iTfl~~S.ETti'
WHEREAS, Shipper owns or controls certain quantities of natural gas and
desires that Transporter (a) receive gas from Shipper (or its designeo) at the
Point(s) of Receipt hereinafter set forth and (b) deliver equivalent
l quantities of gas to the Point of Delivery hereinafter set forth; and
WHEREAS, Transporter owns and operates a pipeline system and is willing to
transport gas for Shipper under the terms and conditions hereinafter met forth;
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions herein contained, Transporter and Shipper hereby agree as follows:
ARTICLE I,
TY
MUM
1.1 Shipper represents that from time to time it may desire for
Transporter to receive and deliver gas at the points hereinafter set forth in
quantities as agreed to by the parties. It is agreed that the volume of gas to
be transported under this Agreement will >t exceed a daily volume of twenty-
five thousand (25,000) Mcf unless mutually agreed to by the parties hereto.
Transporter's obligation to deliver gas to Shipper under any and all agreements
between Transporter and Shipper, including but not limited to this Agreement,
shell not exceed a daily volume of thirty thousand (30,000) Mcf, It is further
i 1
f
i
4
hereby agreed that the calculation of all quantities of gas received and
i
delivered hereunder shall, for all purposes, including, but not limited to,
payment and determination of imbalance and retention volumes, be on an MMBtu
G basis. Transporter's receipt and delivery of such gas transportation volumes
I
will be done on a best efforts basis subject to Transporter's existing or
future pipeline capaLity, system transmissibility and operating capabilities;
and Transporter may refuse to transport gas hereunder if in the reasonable
opinion of Transporter to do so would adversely affect Transporter's sales
service to residential and commercial customers and other priorities of sales
service established by the Railroad Commission of Texas, or any successor
li
thereto. Transporter will in good faith endeavor to receive and deliver such
gas and will not arbitrarily and capriciously refuse to transport gas on behalf
it
of Shipper hereunder, 1
k 1.2 It is recognized that a day-to-day balance of gas received by
Transporter and delivered to Shipper may not be possible due to the inability
of the parties to control precisely such receipts or deliveries. However,
Transporter, to the extent practicable, will deliver to Shipper each day a
j quantir/ of gas equivalent to ninety nine percent (991) of tho quantity of gam
I !i
received by Transporter from Shipper (or its designee). 't'ransporter shall
retain the one percent (11) balance of the quantity of gas received as normal
gas lost, gas used as fuel and gas used in day-to-day pipeline operations (the
"Retention Volume"). An imbalance shall exist hereunder :here there is a
numerical difference between the quantity of gas delivered by Transporter to
Shipper; exclusive of (i) the total of the volumes of gas delivered under the
Cos Sales Contract between Transporter and Shipper dated January 1, 1989,
(hereinafter referred to as the "Gas Sales Contract") (ii) the total of any
volumes of gas delivered by Transporter to Shipper at the Point of Delivery
2
1
i
3
1
specified herein, under transportation agreements between Transporter and other
third parties, and (iii) the Retention Volume; and the quantity of gas received
by Transporter from Shipper (or its designee) during any month, and any such
imbalance shall be corrected insofar as practicable during th- month following
the month in which it occurs; provided, however, should Shipper fail, by the
end of any month of the term hereof to make up a prior month's imbalance due
Transporter, the cumulative imbalance, as hereinafter defined, owed Transporter
by Shipper shall be deemed to be sold to Shipper by Transporter in accordance
with the terms and conditions of the Cas Sales Contract during the most recent
Billing Month, and thereafter such cumulative imbalance shall be accounted for
and construed for all purposes as gas sold under the Gas Sales Contract, For
the purposes of this paragraph, the term "cumulative imbalance" shall mean the
sum of (i) any imbalance due Transporter and carried rorward from an
immediately preceding month to the next succeeding month, plus (it) any
i
imbalance due Transporter based on the delivery and receipt of gas hereunder
during such succeeding month,
1,3 At least two (2) working days prior to the first caIk~ndar day of each
month during the term hereof, Shipper and/or its designom shall notify
i Tra:,soorter of the volumes of gas Shipper nominates for transportation at each
~J
active Receipt and Delivery Point under this Agreement. Each such
transportation nomination shall contain Shipper's nominated mrtximuts quantities
for each applicable Receipt and Delivery Point, designation of the appropriate
contract(s) covering such gas, and the identity by name and telephone number of
individual(s) who have authority to confirm the nominated gas volumes at each
Receipt and Delivery Point. Timely nominations may be given 1,y verbal notice;
provided, however. Shipper shall furnish written confirmation thereof within
five (5) business days of the date of such verbal notice, Slipper and/or its
3
{
r
s
N
designee may revise nominated quantities on any business day upon verbal
I~ notice of any such reduction of nominated quantities. Such verbal notice must
be received by Transporter prior to 12:00 noon Dallas time of any business day
to be effective the next succeeding business day, If Shipper and/or its
designee does not furnish transportation nominations as required herein for
any month during the term hereof, Transporter may interrupt transportation
service hereunder for such month and such interruption of service shall not
prevent enforcement by Transporter of any other of Its legal rights or remedies
i
nor be construed as a breach of Transporter's obligations hereunder, if
Shipper and/or its designee does not nominate any transportation volumes as
foresaid for twelve (12) consecutive months during the term hereof,
Transporter, upon thirty (30) days' prior written notice to Shipper, may
terminate this Agreement and all rights and obligations hereunder; provided,
however, the obligation to make payment for monies due hereunder shall not be
extinguished. Shipper shall be entitled to assign any or all such nomination
obligation(s) to a third party ("Shipper's designee") upon thirty (30) days
I prior written notice to Transporter.
f
ARTICLE 11.
_LOCATIONS OF POINTS OF R 1PT AND OE iL trEAY
i
2,1 Receipt Point: Cos delivered by Shipper (or Its designee) to
Transporter hereunder shall be delivered at points which are sometimes herein
referred to as the "Receipt Point(s)" or "Point(s) of Receipt" and which are
specifically set forth and identified in Exhibit "A", entitled "Transporter
Receipt Point(s)", which is attached hereto and is hereby incorporated in this
Agreement and made a part hereof for all purposes. It is agreed that
additional points to be established hereunder, pursuant to paragraph 2,3, will
i
be subject to Transporter's approval which shall not be unreosonably withheld.
4
I
S
1
2.2 Delivery Point; Cos transported by Transporter hereunder shell be
delivered to Shipper (or for its account) where gas first passes from
Transporter's metering equipment into Shipper's Spencer Steam Electric Station
in Denton, Texas (sometimes herein referred to as "Point of Delivery") or other
i
i points as provided in the Transfer of Cos Agreement between Transporter and
Shipper dated May 1, 1969.
2.3 Additional Points: It is understood by both parties that Shipper and
Transporter may mutually agree in writing to establish other Receipt Points
hereunder; provided, however, Transporter shall not be obligated to establish
new Receipt Points more frequently than once every two (2) mnnths, unless due
to circumstances beyond Shipper's control Shipper (or its designee) is unable
to supply gas to the original Receipt Point(s) hereunder. In such event, and
upon receipt by Transporter of documentation satisfactory to Transporter
verifying such event and Shipper's inability to remedy same, Transporter may,
in its mole discretion, agree to establish an additional RncelV+t Point. in the
event Shipper desires that Transporter receive gas at a proposed point(s), i
Shipper shall notify Transporter in writing of such proposed point(s),
including in such notice estimated maximum daily delivery volume(s) at such I
point(s) and the location(s) thereof and Shipper shall therein warrant that the
quality of gas to be received at such proposed point(s) meets the quality
specifications as defined herein and that such gas and such proposed point(s)
meet the requirements of Article V1, paragraph 2 of this Agreement and all
other applicable terms and conditions contained in this Agreement, Transporter
will promptly evaluate each point and if such Receipt Point(s) is an
established Receipt Point on Transporter's pipeline system, will notify Shipper
~ within ten (10) working drays of Transporters receipt of Shipper's notice,
unless otherwise mutually agreed to by the parties hereto, whether or not
5
1
I
i
i
Transporter is able to accept gas from Shipper's proposed new Receipt Point(s).
If such Receipt Point(s) is not an established Receipt Point(s) on
Transporter's pipeline system, Transporter will notify Shipper within thirty
(30) days of Transporter's receipt of Shipper's notice, uniess otherwise
mutually agreed to by the parties hereto, whethor or not Transporter is able to
1
accept gas from Shipper's proposed now Receipt Point(s). In the event
Transporter anticipates the inability to complete said evaluation within the
specified ten (10) and/or thirty (30) day periods, Transporter will promptly
notify Shipper and provide the status of and estimated completion date of the
required evaluation; provided, however, no additional Receipt Point(s) will be
established hereunder without prior written agreement between Shipper and
Transporter. Upon Transporter's agreement to establish any additional Receipt
Point(s) pursuant hereto, Exhibit "A" shall be revised to reflect the
additional Receipt Point(s),
i
ARTICLE III,
PRESSUREc_AT POINTS OF RECEIPT AND DELIVERY
3.1 Shipper and/or Its designee shall deliver gas to Transporter at the
Receipt Point(s) at pressures sufficient to enter Transporter's pipeline system
at such point; provided, however, that Shipper's delivery pressure into
Transporter's system at the Receipt Point(s) shall not exceed Transporter'*
maximum allowable operating pressure at any such point,
r 3.2 Transporter shall deliver gas to Shipper at Transporter's operating
r pressure at the Delivery Point; provided, however, Transporter shall not be
obligated to delivery gas at a pressure in excess of seventy five (75) prig
into Shipper's Spencer Steam Electric Station in Denton, Texas.
6
J
ARTICLE IV
RATES
4.1 Shipper shall pay Transporter for services rendered hereunder at the
rates yet forth below commencing with initial deliveries of ga,; hereunder.
(a) if during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average volume of gas less than five thousand (5,000)
Mcf per day during such Billing Month, the fee charged hereunder shall be
twenty cents (20C) for each MMBtu delivered hereunder at the Delivery
Point, after allowing one percent (11) reduction in such delivered
volumes for gas lost and unaccounted for, gas used as fuel, and gas used
in day to day pipeline operations pursuant to Article I, paragraph 1.2.
(b) If during any Billing Month Shipper delivers hereunder, at the
Receipt Points, an average volume of gas greater than or equal to five
thousand (5,000) Mcf per day, the fee charged hereunder shall be fifteen
cents (15C) for each MMBtu delivered hereunder at the Delivery Point,
after allowing one percent (11) reduction in such delivered volumes for
gas lost and unaccounted for, gas used as fuel, and gas tv;ed in day to day
pipeline operations pursuant to Article I, paragraph 1.2.
(c) It is agreed by the parties hereto that the fees charged in
paragraphs (a) and (b) above shall escalate one cent (1C) per MMBtu
beginning on January 1, 1990, and annually thereafter daring the term of
this Agreemant,
(d) It is understood and agreed by the parties that the rates provided
for herein have been reached through arms length negotiations and that
neither parcy had an unfair advantage during the negotiations thereof.
However, should the appropriate regulatory agency find such rates to be
unresionable for any reason or in any way in violation of any provision of
7
3
law, and determine a rate lower than that provided for herein, Transporter
may terminate this Agreement upon giving Shipper written notice of its
intention to do so within sixty (60) days after the date of such judgement
or order, which cancellation shall become effective at the end of thirty
(30) days from and after the data of such notice. Should the agency
determine a rate higher than that provided for herein, Shipper may
terminate this Agreement upon giving Transporter wrltton notice of its
intention to do so within sixty (60) days after the date ,f such judgement
or order, which cancellation shall become effective at the end of thirty
(30) days from and after the date of such notice,
(e) Shipper agrees to reimburse Transporter for any Tares as defined in
Section S of GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX W.
I ARTICLE V.
~ T£8IS
l ~ 5.1 This Agreement is effective as of January 1, 1989, and shall remain
in full force and effect for a primary term extending through December 31,
1993, subject to the terms and provisions hereof, and month to month thereafter
until cancelled by either party giving tho other party thirty (30) days' prior
written notice. Notwithstanding anything contained herein to the contrary, in
the event of termination or cancellation of the Gas Sales Contract,
Transporter shall have the right, to terminate this Agreement },y giving Shipper
one hundred (100) days notice of such termination. Notwithstanding the above,
if an imbalance in deliveries exists on the date of termination hereof between
' the quantities theretofore delivered at the Receipt Point(s) and Delivery
Point, the term of this Agreement shall be extended for a period sufficient to
allow the party whose deliveries are in arrears to eliminate promptly any
i deficit. Provided further, any termination, cancellation or expiratior, of this
8
I
t
E
Agreement shall never operate to extinguish the obligation to make payment for
monies due hereunder.
5.2 In the event that on or before January 1, 1990, deliveries of gas for
transportation hereunder have not commenced, then in such event and
thereafter, until such deliveries are tendered and accepted, Transporter may
oanceL this Agreanonc b giving Shipper thirty (30) days' prior written notice
,:f such cancellation.
1 ARTICLE VI.
LAWS AND REGULATIONS
6.1 This Agreement shall be subject to all applicable State and Federal
laws, and orders, directives, rules and regulations of any governmental body,
official or agency having jurisdiction.
E 6.2 Each party warrants to the other that its or its agent's facilities
utilized for the delivery and acceptance of gas hereunder are wholly intrastate
i
E V facilities and are not subject to the Natural Ges Ace of 1938, as heretofore
amended. As a material representation, without which both parties would not
I
have been willing to execute this Agreement, each party warrnnts to the other
party that it will take no action nor commit any act of omtsslon which will
j
subject its facilities, this transaction or the other party's facilities, to J
Imo---% jurisdiction of the Federal Energy Regulatory Commission or its succosaor
i
governmental agency under the terms of the Natural Cos Act of 1938, as amended.
The gas delivered and accepted hereunder shall not have been nor shall be sold,
transported, or otherwise utilized in interstate commerce in a manner which
will subject either party to the terms of the Natural Cos Act of 1938, as
amended. In addition to and without excluding any remedy the aggrieved party
may have at law or in equity, the party who breaches the above warranties and
representations shall be liable to the aggrieved party for all damages, injury
9
' I
4
and reasonable expense the aggrieved party may
hereof, sustain by reason of any breach
Further, should either party perfotm any act, or cause any action to
be performed, at any time, that results In any Bas covered hereunder becoming
regulated by or subject to the jurisdictional consequences of the Natural Cas
Act of 1938, as amended, or successor governmental authority contrary to this
agreement, this agreement shall be deemed of Its own terms to ,erminate on the
day before the date of such occurrence; provided, however, such terminatle.n
shall never be construed to Impair any right under this paragraph,
ARTICLE VII,
GENFRAL TE HS AND ONDITIONS
7,1 The GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX "A" are
incorporated herein and made a part hereof by this reference,
ARTICLE VIII,
MISCFLig11 U
8•1 This Agreement shall be binding upon and inure to rho benefit of the
parties hereto and their respective successors and assigns;
provided, however,
that this Agreement shall not
be transferred or assigned by either
{ without the prior writtn patty {
n consent of the other party, which
I unreasonably withheld. shall not be
Any purported transfer or assignment without such
~J consent shall be i
null and void and shall not operate to release the transferror
or assignor from its obligations hereunder.
~ 8.2 Any notice, request, demand, statement or payment provided for to
this Agreement may be given in writing directed to the
mailed or delivered at such party to whom given and
partys address as follows;
City of Denton
Municipal Building
i Denton, Texas 76701
Attn: Executive Director of Utilities
I
10
I
I
!
I
i
i
(Notices) (Payments)
Lone Star Gas Company Lone Star Gas Company
301 S. Harwood Street 301 S. Harwood Street
Dallas, Texas 75201 Dallas, Texas 75201
ATTN: Transportation Department ATTN: Utility Related Credit
Croup
or at such address as each party may by like notice give to the other. Such
mailed notices shall be deemed to have been given when deposited in the United
States mail (first class, registered or certified), postage prepaid, or in the
case of hand delivery, when accepted by a representative of either party from a
representative of the other party.
8.3 This Agreement constitutes the entire agreement between the parties
covering the subject matter hereof, and there are no agreements, modifications,
conditions or understandings, written or oral, express or implied, pertaining
to the subject matter hereof which are not contained herein.
I
8.4 Modifications of this Agreement shall be or become effective only
i
upon the mutual execution of appropriate supplemental agreements or amendments
hereto by duly authorized representatives of the respective parties.
ACCEPTED AND AGREED to this day of 1989,
LANE STAR GAS COMPANY, a Division CITY OF DENTON
{ of ENSERCH Corporation
By By
I
Title Title I
Attest: Attest:
i
By B
' i Y
i
l
ll
j
I
I
I P
r ~r:rn
STATE OF
COUNTY OF
BEFORE NE, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared ,
of , a corporation, known to
me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as t2,e act and deed of
said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this thu day of
A.D., 19-
Notary Public in and for
_ County,
My commission expires lire
day of 19
STATE OF TEXAS
t COUNTY OF DALLAS
BEFORE ME, the undersigned authority, a Notary Public in and for the
State of Texas, on this day personally appeared W. F. bleidler. Jr.. Vice
President of LONE STAR GAS COMPANY, a Division of ENS£RCH Corporation, a Texas
corporation, known to me to be the person whose name is subscribed to the ,
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated,
and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
A.D. 19
Notary Public in and fo;
the State of Texas
I
I ~
i
t
II
l2
i
i
I
un
SHEET NO. I
APPENDIX "A"
GAS TRANSPORTATION AGREEMENT
GENERAL TERMS AND CONDITIONS,
1. Definitions
(a) "Gas" shall mean natural gas produced from gas wells, vaporized
natural gas liquids, gas produced in association with oil (casinghead gas)
and/or the residue gas resulting from processing casinghen,1 g"s and/or gas
well gas.
(b) "Day" shall mean the 24-hour period beginning at 1:00 a.m., Dallas
time, on one calendar day and ending at 7:00 a,m., Dallas time, on the
following calendar day,
i
(c) "Month" or "Billing Month" shall mean the period 1eginning at 7:00
j a.m., Dallas time on the first day of a calendar month and enl!ing at 7:00 a.m.,
Dallas time, on the first day of the succeeding calendar month.
a
(d) "Year" shall mean a period of twelve (12) consecutive months
beginning at 7:00 a.m., Dallas time, on January 1 of each calendar year of the
term hereof and ending at 7:00 a.m, Dallas time, on the s.time date of each
succeeding year during the term hereof.
(e) "Mcf" shall mean one thousand (1,000) cubic feet.
(f) The term "Btu" as used herein shall mean British Thermal Unit and,
where appropriate, the plural thereof. The term "MMBtu" shall mean one million
4 (1,000,000) Btu.
(g) "Heating Value" or "Heat Content" shall mean the total heating value
expressed in Btu per cubic foot (gross heating value) of the gas delivered
I
hereunder, and shall be determined at a temperature of sixty (60) degrees
Fahrenheit, saturated with water vapor and under a pressure equivalent to that
I
I
I
i
I
{
I~
SHEET NO. 2
of thirty (30) inches of mercury at thirty-two (32) degrees Fahrenheit
converted to base conditions of sixty (60) degrees Fahrenheit and an absolute
pressure of fourteen and sixty-five one hundredths (14.65) pounds per square
inch and adjusted to reflect actual water vapor content.
(h) "Psia" shall mean pounds per square inch absolute.
(1) "Psig" shall mean pounds per square inch gauge.
(j) "foint of Receipt" or "Receipt Point" shall mean the point(s) where
Transporter receives gas delivered to it by Shipper or by the designee of
Shipper for Shipper's account.
(k) "Point of Delivery" or "Delivery Point" shall mean the point where
Transporter delivers gas to Shipper.
2. Measuring EoviIment and Testing
(a) The gas delivered to Transporter at the Receipt Point(s) shall be
~ I
measured by means of measuring devices of standard type which shall be
installed, operated cnd maintained by Transporter (or its designee) and gas
delivered to Shipper (or for its account) at the Delivery Point shall be
I
measured by meters of standard type which shall be installed, operated and
maintained by Transporter (or its designee). Measurement devices and equipment
shall be tested and adjusted for accuracy on a regular schedule by the party
metering the gas ( the "metering party").
(b) Shipper agrees to reimburse Transporter, within ten (10) days from
the date of receipt of Transporter's invoice, for any tap valves, metering
facilities and associated equipment and all labor and overhead expenses,
attribiltable to the installation of such equipment, incurred by Transporter in
effectuating the receipt and delivery of gas hereunder. If the invoiced amount
4
Is not paid when due, interest on all unpaid amounts shall accrue at the rate
i
1
i
i
I
SHEET NO. 3
of one and one-half percent (lhl) per month from the date such amount is due
Transporter; provided, however, no interest shall accrue on unpaid amounts when
i
j failure to make payment is the result of a bona fide dispute between the
4 parties hereto regarding such amounts and Shipper timely pays all amounts not
` in dispute. Failure of Transporter to receive total reimbursement, for any
amounts not in dispute, within thirty (30) days of Shipper's receipt of
Transporter's invoice will allow Transporter to suspend and/or terminate this
Agreement. It is understood that although Shipper shall reimburse Transporter
for any tap valves, metering facilities and all associated costs Incurred by
Transpurter in establishing any Receipt and/or Delivery Point(s), Shipper shall
receive ownership of only the metering facilities and Transporter will be
solely responsible fo all activities in connection with said metering
facilities, including, but not limited to, operation, testing, calibration,
adjusting, repair and replacement (at Shipper's expense), and maintenance,
necessary for
performance hereunder until Transporter disconnects and removes
the metering facilities within a reasonable time after termination of this
Agreement. After said disconnection and removal, Shipper will have the right
within a reasonable period of time thereafter to pick up the metering
facilities from Transporter. Shipper's failure so to claim the metering
I
facilities within ninety (50) days of Transporter's notice to Shipper of the
disconnection and removal thereof, shall constitute a waiver by Shipper of any
right, title or interest in and to such metering facilities and all right,
title and interest therein shall thereafter vest in Transporter. Transporter
shall retain ownership of all equipment associated with the tap and tap valve
installation. Notwithstandirg the above, if adequate metering facilities are
already in existence at the Receipt and/or Delivery Points hereunder, such
i
~i
I
i
1
SHEET NO. 4
existing metering facilities shall be used ar.-.l the party having title to such
facilities shall retain title to such facilities.
(c) The other party shall have access to the metering party's metering
equipment at all times, but the maintenance, calibration and adjustment therc;,f
shall be done only by the employees or agents of the metering party. Records
from such metering equipment shall remain the property of the metering party
and shall be kept on file by said party for a period of not less than three (3)
years. However, upon request of the other party, the metering party shall
make available to the other party volume records from its metering equipment,
together with calculations therefrom, for inspection and verification, subject
to return by the other party to the metering party within thirty (30) days
after receipt thereof.
(d) The other party may, at its option and expense, install and operate
meters, instruments and equipment, in a manner which will not interfere with
j the metering party's equipment, to check the metering party's meters,
instruments and equipment, but the measurement of gas for the purpose of this
Agreement shall be by the metering party's meter only, except as hereinafter
h
specifically provided. The meters, check meters, instruments and equipment
installed by each party shall be subject at all reasonable times to inspection
or examination by the other party, 'out the calibration and adjustment thereof
shall be done only by the installing party.
(e) Each party shall give to the other party notice of the time of all
te;cs of meters sufficiently in advance of such teats so that the other party
say conveniently have its representatives present; provided, however, that if
i
either party has given such notice to the other party and such other party is
not present at the time specified, then the party giving the notice may proceed
I
i
I
~ I
i
I
I
11
ICC t
1~ .4..1 2j.rili4
(T
SHEET NO. 5
with the test as though the other party were present.
(f) Meter measurements computed by the metering party shall be deemed to
i be correct except where the meter is found to be inaccurate 1\y as much as one
f percent (11), fast or slow, or to have failed to register, in either of which
cases the metering party shall repair or replace the meter. The quantity of
gas delivered while the meter was inaccurate or failed to register shall be
I` determined by the readings of the other party's check meter, if installed and
i
in good operating condition, or by correcting the error if the percentage of
error is ascertainable by calibration or mathematical calculation. If not so
ascertainable, then it shall be determined by estimating the quantity on a
basis of deliveries under similar conditions when the meter was registering
accurately. Such adjustments or correction shall be made only for one-half (h)
of the period between the test in which the inaccuracy was discovered and the
i~ previous test for accuracy; provided, however, such adjustment or correction
Eff period shall not exceed ninety (90) days.
k
3. Measurements
(a) In gas measurement computations, the metering party may use the
findings and rules of the Railroad Commission; with respect to flowing
temperature, the metering party shall at its expense properly install and
operate a device of standard make to continuously determine or record flowing
temperature, With respect to specific gravity, such shall be determined by
"on-site" sampling and laboratory analysis or any other matually agreeable
method which is of standard industry practice (provided, however, that either
party may at its expense
I Y Y properly install and operate a recording specific
gravity instrument of standard make and in this event the specific gravity as
recorded shall be used),
I
I
I
i
I~
l SHEET NO. 6
(b) The meters for measurement of volumes at the Receipt Potnt(s) and
Delivery Point hereunder shall be installed and operated, and computations
shall be made, in accordance with current industry standards. The unit of
measurement of gas shall be one thousand (1,000) cubic feet at a pressure base
of fourteen and sixty-five one hundredths (14.65) pounds per square inch
absolute and at a temperature base of sixty (60) degrees Fahrenheit. Meter
measurements shall be computed by the measuring party Into such units in
accordance with the Ideal Cas laws for volume variations due to metered
1
pressure and corrected for deviation using daily averages of recorded specific
gravity and flowing temperature, or by using the calculated specific gravity
determined by the method mentioned in paragraph (c) below.
(c) The daily average heating value and specific gravity of the gas
delivered hereunder by either party may be determined by the use of BTU
recording instruments of standard type, which may be installed and aperatcd by
the metering party at the metering point, or at such other paint or points as i
are mutually agreeable to both parties; provided, however, if there is no BTU
recording Instrument at a particular receipt or delivery point specified herein
or agreed upon hereunder, then the heating value and specific gravity of the
gas at such point may be determined by "on-site" sampling and laboratory
analysis or any other mutually agreeable method which is of standard industry
practice.
(d) The daily average meter pressure, specific gravity, flowing
temperature and heating value shall be determined only during periods of time
E when the gas is actually flowing.
i
4. Quality
(a) Fach party shell deliver to the other party hereto natural gas which
I
kk
I
i SHEET NO. 7
is of merchantable quality and is commercially free from water, ether
objectionable fluids, sand and other objectionable solids or gas components and
i which contains (1) no oxygen, (it) not more than five (5) grains of total
f sulphur consisting of not more than one quarter (4) grain of hydrogen sulphide
and one (1) grain of mercaptan sulphur per one hundred (100) cubic feet of gas,
(iii) not more than three percent (34) by volume of carbon dioxide, and (iv)
not more than seven pounds (7u) of water vapor per one million (1,000,000) +r
cubic feet of gas. The gas shall be at temperatures not In excess of one
hundred twenty (120) degrees Fahrenheit nor less than forty (40) degrees
I ~
Fahrenheit and shall have a heat content of not less than nine hundred fifty
(950) or more than eleven hundred fifty (1,150) British Thermal Units per cubic
foot under the conditions of measurement contained herein. Transporter shall
not be obligated to accept any gas delivered by Shipper (or its destf,nes) j
hereunder which is not interchangeable with other gas in Transporter's pipeline
at the Point(s) of Receipt hereunder. Transporter's determination of such
interchangeability shall be based upon a factor which is equivalent to the
quotient obtained by dividirg the total heating value of such gas, expressed in
J I
BTU's, by the square root of the specific gravity of such gas. Such factor
must be within ±71 of the interchange factor so calculated by Transporter for
the gas in its system at the Receipt Point(s) hereunder.
(b) If at any true the gas fails to meet the quality specifications
i
enumerated herein, the party receiving such gas shalt notify the party
delivering such gas, and the delivering party shall immediately correct such
failure, If the delivering party is unable or unwilling to deliver gas
according to such specifications, the party receiving such gas may refuse to
accept delivery of gas hereunder for so long as such condition exists.
I
I
l
1
y v
SHEET N0. 9 1
5. IA MI all
(a) Shipper agrees to pay Transporter, by way of reimbursement,
Taxes levied and imposed upon Transporter with respect to the transport of Bas
and associated facilities related to the performance of this Agreement. if any
such Taxes levied and imposed upon Transporter by any governmental authority
on the value or sales price of the ges transported
I
are calculated based up I
hereunder, Shipper shall disclose to Transporter the value or sales price of
such gas to enable Transporter co calculate and pay all such fees and taxes to
appropriate governmental authorities in a timely manner. if Shipper fails or
refuses co disclose the value or sales price of such gas. Transporter shall
have the right to terminate this agreement by giving Shipper ten (10) days'
y agrees to indemnify and hold
prior written notice :nd Shipper hereb demands, losses or
and all clai
harmless from and against any ms,
Transporter occur as a result of
expenses, including attorneys' fees, which Transporter may
value or sales price of gas
Shipper's failure or refusal to disclose the
transported hereunder,
(b) The term "T~xes_ as used herein, shall mean all taxes levied upon
income or
and/or paid by Transporter (other than ad valorem, capital stock,
'
excess profit taxes, except as provided herein, general franchise taxes
imposed on corporations on account of their
A foreign [ corporation and similar
right to do business within the state as receipts tax, street and alley
taxes), including, but not limited gross
made by any
assessed or
tax, licenses, fees and other charges levied,
rental
right or privilege of transporting,
the act,
governmental authority on on the volume, heat
where suca taxes are based up
handling or delivering gas,
Il
i
VI
1
SHEET NO. 9
content, value or sales price of the gas, or transportation fee payable
i
hereunder,
6, Billing. Accounting and Reports
(a) On approximately the 15th day of each month. Transporter shall render
to Shipper a statement for the preceding month showing the Mcf and M.'1Btu
delivered at the Receipt Point(s) and Delivery Point; the amount of
compensation due to Transporter hereunder, including the tax reimbursement; and
other reasonable and pertinent Information which is necessary to explain and
i
support same and any adjustments made by Transporter in determining the amount
billed,
(b) Shipper shall pay Transporter wlthir. twelve (12) days from the date
Transporter's statement is deposited postage prepaid in the United States mail
or in the case of hand delivery, within ten (10) days from the date
Transporter's statement is delivered to a representative of Shipper from a
representative of Transporter, for gas transported hereunder during the
preceding month, or as to payment which is otherwise due hereunder, according
i
to the measurements, computations and rates herein provided, If the invoiced
amount of any payment due is not paid when due, interest on all unpaid amounts
shall accrue at the rate of one and one half percent (IM) per month from the
date such amount is due Transporter; provided, however %,o interest shall accrue
on unpaid amounts when failure to make payment is the result of a bona fide
dispute between the parties hereto regarding such amounts and Shipper timely
f pays all amounts not in dispute.
(c) Each party hereto shall have the right at all reasonable times to
examine the measurement records and charts of the other party to the extent
necessary to verify the accuracy of any statement, charge, computation or
4
i
i
SHEET NO. 10
demand made under or pursuant to any of the provisions in this Agreement. If
any such examinations reveal or if eitLer party should discover any inaccuracy
in such billing theretofore made, the necessary adjustments in such billing and
payment shall be made; provided, that no adjustments for any billing or payment
shell be made for any inaccuracy claimed after the lapse of two (2) years from
the rendition of the invoice relating thereto.
7. Responsibility
Shipper shall be deemed to be in control and possession of the gas until
such gas shall have been delivered to Transporter at the Receipt Point(s) and
f
after such gas shall have been delivered at the Delivery Point. Transporter
f
shall be deemed to be in control and possession of the gas after receipt of the
gas at the Receipt Point(s) and until such gas shall have been delivered to
Shipper (or for its account) at the Delivery Point, Each party shall have
responsibility for gas handled hereunder, or for anything which may be done,
I happen or arise with respect to such gas, only when such gas is in its control
and possession as aforesaid. Each party shall be responsible for any damage or
injuries caused thereby until the same shall have been delivered to the other
party at the Receipt Point(s) or Delivery Point, except injuries and damages
which shall be occasioned solely and proximately by the negligence of the
receiving party.
8. Warranty
'f
Each party hereto warrants to the other that at the time of delivery of
gas hereunder it will have good title or the right to deliver such gas, and 1
that such gas shall be free and clear of all liens end adverse claims; and
each party agrees, with respect to the gas delivered by it, to indemnify the
other against all suits, actions, debts, accounts, damages, costs (including
i
1
ry
e
G
y
I
SHEET NO. 11
attorneys' fees), losses and expenses arising from or out of any adverse claims
I
of any and all persons to or against said gas. Title to and ownership of the
I
gas delivered hereunder shall pass to and vest in the party receiving the gas.
9. Force Majeure
I
(a) In the event either party is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Agreement, except the 1
obligation to pay monies due hereunder, it is agreed that, on such party's
~ giving notice and reasonably full
particulars of such force majeure, in writing
or by telegraph, to the other party within a reasonable time after the
l occurrence of the cause relied on, the obligations of the party giving such
notice, so far as they are affected by such force majeure, shall be suspended
during the continuance of any inability so caused, but for no longer period,
and such cause shall so far as
possible, be remedied with all reasonable
dispatch.
(b) The tera "force majeure", as employed herein, shill mean acts of
Cod; strikes, lock outs or other industrial disturbances; acts of the public
l 1 enemy, wars, blockades, insurrections, civil disturbances and riots, and
epidemics; landslides, lighting, earthquakes, fires, storms, floods and
washouts; arrests, orders, directives, restraints and regttirements of the
government and governmental agencies, either federal or state, civil and
military; and application of governmental conservation rules and regulations;
explosions, breakage or accident to machinery or lines of pipe; outages
(shutdowns) of power plant equipment or lines of pipe for inspection,
maintenance or repair; freezing of wells or lines of pipe; the partial or
entire nonperformance of any third party transportation pipeline which is
necessary to receive and deliver gas under this Agreement; and any other
1
I
I
less
i
4
SHEET NO. 12
causes, whether of the kind enumerated or otherwise, not reasonably within the
control of the party claiming suspension. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion of
the party having the difficulty, and that the above reasonable dispatch shall
not require the settlement of strikes or lockouts by acceding to the demand of
the opposing party when such course is or is deemed to be inadvisable or
inappropriate in the discretion of the party having the difficulty,
10. Waiver of Breaches Default. or Rights
No waiver by either party hereto of any one or more breaches, defaults or
rights under any provisions of this Agreement shall operate or be construed as
a waiver of any other breaches, defaults or rights, whether of a like or of a
different character, By providing written notice to the other party, either
r
party may assert any right not previously asserted hereunder or may assert its
right to object to a default not previously protested. Except as specifically
1 provided herein, in the event of any dispute under this Agreement, the parties
shall, notwithstanding the pendency of such dispute, diligently proceed with
j the performance of this Agreement without prejudice to the rights of either 1
j
party.
i
11. Remedy for Breach
Except as otherwise specifically provided herein, if either party shall
fail to perform any of the covenants or obligations imposed upon it in this
Agreement (except where such failure shall be excused under the provisions of
Section 9 hereof), then, and in that event, the other party may, at its option
(without waiving any other remedy for breach hereof), by notice in writing
specifying wherein the default has occurred, indicate such party's election to
terminate this Agreement by reason thereof; provided, however, that Shipper's
Ii
f
f~
- f
I 4
M
SHEET NO. 13
failure to pay Transporter within a period of ten (10) days following Shipper's
receipt of written notice from Transporter advising of such failure to make
payment in full within the time specified in Section 6 hereof, shall be a
default which shall give Transporter the right to immediately terminate this
Agreement, unless such failure to pay such amounts is the result of a bona fide
k dispute between the parties hereto regarding such amounts hereunder and Shipper
timely pays all amounts not in dispute. With respect to any other matters, the
party in default shall have thirty (30) days from receipt of such notice to
r `f remedy such default, and upon failure to do so, this Agreement shall terminate
from and after the expiration of such thirty (30) day period. Such termination
shall be an additional remedy and shall nit prejudice the right of the party
I I
I~ f not in default to collect any amounts due it hereunder for any damage or loss
I
suffered by it and shall not waive any other remedy to which the party not in
default may be entitled for breach of this Agreement.
Ii
~I
1
{
f
a
EXHIBIT "A"
TO
CAS TRANSPORTATION AGREEMENT
BETWEEN
LDNE STAR CAS COMPANY
AND
CITY OF DENTON
Transporter Recaipj Point(s)
i
j Description Maximum Daily Volume
j
1. Lone Star's interconnection with 25,000 Mcf
Valero at Ennis (Ellis County, Texas)
2. Lone Star's interconnection with 25,000 Mcf
Mobil at Waha (Pecos County, Texas)
3. Lane Star's interconnection with 25,000 Mcf
Exxon's Katy Plant (Waller County, Texas)
4. Lone Star's interconnection with 25,000 Mcf
Palo Duro Pipeline (Nolan County, Texas)
i
5. Lane Star's interconnection with 25,000 Mcf
Delhi (Denton County, Texas)
i
if
i
~ i
i
i i
1
I
t
LJL-
I IF IF I
i
i
k
I
II.
I[ ~ T
1
i
r
2796L
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT WITH
LONE STAR GAS COMPANY AND THE CITIES OF BRYAN, GREENVILLE AND
GARLAND FOR THE TRANSFER OF GAS; PROVIDING EXPENDITURE OF
FUNDS; AND DECLARING AN EFFECTIVE DATE.
THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION I. That the Mayor is Lircby s-uthortzed to execute a
contract with Lone Star Gas Company and the cities of Bryan,
Greenville and Garland, a copy of which is attached hereto and
incorporated by reference herein.
i
SECTION II. That the City Council hereby authorizes the
expen ture o funds in the manner and amount as specified in the
j agreement.
IM SECTION III. That this ordinance shall become effective
imme ate y upon its passage and approval.
PASSED AND APPROVED this the day of
1989. -
f
RA P E , FLAYOR
I
` ATTEST:
JENNIFER E , 3MR-E-T-ARY
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY: ~ A
4
I
i
TRANSFER OF GAS AGREEMENT
THIS AGREEMENT, made and entered into by and between tta CITY OF DENTON,
e municipal corporation, hereinafter referred to as "Buyer," and LANE STAR GAS
COMPANY, hereinafter referred to as "Seller,"
W I T N E S S E T H:
WHEREAS, Buyer and Seller have entered into a Gas Sales Contract dated
January 1, 1989 (herein "Gas Sales Contract") and a Gas Transportation Agreement
dated January 1, 1989 (herein "Gas Transportation Agreement"); and
WHEREAS, the City of Bryan, the City of Greenville, the City of Garland
j
and Brazos Fuel Company,Inc., hereinafter collectively referred to as "Cities",
own and operate the following electric generating stations: Roland C. Dansby
I
Power Plant, the Ray Olinger Power Plant and the Greenville Steam Power Plant.
Such electric generating stations and the intersection of Seller's Line X(36")
and Brazos Fuel Company, Inc.'s 12-inch pipeline near Huckabay in Erath County,
Texas (hereinafter referred to as the "Huckabay Point of Interconnection") are
hereinafter collectively referred to as 'Other Cities' Plants;" and
WHEREAS, Buyer and Seller desire to enter into a "Transfer of Gas
Agreement" as hereinafter provided;
NOV, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, together with other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer do
hereby contract and agree with each other as follows:
j 1
I
I
I
I
i
t.
1
F
i
i
1
i
s: 1
1
ARTICLE I
SUBJECT MATTER
It is agreed that from time to time Buyer may elect to take and receive 1
a
a quantity of gas that is less than 0,9 "Maximum Daily Volume" or "Maximum Annual
~I
Volume' provided in the Cas Sales Contract, or the maximum daily volume provided
in the Gas Transportation Agreement, between Buyer and Seller under the terms
and conditions of such agreements and may elect instead to receive such quantity
/ of gas (on an equivalent MMBtu basis) at any of the Other Cities' Plants, which I
shall be hereinafter referred to as a "transfer of gas', subject to the following
I
conditions;
a. Buyer shall notify- Seller by telephone through normal dispatching
procedures a reasonable amount of time in advance of its desire to
make such a transfer of gas and shall designate (i) the quantity of
gas (in MMBtu) by sales or transportation category, (it) which of
I
the Other Cities' Plants that such gas will be transferred to, as
well as (iti) the period of time during which such transfer shall
take place.
b. Seller shall agree to such a transfer of gas except when Seller
determines that to do so would interfere with Seller's curtailment
program or with Seller's ability to provide adequate service to
customers accorded an equal or higher priority than Buyer by Seller's
curtailment program; provided, however. Buyer shall never receive
curtailment credit under the Gas Sales Contract for curtailment of
gas transferred hereunder.
~ I
2
I
F
I
z ~
c. This Agreement shall never be construed to give Buyer the right to
deliver gas at rates in excess of any contractual limitations
provided for any of the Other Cities' Plants.
d. All such quantities of gas transferred from Buyer as provided herein
shall be. credited toward the Demand Charge under Buyer's Gas Sales
Contract with Seller as such credits are set forth in such Gas Sales
Contract as if such gas had been delivered to Buyer at Buyer's
I
plants. Notwithstanding anything to the contrary, Eayer shall never
have the right to transfer (t) any quantities of gas which are sold
by Seller under paragraph 4(b) of the Gas Sales Contract or (ii) any
quantities of gas which are delivered under agreements other than
I
the Cas Sales Contract or the Gas Transportation Agreement.
e. The heating value to be used for measurement and billing purposes
of the gas transferred hereunder shall be the heating value of such
gas as delivered at the Other Cities' Plant(s).
f. The total annual volume of all gas transferred under this Agreement
i
by Buyer during any Year of the term of the Gas Transportation
Agreement shall not exceed twenty-five percent jii%) of the combined I
I
total volume of gas transported by Seller for Buyer to any and all
delivery points during such Year. Such twenty-five percent (251)
limit shall apply only to gas volumes transferred to such Other
Cities' Plant(s) where such Other City(s) does not have both a gas
sales contract and a gas transportation agreement with Seller which
is then currently in effect. However, without obligating Seller in
any way to transfer gas for Buyer in excess of the limit set forth
in this paragraph, if Buyer should transfer quantities of gas in
3
f
I
I
R
excess of such limit, Buyer shall pay Seller for any such gas an
additional amount of twenty (20C) per HHBtu it, addition to the sales
price or tra-asportation fee provided in the Gas Sales Contract and
Gas Transportation Agreement, whichever agreement/contract is
applicable.
g. Buyer shall be allowed to transfer gus to any of the Other Cities'
Plants pro,lded such City has both a gas sales contract and a gas
I I
transportation agreement with Seller which is then currently in
effect. However, if any of such Cities does not h:.vs both a gas
i
sales contract and a gas transportation agreement in effect with
Seller at such time and Seller should desire to allow Buyer to
transfer gas to such City, then Seller may elect to allow such
transfer for any time period Seller :looses, all at Seller's sole
option. Therefore, on or before each April 1 and October 1 of any
Contract Year during the term of the Gas Sales Contract, Seller
shall inform Buyer of each City which does not have both a gas sales
h
contract and a gas transportation agreement in effect with Seller
F at such time and Seller shall also then inform Buyer of: (i) which
of such Other Cities' Plant(s) shall be allowed to receive gas
transferred hereunder for the consecutive six (6) month period
beginning on such April 1 or October 1, and (ii) the maximum hourly
and daily volumes Seller may deliver hereunder at each such Plant(s)
during such period, However, if any City(s)'s gas salas contract
and/or gas transportation agreement terminates during such six (6)
month period, Seller shall not be obligated to deliver gas
transferred hereunder to such City(s), Provided, however, if Seller
4
li
i
I
fails to submit to Buyer on cr before April 1 or October 1 of any
Contract Year the allowed Plant(s) and volumes as provided in the
previous sentence, then such allowed Plant(s) and volumes for the
immediately preceding consecutive six (6) month period shall apply.
h. Buyer may terminate such a transfer of gas at any time by giving
reasonable advance notice to Seller of its desire to do so and Seller
I -\I may likewise terminate a transfer of gas by giving Buyer reasonable
advance notice if Seller has determined that to continue a transfer
would interfere with Seller's curtailment program or with Seller's
ability to provide service to customers accorded an equal or higher
I
priority than Buyer under Seller's curtailment program.
I
ARTICLE 11
I ~
TEAM
i
Subject to the other terms and provisions hereof, this Agreement shall be
i
effective on the lot day of May, 1989 and shall thereafter continue and remain
in full force and effect for a period and term extending until the termination
of the Gas Sales Contract between Buyer and Seller,
ARTICLE III
PAYMENT
i
All quantities of gas transferred from Buyer to one of the Cities as
provided for herein, shall be deemed to have been purchased by Buyer or
transported for Buyer, whichever is applicable, and such quantities transferred
shall not ba credited in any way toward any agreement in effect for the City to
which the transfer is made. The sales price or transportation fee for such
volume of transferred gas, the rendering of statements and bills, and the
payments for same and any other similar matters shall be according to the terms
I
S
I
I
~Lt
4
and conditions of Buyer's Gas Sales Contract or Ors Transportation Agreement,
whichever is applicable,
ARTICLE 1V
NOTICES
To., parties hereto recognize that in order to determine and allocate sales
and/ur transport volumes delivered each billing month under (i) the Gas Sales
Contract and/or the Gas Transportation Agreement and (ii) the iforessid Cities'
I contracts, it is necessary for Seller to deluct the transferred volume(s) of gas
which was delivered under the Gas Sales Contract and/or the Gas Transportation
Agreement at each Other Cities' Plants during each billing month from total
deliveries to such plant(s). Therefore, for confirmation purposes, Buyer agrees
i
to furnish to Seller at to office in Dallis, Texas, a written report of all gas
transferred hereunder during each billing month within four (4) working days
following the end of each such billing month. Only transferred volumes so
reported each month shall be considered as gas volumes transferred hereunder.
The parties hereto agree that this Agreement may be executed in one or
more copies, or counterrarts, each of which, when executed by Seller and Buyer,
as well as any of the parties listed below, as Other Cities, shall constitute
and be an original effective agreement between Buyer and Seller and such Other
Cities.
1
i I
i
6
I
i
9
IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals
by the parties hereto on the day of _ 1989,
ATTEST: SELLER:
LANE STAR CAS COMPANY, a Division of
ENSERCH CORPORATION
J. R. Moore
Vice President
ATTEST: BUYER:
CITY OF DENTON, TEXAS
I
OTHER CITIES:
ATTEST: CITY OF BRYAN, TEXAS
i
ATTEST: CITY Or GARLAND, TEXAS
ATTEST: CITY OF GREENVILLE, TEXAS I
ATTEST: BRAZOS FUEL COMPANY, INC.
~ I
7
i
I
~l
i
J
i
i,
1
~Mn fv*~]
CITY of DENTON,_ TEXAS PURCHASING DJOS10N / 901-B TEXAS STREET ! DENTON, TEXAS 76201
MEMORANDUM
TO: Lloyd V. Harrell, City Manager
FROM: John McGrane, Execative Director of Finance
DATES September 28, 2989
SUBJECT: CERTIFICATES OF OBLIGATION
I
This ordinance provides for the advertising of $1,550,000.00
of Certificates of obligation for the following:
1} $500,000.00 Geographic Information system
' I
2) $650,000.00 Telephone System i
I
s) $400,000.00 Municipal Garage Building
As was indicated in the Major Issues Repot, the items are
in priority order.
If you have any questions or nerd any additional
information, please advise,
I Sincezely,
hn F. McCrane
JMCG/cj
608.DOC
I
'I
I
I
j E
I
i 8 1 7156 6 8311 DIFW METRO 267.0?':)
Il
CERTIFICATE FOR
ORDINANCE AUTHORIZIN^. PUBLICATION OF
NOTICE OF INTENTION TO ISSUE
CERTIFICATES OF OBLIGATION OF THE CITY OF DENTON TEXAS
THE STATE OF TEXAS
COUNTY OF DENTON ;
CITY OF DENTON
We, the undersigned officers of said City, hereby certify
as follows:
1. The City Council of said city convened in
REGULAR MEETING ON THE ]RD DAY OF OCTOBER, 1989,
at the Municipal Building (City Hall), and the roll was called
of the duly constituted officers and members of said City
Council, to-wit:
i
Jennifer K. Walters, City Secretary Ray Stephens, Mayor
Bob Gorton Linnie McAdams
Jane Hopkins Jim Alexander
Randall Boyd Hugh Ayer
and all of said persons were present, except the following
absentees:
thus constitut-
ing a quorum. Whereupon, among other business, the following
` was transacted at said Meeting: a written
ORDINANCE AUTHORIZING PUBLICATION OF NOTICE OF INTENTION
! TO ISSUE CERTIFICATES OF OBLIGATION OF THE CITY OF DENTON,
TEXAS
was duly introduced for the consideration of said City council
and duly read, it was then duly moved and seconded that said
Ordinance be passed; and, after due discussion, said motion,
carrying with it the passage of said Ordinance, prevailed and
carried by the following vote:
AYES:
NOES:
I
ABSTENTI;NS:
2. That a true, full, and correct copy of the aforesaid
Ordinance passed at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certifi-
cate; that said Ordinance has been duly recorded in said City
I
ICI
f
Council's minutes of said Meetings that the above and foregoing
paragraph is a true, full, and c,=ect excerpt from said City
Council's minutes of said Meeting pertaining the passage of
said ordinance; that the persons named in the above and forego-
ing paragraph are the duly chosen, qualified, and acting
officers and members of said City Council as indicated therein;
and that each of the officers and members of said City Council
was duly and sufficiently notified officially and personally,
in advance, of the time, place, and purpose of the aforesaid
Meeting, and that said ordinance would be introduced and
considered for passage at said Meeting; and that said Meeting
wa.; open to the public, and public notice of the time, place,
~ aA purpose of said meeting was given, all as required by
Vernon's Ann. Tex. Civ. St. Article 6252-17.
3. That the Mayor of said City has approved, and hereby
approves, the aforesaid Ordinance; that the Mayor and the City
Secretary of said city have duly signed said ordinance; and
that the Mayor and the City Secretary of said City hereby
declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of said ordi-
nance for all purposes.
SIGNED AND SEALED as of the day of October, 1989.
i Ik
City Secretary Mayor
(SEAL)
- - - - - - - - - - - - - - - - - - - - -
We, the undersigned, being respectively the City Attorney
and the Bond Attorneys of the City of Denton, Texas, hereby
certify that we prepared and approved as to legality the
attached Pzd following Ordinance prior to its passage as
aforesaid,
City Attorney
Bo d Attorneys
!l
i
I
I
i
1
I
11 I
v
a
ORDINANCE NO. 89
ORDINANCE
AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE
CERTIFICATES OF OBLIGATION OF THE CITY OF-pENTON. TEXAS
THE STATE OF TEXAS ;
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, it is deemed necessary and advisable that Notice
of Intention to Issue Certificates of Obligation be given as
hereinafter provided.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Section 1. That attached hereto is a form of "NOTICE OF
INTENTION TO ISSUE CERTIFICATES OF OBLIGATION OF THE CITY OF
DENTON, TEXAS", the form and substance of which are hereby
adopted and approved.
i
Section 2. That the City Secretary shall cause said
NOTICE, in substantially the form attached hereto, to be
published once a week for two consecutive weeks in a newspaper
of general circulation in the City, with the date of the first
publication to be at least fifteen (15) da}s before the date
tentatively set for the passage of the ordinance authorizing
f the issuance of such Certificates of obligation.
f
i
i
i
j+
li
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
NOTICE OF IITENTION
TO ISSUE CERTIFICAIE:S OF OBLIGATION
OF THE CITY OF_DENTON TEXAS
THE
ofCITY
notice -
its intention~tonisoDenton ue CITY OF yDENTON CE TIFICATES V OF
OBLIGATION, in accordance with the Certificate of obligation
Act of 1971, as amended and codified, and other applicable
laws, in the maximum principal amount of $1,550,000 for the
purpose of paying all or a portion of the City's contractual
obligations to be incurred (1) pursuant to a contrast or
contracts for the construction and equipment of a municipal
garage, (2) pursuant to a contract for the purchase and instal-
lation of a municipal telephone system, and (3) pursuant to a
contract for the purchase of a municipal gE:graphical computer-
ized information (mapping) systems and also for the purpose of
paying all or a portion of the City's contractual obligations
for professional services of engineering, attorneys, and
financial advisers in connection with such purchases, inatalla-
tion, and Certificates of obligation. The City proposes to
provide for the payment of such Certificates of obligation from
the levy and collection of ad valorem taxes in the City as
provided by law, and from certain revenues derived by the city
from the ownership and operation of the City's Utility System
(consisting of the City's combined waterworks system, sanitary
sewer system, and electric light and power system), The City
1 Council of the City tentatively proposes to authorize the
issuance of such Certificates of Obligation at a meeting
commencing at 7:00 p.m. on the 24th day of October, 1989, in
the City Council room at the Municipal Building (City Hall),
Denton, Texas.
CITY OF DENTON, TEXAS
By Jennifer K. Walters,
City Secretary
I
I
i
a
{
}
k -
11
I
I • r 1
r
l
ill
I
r
TTIMMMLL
MIRA
i
I
ICI
f
1
2786E ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, APPROVING A COMPROMISE
SETTLEMENT AND RELEASE OF ALL CLAIMS FOR PENDING LITIGATION
I BETWEEN THE CITY OF DENTON AND MATTHEW STRUBLE AND ROSEMARY
STRUBLE; AND DECLARING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. That the attached Compromise Settlement and
Releaseaseof-All Claims between the City of Denton and Matthew
Struble and Rosemary Struble, providing for the settlement and
compromise of the litigation now pending between the parties
before the 16th Judicial District Court of Denton County, Texas
in Cause No. 87-2773-A, is approved in accordance with its terms,
and the City Manager is authorized to execute the agreement and
all other documents and make the payments and take such action as
is necessary to comply with the terms of said agreement.
SECTION II. That this ordinance shall become effective
immediately upon its passage and approval,
PASSED AND APPROVED this the day of October, 1989.
I
RAY STEPHENS9 MAYOR
I
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
1
BY:
APPROVED AS TO LEGAL FORM:
I
i
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY: ,
I
it
4
fir:
e
Slk
k ,
NO. 87-2773-A
MATTHEW STRUBLE AND * IN THE DISTRICT COURT
ROSEMARY STRUBLE
*
vs. * OF DENTON COUNTY, TEXAS
THE CITY OF DENTON * 16TH JUDICIAL DISTRICT
COMPROMISE SETTLEMENT 6 RELEASE OF ALL CLAIMS
FOR AND IN CONSIDERATION of the SUM of Forty Thousand
~-1 Dollars ($40,000.00) in hand paid this day in cash, the receipt
and sufficiency of, •.~hich is hereby acknowledged, Matthew Struble
and Rosemary Struble do hereby release, acquit, and forever
discharge the City of Denton, Texas, and its past and present
elected officials, officers, employees, agents, insurers,
attorneys and all other persons, firms or corporations, whether
named herein or not, all and each of them, of and from any and
all actions, causes of action, claims (including subrogation
a
claims), and demands, on account of, or in any way growing out
of, any and all personal injuries, violation of constitutional
and statutory rights, damage to reputation, pain and suffering,
i
grief, bereavement, loss of consortium and companionship, mental
I I
anguish, loss of earning capacity, loss of wages, profits and
money, damage to and taking of property, and all other damagss
whether known or unknown and whether heretofore asserted or not,
resulting or to result from an automobile collision involving a
vehicle driven by Matthew Struble, which occurred on or about
April 24, 1987, all as more fully dascribed in Plaintiffs'
pleadings on file herein, to which reference is made for a more
complete description, and do hereby agree to indemnify and save
COMPROMISE SETTLEMENT 3 RELEASE OF ALL CLAIMS PAGE 1
I`
f
harmless the said City of Denton, Texas, and its past and present
elected officials, officers, employees, agents, insurers, and
attorneys from all further claims, including subrogation claims,
demands, costs, or expenses arising out of the injuries and
damages sustained by them as a result of said incident.
The undersigned understand and agree that the amount paid
under this agreement is in full satisfaction of all damages
arising on account of the above described events and that they
will receive no further sums of money therefrom. The undersigned
agree to not assert or prosecute any further claims or lawsuits
therefore against anyone whomsoever, whether or not herein or
otherwise named, described or identified. Any and all claims
against parties not specifically released herein, if any, are
hereby assigned in full to the parties hereby released.
i
It is expressly understood and agreed that Matthew Struble
and Rosemary Struble have already paid or will pay out of the
aforementioned sum of $40,000.00 all medical, doctors' and
it
hospital charges received in the past or to be incurred in the
future and that Matthew Struble and Rosemary Struble will defend,
indemnify, and hold harmless the said City of Denton, Texas, and
its past and present elected officials, officers, employees,
agents, insurers, attorneys and all other persons, firms or
corporations, from any claims for such charges, especially with
reference to any liens under the Texas Hospital Lion Law.
It is expressly warranted by the undersigned that no promise
or inducement has been offered except as herein set forth; that
COMPROMISE SETTLEMENT 6 RELEASE OF ALL CLAIMS PAGE 2~
3
i
i,
{
this Release is executed without reliance upon any statement or
representation of any person or parties released or their
representatives, concerning the nature and extent of the
injuries, damages and/or legal liability therefore; that
acceptance of the consideration set forth herein is a full accord
and satisfaction of a disputed claim for which liability is
expressly denied.
FOR THE SAME CONSIDERATION, it is agreed that the above-
styled suit will be dismissed with prejudice to refiling the
same, and that costs of court will be taxed to the party
incurring the same.
This document contains the entire agreement of the parties
hereto. THE PROVISIONS OF THIS RELEASE ARE CONTRACTUAL AND NOT
E MERE RECITALS.
WITNESS MY HAND THIS DAY OF , 1989.
MATTHEW STRUBLE
APPROVED:
J ROSEMARY STRUBLE
DAVID WACKER
SBN: 20652600
606 N. Bell Avenue 76201
(817) 566-3951
i I
I ~
j
COMPROMISE SETTLEMENT 6 RELEASE OF ALL CLAIMS PAGE 3
t '
II
i
i
~.sl HASH+~
IS NIY. b¢'T~
STATE OF TEXAS +
COUNTY OF DENTON +
This instrument was acknowledged before me on this - day
of 1989 by Matthew Struble.
Notary Public - State of Texas
My commission expires:
STATE OF TEXAS +
I ►
COUNTY OF DENTON
This instrument was acknowledged before me on this _ day
of , 1989 by Rosemary Struble.
f j
i
Notary Public - State of Texas
My commission expires:
E
1
II
I
Il I
i
j
COMPROMISE SETTLEMENT 6 RELEASE OF ALL CLAIMS PAGE 4
I I
i
ILIA=
I
I
i
i
I
i
I
r~
I
I'! 144q, T77EI3:E=
i '
F
F
FIRE DEPARTIVr NT
217 W. McKinney Street
Oenton, Texas 76201 F
(817) W"l10
CITY of DENTON, TEXAS
ru:~
1b: Lloyd llarrell, City Manager
tTM: Chief Howard
SUBS: Oilinance Establishing Classified Positions
DATE: September 28, 1989
i
f
Please present for Council approval the enclosed ordinance to establish the f
classified positions in the Denton Fire Department arxi the number of persons in
each position in aocordmv,,e with Section 143,02, Ijocal Government Code.
1
JN/eo
I
i
l it li
E
i
j I
1
I
I
2792L
ORDINANCE NO.
AN ORDINANCE ESTABLISHING CLASSIFIED POSITIONS IN THE FIRE
DEPARTMENT OF THE CITY OF DENTON, TEXAS; PROVIDING FOR THE
NUMBER OF PERSONS AUTHORIZED FOR EPP,* CLASSIFIED POSITION;
REPEALING ALL ORDINANCES AND RESOLUT10F 'N CONFLICT HEREWITH;
AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Denton Firemen's and Policemen's Civil
Service Commission has recommended that the classifications
contained herein be established for the Fire Department of the
City of Denton; and
WHEREAS, Section 143.042, local Government Code, requires the
City Council to establish such classified positions by ordinance
to include the number of persons authorized for each classified
position; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The following positions in the Fire Department of
the City of D enton are hereby established:
FIRE CHIEF
ASSISTANT CHIEF
BATTALION CHIEF
CAPTAIN
DRIVER
FIRE FIGHTER
I MAINTENANCE/LOGISTICS OFFICER
f and all positions shall be classified positions except the Fire
Chief and one Division Commander who shall be appointed by the
Fire Chief and serve at his pleasure when a vacancy occurs in
that position.
SECTION II. The City Council of the City of Denton shall,
each year in the ordinance adopting the Budget for the City of
Denton, provide for the number of persons to be employed in each
position. Until otherwise determined by the City Council, there
shall be the following number employed in each position:
1 FIRE CHIEF
1 ASSISTANT CHIEF
4 BATTALION CHIEFS
18 CAPTAINS
32 DRIVERS
31 FIRE FIGHTERS
1 MAINTENANCE/LOGISTICS OFFICER
i
I
i ~
~I ~
M
~YLai.,y tMIN,:*
3
SECTION III. This ordinance shall be effective immediately
upon is passage and approval.
PASSED AND APPROVED this the day of ,
i 1989.
EP
ATTEST:
JENNIFER WALTERS, CITY TM
Il
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
Ik
9Y:
III
1
l
I I
ill
PAGE 2
I
4
w
I
i
I
I
I i
i I
I
l
l
1
11 , i
+4+4444 33=
no 111111 ZP4;144+
1 00 [If 111
Denton Police Department
221 N. ELM
DENTON. TEXAS 76201
To: Lloyd Harrell, City Manager
i From: Cary Matheson, Administrative Captain
Date: September 28, 1989
Subject: Ordinance Authorizing Classified Positions
Adoption of this ordinance update is necessary to accommodate additional
police officer positions approved in the 1989-90 budget request. These
positions include nine (9) police officers aftd two (2) sergeants.
i
Chief Jez will be available if further information is requested by
Council.
i
0
Gary Ma heson
~ Administrative Captain
"-J City of Denton
I~ ]
I
i
i
i '
(817) 666.8181 METRO 434.2620
s
2015L
NO.
AN ORDINANCE PROVIDING FOR THE NUMBER OF PERSONS AUTHORIZED TO BE
EMPLOYED IN EACH CLASSIFIED POSITION IN THE POLICE DEPARTMENT FOR
THE CITY OF DENTON, TEXAS; REPEALING ALL ORDINANCES AND
RESOLUTIONS IN CONFLICT HEREWITH, AND DECLARING AN EFFECTIVE DATE.
THE COU14CIL OF THE CITY OF DENTON HEREBY ORDAINS:
i
SECTION 1. That, until otherwise determined by the City
Council, the ollowing number of persona shall be authorized to
be employed in each classified position in the Police Department:
1 CHIEF OF POLICE
3 DIVISION COMMANDERS
7 LIEUTENANTS
12 SERGEANTS
81 POLICE OFFICERS.
I
l SECTION II. That all ordinances and resolutions in conflict
herew`itF are repealed to the extent of such conflict.
SECTION III. That this ordinance shall become effective
f imme ate y upon its passage and approval.
j PASSED AND APPROVED this the day of 1989.
i
RAT STEPHENS -1-ITAYOR
ATTEST:
i
II
JENNIFER WALTERS, CI SECRETARY
APPROVED AS TO LEGAL FORM;
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY.
Hilill
i
E
i
I
4+H41 F1
i
I
I
i ~
i
'.Yi'JM PNF
i
` ~~a•n.at tvsx. y
CITY of DENTON, TEXAS MUNICIPAL BUILDING DEN TON, TEXAS 76201 TELEPHONE(817)566-8200
r MEMORANDUM
Date: September 29, 1989
To: Mayor and Members of the City Council
From: Joe Thompson, Airport Manager
1 Subject: AIRPORT LEASE AGREEMENT FOR PRIVATE PAD SITES
II The attached resolution and leasing agreement will allow the
city manager to execute leases at the Denton Municipal
Airport. The leases in question are 40' X 50' pad sites that
will be used by private citizens to store their aircraft. The
resolution will not have any impact upon the urrent process
followed for the approval of major leases at the airport.
It is the intention of the resolution to expedite the process
whereby a private citizen leases tie down space for his/her
aircraft. The parameters of the lease and the Manager's
authority in relation to the lease are sot forth In the
resolution and Exhibit "A".
<~ZZ--
r Joe Thompson
f
attachments
k
3178C
i
I I
i
I
i
F
i
a y
I
Airport Advisory Board Minutes
September 13, 1988
Page 9
adopted the airport zoning regulation or by another
political subdivision.
241.902 Conflict of an Airport Compatible Lane Use Zoning
Regulation With Another Regulation
(a) If an airport compatible land use zoning regulation
conflicts with any other regulation applicable to the
same area, the airport compatible land use zoning
regulation controls.
(b) Subsection (a) applies to any conflict with respect to
the use of lard or any other matter.
(c) Subsection (a) applies to any regulation that conflicts
with an airport compatible land use zoning regulation,
whether the regulation was adopted by the political
subdivision that adopted the airport compatible land use
zoning regulation or by another political subdivision.
Planning and Zoning requested from the Airport Board opinions
on abolishing the Joint Airport Zoning Board and to readopt the
Municipal Airport Zoning Regulations. Planning and Zoning
suggested that any zoning request that is submitted to their
office be routed to the Airport Manager for review by the
Airport Board through telephone survey or special Hoard
meetings. The Airport Board could direct recommendations and
comments to the Planning and Zoning Commission for City Council
j consideration.
Mr. Gene Wright expressed great concern about the total process
as explained by Mr. Harry Persaud, with total consent of all
board members feeling the same way. Mr. Gene Wright made a
motion and seconded by Mr. George Gilkerson that the City staff
draft a document that explains in detail how the relationship
between the Airport Board and Planning and Zoning would work,
stressing that the Airport Board have the power to veto or
approve the final decision before going to the City Council.
111. Review Pad Site Private Lease Agreement.
The Airport Board reviewed a draft copy of the private
lease site agreement prepared by the City of Denton's
Legal Staff. The Airport Staff is seeking approval for a
Resolution to go before the City Council on October 3,
1989, giving the City Manager the power to approve only a
private pad site agreement, as long as the terms are per
the master Plan guidelines.
The Airport Board recommended that the lease in Principle
be used with any changes be made after each member has a
chance to read through the lease and return it to the
Airport Manager. The Airport Board recommended that the
19B9k
I
i`
fi
I
Airport Advisory Board Minutes
September 13, 1988
Page In
lease reads NO SUB-LEASING AND
ONLY. LIMITED TO AIRCRAFT USE
Don Smith made a motion to approve this format for the
City Manager to approve this type of lease for a private
pad site use only. Motion was seconded b
i All members voted yes. Y Dave Arno.
IV. Airport Manager's Report.
A. 1. F.A.A. update - pictures of the crash that
occurred on September 6, 1969 were distributed.
A discussion of the value of a 4-wheel drive
vehicle and improved communications at the
airport followed.
2• The Board was apprised of correspondence sent to
Bill Howard regarding the Port-A-Port buildings.
3, The Board viewed a letter from Bill Henderson,
F.A.A., rejecting consideration and feasibility
of a backcourse and installation of a DME.
George Oilkerson took a request to Dick Armey
with no response at this time. Mr. Gilkerson
will follow up on the matter,
4• A letter from Jack Sasser, F.A.A. Manager,
Airports Division, announcing the approval of a
$300,000.00 grant for drainage improvements was
included with a cover page of the final grant
application,
5. An accident checklist that includes all
pertinent F.A.A. emergency numbers was
distributed to the Board.
I 6. The Board viewed "Congressional Alert." Airport
Improvement Program grants increased and
accompanying reports direct the F.A.A. In
several areas, including to conduct case studies
of underutilized airports and their potential
for increasing airport capacity,
B. The Board viewed and discussed the rough draft of a
marketing folder put together with the help of
Economic Development. Suggestions were made to
change the cover art and a possible road change.
II
1909k
E
it
i
2785L
RESOLUTION NO. -
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE CERTAIN
AIRPORT LEASES FOR PAD SITES FOR T-HANGARS AT THE DENTON MUNICIPAL
AIRPORT UNDER CERTAIN CIRCUMSTANCES; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the Airport Manager has received several requests
from individuals desirous of leasing pad sites at the southeast
corner of the Denton Municipal Airport for ereC0.on and mainte-
nance of T-hangers; and
WHEREAS, the City Manager and Airport Advisory Board recom-
mend that the lease form attached hereto as Exhibit "A", and
incorporated by reference herein be used as the standard lease
form for such pad site lease agreements; and
WHEREAS, the Airport Advisory Board and the City Manager
recommend that the pad sites as reflected on the attached Exhibit
"B" be leased at twelve cents per square foot, the rental rate as
specified in the Airport Master Plan; and
WHEREAS, the City Council having recpi~cd the recommendations
of the Airport Advisory Board and City Manager and having found
that it is in the beat interest of the City to authorize the city
Manager to execute said leases in the form and under the
conditions as contained in the attachments; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY RESOLVES:
SECTION I. That the City Manager is hereby authorized to
execute Iease agreements, in the form as set forth in Exhibit "A",
for the rental of the real property located and highlighted on
Exhibit "B" and at the rate of twelve cents per square foot.
SECTION II. That this resolution shall become effective
imme at~y upon its passage and approval.
PASSED AND APPROVED this the day of
1989.
AAY-8'TE ,
ATTEST:
JENNIFER WALTEKgg TTY SECRETARY
APPROVED AS TO LEGAL FORM:
DEBRA,.jADAMI DRAY"ITCHp CITY ATTORNEY ~
i
~ I
i
I
k44 ou J0 iv w 10'It)*
o N
z on
o=
m N 01.23' 50A E 817.43' • z L4 vAAlAB~E }IjpTH TAxtNAy~
pAAtr
N 60' AOUFN 01423'50" E 711.37' I°
$ ~ -160.0 T- r----;
90.01~,211.37 P1Z0.0 160.0
1°
IIu G lu; IU ,Sv 543 18'
m {~~O ' ~~_o~ ~i4~+ 6 oI~ Io G r~,ol•° I kP
mL 211.37' J L.160.0_jC? ~Ln Ie
107
v Q I I W ►00' TDUE 10! y i-
~130.00'Iz
N o 170~z
o N 0023'50' IZ '
ICD <
f
~O
I I I
u O I.
r-1
CAJ
u cn 0 I Ln U ~ m Q I
I 1r. I tr I°.
I ~I" CD
d I~ alo 100 rlr,,
cn Iw wl ' Iw r' Ix 3 'F .j I
I~ miY Im Ivm % '90 14
jo of ~o i joo Gsr) °
' ~ O la
Im mj0 8 Im
c I I to l I° I< I$
V Li .116 Iv (0 1
to 0019 to I° g 1 2_35._00')
10 00l I°o c ' o i 60 ,DUE
G . ~Qo
V • • I r, 173.00'1.
III I I ! I I o'S1~i ho
l 130.00's- 1100.0' 3411.37' p' 15D.00' l 303.89' -J 9 175`0'
O ~I
(p m I 60 ADUE N 01 23-50- E 1165.26' -
60' ROUE
V t
I I r S 01'23'50" w1465.47'
I Poo
11
r7d~~ ~3S cn v°oo
'I
I ~ ',$N~ l 7 I
~ t
'IW
~ L_
fI
j c r z
* R1 ~I s a
L J U
I -_?"U1LG.FN4Wf _ 1404.44' _
FOUND REAAR S C0457'01' W 1447. 61 FOUND REBAR
PW S 12.38'28" E 83.24'
EXHIBIT "B"
j
I
i
i
~ Y
{ 1
1
EXHIBIT "A"
i
THE STATE OF TEXAS § PAD SITE AIRPORT LEASE BETWEEN THE
COUNTY OF DENTON § CITY OF DENTON AND
This agreement, hereinafter referred to as aLease,, is made and
executed this day of , 19 , at Denton, Texas,
by and between the CITY OF DENTON, a municipal corporation of the
State of Texas, hereinafter referred to as "Lessor", and
hereinafter referred to as "Lessee".
I. CONDITIONS OF LEASE
A. Non-Discrimination. The Lessee, for himself, his personal
representatives, successors in interest, and assigns, as a part of
the consideration hereof, does hereby covenant and agree as a
covenant running with the land that;
(1) In the construction of any improvements on, over, or
under such land and the furnishing of services thereon,
no person on the grounds of race, religion, color, sex,
or national origin shall be excluded from participation
in, denied the benefits of, or otherwise be subjected
to discrimination.
(2) The Lessee, shall use the Premises in compliance with
all requirements imposed by or pursuant to Title 490
Code of Federal Regulations, Department of Transpor-
t tatiun, Subtitle A, Office of the Secretary, Part 21,
Non-discrimination in Federally Assisted Programs of
the Department of Transportation-Effectual of Title VI
of the Civil Rights Act of 1964, and as said
Regulations may be amended.
In the event of breach of any of the above non-discriminatory
covenants, Lessor shall have the right to terminate the Lease and
to reenter and repossess said land and the facilities thereon, and
hold the same as if said Lease had never been made or issued.
B. Public Areas.
(1) Lessor reserves unto itself, its successors and
assigns, for the use and benefit of the flying public,
a right of flight for the passage of aircraft above the
surface of the Premises described herein, together with
the right to cause in said airspace such noise as may
be inh<irent in the operation of aircraft now known or
hereafter used, for navigation of or flight in the said
airspace, and for use of said airspace for landing on,
taking off from, or operating on the Airport.
I
1
ti
(2) During time of war or national emergency, Lessor shall
have the right to lease the landing area or any part
thereof to the United States Government fcr nilitary
or naval use, and, if such lease is executed, the
provisions of this instrument insofar as they are
inconsistent with the provisions of the lease to the
Government, shall be suspended.
(3) lessor reserves the right to take any action it
considers necessary to protect the aerial approaches
of the Airport against obstruction, together with the
right to prevent Lessee from erecting, or permitting
to be erected, any building or other structure on or
adjacent to the Airport which, in the opinion of the
Lessor, would limit the usefulness or safety of the
Airport or constitute a hazard to aircraft or to
aircraft navigation.
(4) This Lease shall be subordinate to the provisions of
any existing or future agreement between Lessor and the
United States or agency thereof, relative to the
operation or maintenance of the Airport.
II. LEASED PREMISES
Lessor, for and in consideration of the covenants and
agreements herein contained to be kept by Lessee, does lease to
I Lessee, and Lessee does hereby lease from Lessor the tract of land
as shown in Attachment "A", attached hereto and incorporated herein
by reference, described as follows:
For the purposes of this Lease, the term "Premises" shall mean
the property located within the land described above.
III. TERM
The term of this Lease shall be for a period of fifteen (15)
years, commencing on the day of , 1989, and
continuing through the day of unless
earlier terminated under the provisions of the Lease.
IV. RENTALS AND PAYMENTS
Lessee covenants and agrees to pay to Lessor, as consideration
for this Lease, payments and rentals and fees as follows:
A. First Year Rent. Lessee shall pay to the Lessor rent for
the use and occupancy of the Premises for the first year of this
Lease the sum of _ per square foot per year, for a
Page 2
t
C
is
I
{
ti
total of
to be paid in two (2) equal installments in
the sum of _
each six (6) months, with the first payment to be made upon
execution oP this Lease and the second payment due on of before
April 1, 1990. Thereafter, payments shall be due on October 1 and
April 1 of each year of the Lease.
B. Annual Rental Adjustments. For suosegrsent years, the
yearly rental shall be based on the All Urban Consumer Price index
(CPI-U) for the Dallas/Fort Worth, Texas, Standard Metropolitan
Statistical Area, as compiled by the U.S. Department of Labor,
Bureau of Labor Statistics, using 1982 = 100 as the base period.
The rental for years subsequent to the initial year of this Lease,
shall be computed by dividing the sum of ':he amount
of rent for the initial year of the Lease, by tho index number for
which is the first month of the initial year of
the Lease, then multiplying that amount by the index number of the
last published month immediately preceding the initial month of
each subsequent year of the Lease.
C. Payment and Penalty. All payments made hereunder by Lessee
shall be made to Lessor at the offices of the Finance Department
of the Lessor of Denton, Accounts Receivable, 215 E. McKinney,
Denton, Texas 76201, unless Lessee is notified to the contrary in
writing by Lessor. All semi-annual rental payments, other than the
first rental, shall be due and payable as set forth in Section A
hereof and shall be paid by Lessee without demand or notice from
Lessor.
V. RIGHTS AND OBLIGATIONS OF LESSEE
A. Use of Premises. Lessee is granted the right to use the
Premises for the storage of aircraft owned and operated by the
Lessee. Lessee may not use any portion of the Premises for any
other use.
B. General Access to Premisea. Subject to the reasonable
rules, regulations, or directives of Lessor, Lessee Shall, in
common with others so authorized, have the nonexclusive right and
privilege over and through the Airport property and the right of
ingress to and egress from the Premises for its employees, agents,
guests, and invitees, suppliers of materials and furnishers of
services.
C. Standards. During the Lease term, Lessee shall comply with
the following requirements and standards:
(1) AQress. Lessee shall file with the Airport Manager
and keep current its mailing address, telephone
number(s) and contacts where its authorized official
can be reached in an emergency.
(2) Uilities. Taxes And Fees. Lessee shall most all
expenses and payments in connection with the use and
occupancy of the Premises and the rights and privileges
Page 3
i i
I ~
I
nerein granted, including the timel
utilities, taxes, permit fees y payments of
assessments lawfully levied or assesslicense fe and
ed. Lesseeeherein
agrees to timely pay to all lawful taxing authorities
an ad valorem property tax on all improvements
constructed by the Lessee on the Premises, and to
comply with all tax laws pertaining to the Premises,
including those promulgated in the future.
(3) BU%4'. Reg iLu and R arrt~~~ Lessee shall
comply with all laws, codes, ordinances, rules, and
regulations, either existing or those promulgated in
the future, by the Lessor, the County of Denton, the
State of Texas, the United States of America, and the
Federal Aviation Administration, or their successors
applicable to the Premises or use thereof. Lossee's
use of the Premises shall at all times be in compliance
with and subject to any covenants, restrictions, and
conditions of record pertaining to the use and
occupancy of the Premises.
Lessee shall not operate or permit the operation of any
transmitter devices, electrical signal producers, or
machinery on the Premises which could interfere with
the electronic aircraft navigation aids or devices
located on or off Airport property. Lessee shall not
be permitted to engage in any business or operation on
the Premises which would produce obstructions to
visibility or violate height restrictions as set forth
by the Federal Aviation Administration or the Lessor.
(4) Heiaht Restri *ion And AirsDa a Pro o~+ion. The Lessee
agrees ror itself, its successors, and assigns to
restrict the height of structures, objects of natural
growth and other obstructions on the Premises to a
height as established in City of Denton ordinance 81-1,
as the same may be amended from time-to-time. The
Lessee also agrees for itself, its successors, and
assigns to prevent any use of the Premises which would
interfere with landing or taking off of aircraft at the
Airport, or otherwise constitute an airport hazard.
Lessee hereby forfeits all claims to aviation rights
over the Premises.
(5) Maintenance. Lessee shall be responsible for all
maintenance and repair of the Premises, including
buildings, structures, grounds, pavements, and
utilities. Lessee shall be responsible for grass
othernmaintenance o requirements removal as of may arise e.foLessee
agrees to keep the Premises, together with all
improvements, in a safe, clean and attractive condition
at all times. Lessee shall not change the uriginal
color or texture of the exterior walls of any
Page 4
I~
I
i~
I
{
i.'
structures or improvements without the written consent
of Lessor.
•inq of Buildings. During the term of this
Le
(a) n Lessor shall have the right to require, not
Lease, five years, that the exterior
more than once every Premises
of each hangar or building located on the Premem es
be reviewed by the Airport Board for the purpose
of determining whether painting of the exteriors
ars is necessary. if the
of such buildings or hang is necessary, it
Airport Board determines painting upon the
shall furnish a recommleedation to mthis ay, effect to counci*
the City council. ire Lessee to repaint
'f Board's recommendation, toI~essorls specif f icat ions
said exteriors according tint, quality o
(to specify color of paint, of workmanship and
number of applications, 4u r or the year and month in which each hangaLess euishall
is to be painted, if needed).
complete the painting in accordance with such
specifications within six (6) months of receipt of
notice from Lessor. Lessee agrees rn pay all costs
painting. Failure of Lessee to
of the required required by Lessor's city
complete the painting r month period shall
council within the six (6)
constitute Lessee's default under this Lease.
Lessee shall not utilize or permit others
(b) S outs rts,
to utilize the disabled aircraft airctorageraofft wrecked
or permanently other
{ automobiles, vehicles of any type, or any
1 equipment or itejas which would distract from the
appearance of the Premises.
Q9it Possession. Lessee shall quit possession of the
(6) ad deliver up the
Premises at the end of thissd Lease,
condition as existed when
Premises to Lessor in as 900 reasonable wear and
possession was taken by
tear excepted,
collect and
Lessee shall properly store,
of all chemicals and chemical residues;
dispose ine, collect and dispose of all
properly store, conf in the atmosphere, and
paint, including paint spray state and
paint products; and comply with all locale storage,
federal laws and regulations governing
handling or disposal of chemicals and paints. Lessee
shall not utilize, store, dispose, or transport any
fluids, solids or gaseous substances on the
material, the Environmental
Premises which are considered by the
to be a hazard to the health
Protection Agency of the
general public and undertake any activity on
would produce noxious odors.
Premises that
i,
I
Page 5
~I
i
i
Il '
1 ~ A
I ' c
9
(8) signs. Lessee shall not place any signs on the
premises identifying Lessee.
(9) Use of Runways and Taxiways. That because of the
present fifteen thousand (15,000) pound continuous use
weight bearing capacity of the taxiways of the Airport,
Lessee shall limit all aeronautical activity including
landing, take-off and taxiing, to aircraft having an
actual weight, including the weight of its fuel, of
fifteen thousand (15,000) pounds or less, until such
time that the designated taxiways on the Airport have
been improved to handle aircraft of a greater weight.
Should Lessee disregard the provisions of this section,
Lessor may immediately terminate this Lease. Lessee
agrees to pay to Lessor upon demand for any damage, as
determined by Lessor, to Airport property that results
from a violation of this section.
(10) Parkin - The parking of motor vehicles on Airport
property by Lessee, Lessee's guests or invitees, shall
be subject to any regulations, restrictions or
directions imposed by Lessor.
C. Connection to Utilit s. Lessee may connect to any exist-
ing water mains serving the Premises, in accordance with and upon
payment of any tap or connection fees, as specified by Lessor's
ordinances applicable to utility customers, provided, however,
Lessee shall not be liable to Lessor for any water or sewer pro
r rata payments as a result of the connections made.
VI. RIGHTS AND OBLIGATIONS OF LESSOR
A. Peaceful Enjoyment. That on payment of rent, fees, and
performance of the covenants and agreements on the part of Lessee
to be performed hereunder, Lessee shall peaceably hold and enjoy
the Premises and all rights and privileges herein granted.
B. F.,SemeRts. Lessor shall have the right to establish
easements, at no cost to Lessee, upon the rremises for the purpose
of providing utility services to, from, or across the Airport
property or for the construction of public facilities on the
Airport. However, any such -asements shall not interfere with
Lessee's use of the Premises and Lessor shall restore the property
to its original condition upon the installation of any utility
services on, in, over or under any such easement at the conclusion
of such construction. Lessee shall not have the right to levy
fees, charges, or receive any compensation for any exercised right
j of easement by Lessor or Lessor's authorized agent.
VII. LEASEHOLD AND TAXIWAY IMPROVEMENTS
A. Improvgments by Lessee. Lessee shall construct upon the
Premises, at his own cost and expense, an aircraft storage hanger
and connecting taxiway which shall meet a fifteen thousand (15,000)
pound continuous use weight bearing capacity.
I
Page 6
I I
1 ~
i
1
y.
X
t A
T
B. $€quired Building_ Plans. Lessee shall, prior to
constructing any improvements on the Premises, submit to the Lessor
for its approval, detailed construction and building plans and
specifications for the proposed improvements. The required plat
and plans shall be submitted in the form and manner specified by
Lessor's ordinances and Lessee shall, at the time of submission,
pay all processing, permit, and approval fees applicable thereto,
as specified by Lessor's ordinances. Any building, hanger, or
other improvement plans and specifications submitted for initial
construction, or any additional improvements to be made thereafter,
shall conform to the following requirements:
- (1) Buildings, hangers, or structures shall conform with
and be compatible with the overall size, shape, color,
quality, design, appearanrd, and general plan of the
program established by the Lessor's Master Plan for the
Airport, as approved by the City Council, copies which
are on file at the Office of the Airport Manager and
the City Secretary.
(2) The regulations and requirements of the Lessor's
Building, Fire, Electrical, Plumbing, and other
applicable Codes and ordinances of Lessor applicable
to the improvements to be made.
(3) All buildings, including hangers, shall be designed and
constructed so as to have an anticipated life of at
least fifteen (15) years.
(4) Any rules or regulations of any Federal or State agency
having jurisdiction thereof.
(5) Contain the estimated cost of the construction of the
improvements to be made.
(6) All hangars shall be constructed on a concrete slab.
C. BF2r2ya1Of Plano. Within sixty (60) days of proper
submission of the plans, and payment of the applicable fees, Lessor
shall approve or disapprove the plans. Should Lessor fail to
approve or disapprove of the required plans within the sixty (60)
days, the plans shall be deemed approved. Should the Lessor timely
disapprove the plans, it shall give notice to the Lessee of the
reason fcr the disapproval. No construction of any improvements
shall begin until and unless the plans and specifications are
approved by Lessor.
D. Airolane TaXivav s~.eQa, Lessee shall be responsible for
the maintenance of the taxiway access provided, and shall keep the
taxiway in good condition, free of obstructions and defects. The
use of the improved taxiway access shall be subject to the
reasonable rules, regulations, or directives of Lessor.
F. R1aht of Lesanr r~ Dinh u'-gar orof or Building. In the
even+, that Lessee should elect to sell his hangar situated upon the
Page 7
f
i
w
8
I 's
Premises at the time Lessee has the authority to do so, Lessor
shall first be offered the right to purchase the improvements at
a value determined by having such improvements appraised by three
appraisers, one appointed by Lessor, one appointed by Lessee, and
one appointed by the two appraisers. The costs of the appraisal
shall be paid by Lessor. Within sixty (60) days of the delivery
of a written appraisal report by the appraisers to Lessor, shall
notify Lessee in writing of its decision to purchase all or part
of the hangers or buildings to be sold. If Lessor exercises its
right to purchase, it shall make payment to Lessee of the appraised
value of the buildings or hangers to be purchased within thirty
(30) days of the written notice.
F. Removal of Hangars. In the event that Lessee should remove
the hangar from the Premises, where such removal is authorized by
this Lease, Lessee herein agrees to comply with the following
terms:
(1) Prior to commencing the hangar removal process, the
Lessee and Lessor shall agree on the best method to
remove the building, including where to cut water
lines, electrical wire, plumbing and other fixtures or
utilities, so as to cut said fixtures to allow the
future use of these fixtures.
(2) The hangar shall be removed completely from the surface
of the concrete slab and up, with the exception of cut
utility lines. All interior fixtures shall be removed
including sinks, commodes, dividing walls and all other
items or fixtures that would prevent the concrete slab
from being as free as possible from all obstructions.
(3) Removal of hangars shall begin and be completed prior
to Lessee's designated termination date.
I
(6) The hangar slab, the aircraft parking apron, the
taxiway, and all other improvements on the Premises
shall remain on the Premises and shall become the
property of the Lessor without cost to Lessor.
(5) Lessee shall be responsible for the removal of all
refuse and debris from the Premises prior to vacating
the Premises.
(6) Lessee shall be responsible for all costs involved in
the removal of the hangar, including costs of hermits
or fees.
(7) Lessee shall be responsible for any damage caused to
any improvements on the Premises during the removal
process, and Lessee herein agrees to repair or replace,
at Lessee's expense, any improvements damaged by Lessee
during the removal of said structures.
I
i
Page B
i
VIII. SUBROGATION OF MORTGAGEE
Lessee shall have the right to place a first mortgage lien
upon its leasehold in an amount not to exceed eighty percent (80%)
of the cost of the capital improvements. The terms and conditions
of such mortgage loan shall be subject to the approval of Lessor
and Lessee shall submit copies of the loan documents, includirg the
loan application, to Lessor. If Lessor approves the loan, Lender's
duties and rights are as follows:
(1) The Lender shall have the right, in case of default, to
assume the rights and obligations of Lessee herein and
become a substituted Lessee, with the further right to
assign the Lessee's interest to a third party, subject to
approval of Lessor. Lender's obligations under this Lease
as substituted Lessee shall cease upon assignment to a
third party as approved by Lessor.
(2) As a condition precedent to the exercise of the right
granted to Lender by this paragraph, Lender shall notify
Lessor of all action taken by it in the event payments on
such loans shall become delinquent. Lender shall also
notify Lessor, in writing, on any change in the identity
or address of the Lender.
(3) All notices required by Article XI herein (Cancellation
by Lessor) to be given by Lessor to Lessee shall also be
given by Lessor to Lender at the same time and in the same
manner provided Lessor has been furnished with written
notice of Lender's interest and its address. Such notice
shall be given to the City Secretary and the Airport
Manager. Upon receipt of such notice, Lender shall have
the same rights as Lessee to correct any default.
IX. INSURANCE
A. Lessee shall maintain continuously in effect at all times
during the term of this Lease or any extension thereof, at Lessee's
expense, the following insurance coverage:
(1) Comprehensive General Liability Insurance covering the
Premises, the Lessee, its personnel and its operations
on the Airport, for bodily injury and property damage
in the minimum amount of $250,000, combined single
limits on a per occurrence basis.
(2) Fire and extended coverage for replacement value for
all facilities used by the Lessee either as a part of
this Lease or erected by the Lessee subsequent to the
execution of this Lease.
8. All policies shall be issued by a company authorized to do
business in the Sate of Texas, be approved by the Lessor, copies
of which shall be provided to Lessor. The policies shall name the
Lessor as an additional named insured and shall provide for a
Page 9
Ii
i
i J
~ J
11 J
I~
f i
9
minimum of thirty (30) days written notice to the Lessor prior to
the effective date of any cancellation or lapse of such policies.
C. During the term of this Lease, and not more often than once
every five (5) years, Lessor herein reserves the right to adjust
L or increase the liability insurance amounts required of the Lessee,
and to require any additional rider, provisions, or certificates
of insurance, and Lessee hereby agrees to provide any such
insurance requirements as may be required by Lessor; provided
however, that any requirements shall be commensurate with insurance
requirements at other public use airports similar to the Airport
_ in size and in scope of aviation activities, located in the
southwestern region of the United States. For the purpose of this
Lease, the Southwestern region of the United States shall be the
states classified as the Southwestern region by the Federal
Aviation Administration.
D. Lessee herein agrees to comply with all increased or
adjusted insurance requirements that may be required by the Lessor
throughout the original or extended term of this Lease, including
types of insurance and monetary amounts or limits of insurance, and
to comply with said insurance requirements within sixty (60) days
following receipt of a notice in writing from Lessor stating the
increased or adjusted insurance requirements. Lessee shall have
the right to maintain in force types of insurance and amounts of
insurance which exceed Lessor's minimum insurance requirements.
X. INDEMNITY
i
A. Lessee agrees to indemnify and hold harmless Lessor a 1 its
agents, employees, and representatives from and against all lia-
bility for any and all claims, suits, demands, or actions arising
from or based upon intentional or negligent acts or omissions on
the part of Lessee, its agents, representatives, employees, mem-
bers, patrons, visitors, contractors and subcontractors, or
sublessees, if any, which may arise out of or result from Lessee's
occupancy or use of the Premises or activities conducted in
connection with or incidental to this Lease.
8. This Indemnity Provision also extends to any claim or
liability for harm, injury, or any damaging events which are
directly or indirectly attributable to premise defects or
conditions which may now exist or which may hereafter arise upon
the Premises, any and ill such defects being expressly waived by
Lessee. Lessee understands and agrees that this Indemnity
Provision shall apply to any and all claims, suits, demands, or
actions based upon or arising from any such claim asserted by or
on behalf of Lessee or any of its members, patrons, visitors,
agents, employees, contractors and subcontractors, or sublessees,
if any.
C. Lessee agrees to give the Lessor prompt and timely notice
of any such claim made or suit instituted which in any way,
directly or indirectly, contingently or otherwise, affects or might
affect the Lessee or the Lessor. Lessee further agrees that this
Page 10
I'
s
lI ~ X
1
5
Indemnity Provisicn shall be considered as an additional remedy to
Lessor and not an exclusive remedy.
XI. CANCELLATION BY LESSOR
` All the terms, restrictions, covenants, and conditions
pertaining to the use and occupancy of the Premises are conditions
of this Lease and the failure of the Lessee to comply with any of
the terms, conditions, restrictions, covenants, and conditions
shall be considered a default of this Lease, and upon default, the
Lessor shall have the right to invoke any one or all of the
following remedies.
A. In the event that Lessee fails to comply with any of the
terms, conditions, restrictions and covenants contained in this
Lease, such failure shall constitute an event of default under the
Lease, and Lessor shall give Lessee notice of said breach, and
request Lessee to cure or correct the same. Should Lessee fail to
correct said violation(s) or breach within thirty (30) days
following receipt of said notice, then Lessor shall have the right
to terminate this Lease. Should this Lease be terminated by Lessor
for failure of Lessee to correct said breach or violation within
the thirty (30) day cure time, Lessee shall forfeit all rights to
all improvements on the Premises and all improvements on the 1
Premises shall become the property of the Lessor.
B. In addition to termination of this Lease for the breach of
terms and conditions herein, the Lessor shall have the right to
terminate this Lease for the following reasons:
l
(1) In the event that Lessee shall Li?e a voluntary
petition in bankruptcy or proceedings in bankruptcy
shall be instituted against Lessee and Lessee J
thereafter is adjudicated bankrupt pursuant to such i
proceedings, or any court shall take jurisdiction of
Lessee and its assets pursuant to proceedings brought
under the provisions of any federal reorganization acts
or if a receiver shall take jurisdiction of Lessee and
its assets pursuant to proceedings brought under the
provisions of any federal reorganization acts or if a
receiver for Lessee's assets is appointed.
(2) In the event that Lessee should make an assignment of
this Lease, for any reason, without the approval of and
written consent from Lessor.
C. Upon termination or cancellation of this Lease and provided
dll monies due Lessor have been paid, Lessee shall have the right
to remove its personal property, provided such removal does not
cause damage to any part of the hangar, structure or improvements.
Lessee shall remove all personal property from the Premises within
ten (10) days after the termination. If Lessee fails to remove
its personal property as agreed, Lessor may elect to retain
possession of such property or may sell the aame and keep the
Page 11
it
f i
E
I
1 ,
proceeds, or may have such property removed at the expense of
Lessee.
where, upon termination of the Lease, the fixed improvements
become the property of Lessor as provided herein, Lessee shall
repair, at its own expense, any damage to the fixed improvements,
resulting from the removal of personal property and shall leave
the Premises in a neat and clean condition with all other
improvements in place.
E. Failure of Lessor to declare this Lease terminated upon the
default of Lessee for any of the reasons set out shall not operate
to bar, destroy, or waive the right of Lessor to cancel this Lease
by reason of any subsequent violation of the terms hereof. The
acceptance of rentals and fees by Lessor for any period or periods
after a default of any of the terms, covenants, and conditions
herein contained to be performed, kept, and observed by Lessee
shall not be deemed a waiver of any rights on the part of the
Lessor to cancel this Lease for failure by Lessee to so perform,
keep or observe any of the terms, covenants or conditions hereof
to be performed, kept and observed.
XII. CANCELLATION BY LESSEE
Lessee may cancel this Lease, in whole or part, and terminate
all or any of its obligations hereunder at any time, by thirty (30)
days written notice, upon or after the happening of any one of the
following events:
(1) issuance by any court of preventing or restraining the
use of said Airport or any part thereof for Airport
purposes;
(2) the breach by Lessor of any of the covenants or agreements
contained herein and the failure of Lessor to remedy such
breach for a period of ninety (90) days after receipt of
a written notice of the existence of such breach;
(3) the inability of Lessee to use the Premises and facilities
continuing for a longer period than ninety (10) days due
to any law or any order, rule, or regulation of any
appropriate governmental authority having jurisdiction
over the operations of Lessor or due to war, earthquake
or other casualty; or
(4) the assumption or recapture by the United States Govern-
ment or any authorized agency thereof of the Premises for
the maintenance and operation of said Airport and
facilities or any substantial part or parts thereof.
upon the happening of any of the four events listed in the
preceding paragraph, such that the Premises cannot be used for
authorized purposes, then Lessee may cancel this Lease as afore-
said, or may elect to continue this Lease under its terms.
Page 12
i
l I
r
XIII. OPTION
Lessee shall have a first option to lease the premises for an
additional term at the end of this Lease by giving the Lessor
notice, in writing, not later than six (6) months before the end
of the fifteen (15) year term. Should Lessee choose to exercise
such option, he shall have the right to sign a new lease for five
(5) years for the Premises at the then current land rental rates
established by Lessor.
XIV. MISCELLANEOUS PROVISIONS
A. Subletting or Assignment. The Lessee shall not rent, or
sublease the Premises or assign this Lease without first obtaining
the written consent of Lessor. If approved by Lessor any sublessee
or assiqnee shall be subject to the same conditions, obligat_ons
and terms as set forth herein.
B. Lease Binding on Successors and Assigns. All covenants,
agreements, provisions and conditions of this Lease shall be
binding upon and inure to the benefit of the respective parties
hereto and their legal representatives, successors or assigns. No
modification of this Lease shall be binding upon either party
unless written and signed by both parties.
C. Severability. If any provision hereof shall be finally
declared void or illegal by any court or administrative agency
having jurisdiction, the entire Lease shall not be void; but the
remaining provisions shall continue in effect as nearly as possible
in accordance with the original intent of the parties.
D. Notice. Any notice given by one party to the other in
connection with this Lease shall be in writing and shall be sent
by registered mail, return receipt requested, with postage and
registration fees prepaid, as follows:
If to Lessor, addressed to: If to Lessee, addressed to:
City Manager
city of Denton
215 E. McKinney
Denton, Texas 76201
Notices shall be deemed to have been received on the date of
receipt as shown on the return receipt.
G. Headings. The headings used in tnis Lease are intended
for convenience of reference only and do not define or limit the
scope or meaning of any provision of this Lease.
H. Governing Law. This Lease is to be construed in accordance I
with the laws of the State of Texas.
Page 1}
II
1
7 1
..a
M e w4u
F ~A
4 V.MTy
l
1
IN WITNESS WHEREOF, the parties have executed this Lease as
of the day and year first above written.
CITY OF DENTON, TEXAS, LESSOR
BY:
LLOYD HARRELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY: -
Il
LESSEE
1
BY:
TITLE:
I
C: \WP50\PADSITE. 1
k
;
hf
I
Page 14
i
f
7
i
a~
1
i
I r
l
I
l1w
Ii
5
M
} R
Y I
r'`r CITY OIL HONDO
1600 AVENUE M • HONDO, TEXAS 78861
MOM
(512) 426-3378
September 11, 1989
i4
Honorable Ray Stephens ESEP14M
Mayor, City of Denton
215 E. McKinney St.
Denton, TX 76201 RSA
Re; Support of Proposition No. 8
Dear Mayor Stephens.,
The City of Hondo believes that the State of Texas is in
need of additional correctic:ial and mental health treatment
institutions to maintain law and order throughout. the State and
to help facilitate the treatment and rehabilitation of inmates at
correctional and mental health institutions. We are writing to
enlist your support to help ensure that these goals are met.
As you are probably already aware, the 71st Legislature
enacted Senate Joint Resolution 24 which proposes an amendment to
the Texas Constitution for the issuance of general obligation
bonds for acquiring, constructing or equipping correctional
institutions, youth correctional institutions and mental health
and mental retardation institutions. SJR 24 will appear on the
November 7, 1989 general election ballot as Proposition No. B.
We are enclosing a Resolution, which the Hondo City Council is
scheduled to adopt on September 14, 1989, supporting the passage
of Proposition Nn. 8. We ask that your City consider adopting
r~ the draft Resolution at your next meeting and joining us in
support of Proposition No. 8. If your council aJopts the
Resolution, please send me a copy at the above address.
f
i
a
I
s
a
3
I
September 11, 1989
Page 2
Please do not hesitate to contact us if you have any
questions regarding the Resolution or the need for additional
correctional institutions. We look forward to hearing from you.
Sincerely,
I
=1 P, ) GA~tt
Tony,Haiidt
Mayor
I
Mike Rhea
City Manager
TH/lak
Enclosure
{
i
t
a
i
i
I I
I
i
RESOLUTION NO.
A RESOLUTION IN SUPPORT OF PROPOSITION NO. 8 FOR FUNDING
CONSTRUCTION OF NEW CORRECTIONAL FACILITIES; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, Governor Clements called for the construction of
additional prison beds in his legislative requests; and
WHEREAS, the Texas Board of Corrections requested funding for
construction of additional prison beds; and
WHEREAS, the Texas Legislature appropriated funds for the
construction of additional prison beds; and
WHEREAS, Senate Joint Resolution 24 Was enacted during the
71st Legislative Session; and
WHEREAS, SJR 24 proposes an amendment to the Texas
Constitution providing for the issuance of general obligation
bonds for acquiring, constructing, or equipping corrections
institutions, youth corrections institutions, statewide law
enforcement facilities, and mental health and mental retardation
institutions; and
WHEREAS, SJR 24 will appear on the November 7, 1989 general
I election ballot as Proposition No. 8.; NOW, THEREFORE,
THE. COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION I. That the City of Denton supports the passage of
ProposTIToo No. 8.
SECTION II. That the City of Denton encourages its citizens
to vote in the November 7, 1989 general election and to vote
"yes" on Proposition No. 8.
SECTION III. That the City of Denton encourages other ~I
munic pa t es in Texas to support efforts in favor of
Proposition No. 8 and to resolve in support of passage of
Proposition No. 8.
i
I
1
PASSED AND APPROVED this the day of ,
1989.
RAY STEPHENS, MAYOR
ATTEST:
f
JENNIFER T , CITY SECRETARY
I APPROVED AS TO LEGAL FORM:
I DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
1
i
I BY: 1
i
I
i
PAGE 2
I
' i.
I
i
I
i
i
l
1
i
i
I
I
1
I
f
i ~
rZ C.
2794E
RESOLUTION NO.
A RESOLUTION NOMINATING A CANDIDATE FOR MEMBERSHIP TO THE BOARD
OF DIRECTORS OF THE COUNTY WIDE APPRAISAL DISTRICT; AND DECLARING
` AN EFFECTIVE DATE.
f
NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION I. That the City Council of the City of Denton,
Texasiereigy- nominates as a candidate
for membership of the Boar o rectors of a County Wide
Appraisal District for the County of Denton, Texas.
SECTION II. That this Resolution shall become effective from
and alter itsate of passage.
i
1 PASSED AND APPROVED this the day of 1989,
i
i
I
I
PAY I
i
EP E , FRYOR
i
ATTEST:
F
,I
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY I
1
BY: JL,
C~~'3dlLKL ,
' I
Il
I
F
I
1
1
I I
I
III,
l
I
k
I
I
I
i
I
I
I
l