1996-240J \~PDOCS\ORD\GTESETTL ORD
ORDINANCE NO. ~ ' ~/~O
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE
ON BEHALF OF THE CITY OF DENTON A SETTLEMENT AGREEMENT AND RELEASE
OF ALL CLAIMS WITH GTE SOUTHWEST INCORPORATED RELATING TO THE
SETTLEMENT OF THE CASES STYLED GTE SOUTHWEST INCORPORATED VS. CITY
OF DENTON, ET AL., AND CITY OF RUSK, ET AL. VS GTE SOUTHWEST, INC
AND THE CITY OF DENTON, TEXAS. ET AL., COMPLAINT AGAINST GTE
SOUTHWEST INCORPORATED BEFORE THE PUC; AND DECLARING AN EFFECTIV~
DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS.
~ That the Mayor of the City of Denton is hereby
authorized to execute on behalf of the City of Denton a Settlement
Agreement and Release of all Claims with GTE Southwest Incorporated
relating to the settlement of the cases styled GTE SOUTHWEST
INCORPORATED VS. CITY OF DENTON, ET AL., and CITY OF RUSK, ET AL
VS. GTE SOUTHWEST, INC. AND THE CITY OF DENTON, TEXAS, ET AL..
COMPLAINT AGAINST GTE SOUTHWEST INCORPORATED before the PUC, in
accordance wlth the attached Settlement Agreement, which is
incorporated herein and made a part hereof for all purposes In
the absence of the Mayor, the Mayor Pro Tem is hereby authorized to
execute the attached settlement agreement.
~ That th~s ordinance shall become effective
immediately upon Its passage and approval
PASSED AND APPROVED this the day of /~~, 1996.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM.
HERBERT L. PROUTY, CITY ATTORNEY
NO 95-50259-367
GTE SOUTHWEST INCORPORATED, § IN THE DISTRICT COURT OF
a Delaware Corporation, §
Plaintiff, §
VS § DENTON COUNTY, TEXAS
THE CITY OF DENTON, A TEXAS §
INCORPORATED MUNICIPALITY, §
et al, §
Defendant § 367TH JUDICIAL DISTRICT
NO 95-5-00360
CITY OF RUSK, et al, § IN THE 2D JUDICIAL
Plaintiffs, §
v § DISTRICT COURT OF
GTE SOUTHWEST, INC, §
Defendant § CHEROKEE COUNTY, TEXAS
PUC DOCKET NO 14152
SOAH DOCKET NO 473-95-1002
COMPLAINT OF CITY OF DENTON, § PUBLIC UTILITY COMMISSION
ET AL AGAINST § OF
GTE SOUTHWEST INCORPORATED § TEXAS
ROWSET 1021961021
SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS
Th~s Settlement Agreement and Release of All Claims ("Agreement") is entered ~nto by
and between the City of Denton, a Texas incorporated munlc~pahty ("City"), and GTE
Southwest Incorporated, a Delaware corporation ("GTE") The C~ty and GTE are
referred to singularly as a "Party" and collectively as "the Partms"
I
THE RIGHT-OF-WAY LITIGATION
Sect~oq 1,1 Denton L~tlgatlon On April 25, 1995, GTE hied an action styled
GTE Southwest IncorDorated vs. City of Denton. et al., Cause No 95-50259-367, ~n the
367th District Court of Denton County, Texas ("Denton Lawsuit")
Section 1.2 Rusk Litigation On May 19, 1995, several Cities flied an action
styled C~ty of Rusk. an ~ncorporated Texas mun~c~Dahty, et al. v. GTE Southwest. Inc..
Cause No 95-5-00360, in the D~stnct Court of Cherokee County, Texas ("Rusk
Lawsuit")
~ The PUC ComDlalnt On April 29, 1995, the Cities which were
parties to the Rusk Lawsuit filed a Complaint against GTE at the Texas Public Utility
Commission styled Complaint of City of Denton. Texas. et al. Against GTE Southwest
Incorporated, PUC Docket No 14152, SOAH Docket No 473-95-1002 ("PUC
Complaint," collectively referred to w~th the Denton Lawsuit and the Rusk Lawsuit as
the "R~ght-of-Way Litigation")
~ The Right-of-Way L~t~gat~on On ~ ~ 1996, the City
Counml of Denton authorized the Mayor to settle the Right-of-Way Lit~gat~on pursuant to
the terms outlined In th~s Agreement
II
~ ~ C~ty covenants and warrants that it has the
nght to compromme ali claims asserted ~n the R~ght-of-Way L~tigatlon as to Denton, the
Mayor ~s authonzed to b~nd the City by executing th~s Agreement on ~ts behalf, and that
~t has not assigned to any third party such claims, or any part of such claims against
GTE
~ D~smmsal of Right-of-Way L~tigatlon City agrees to d~smlss with
prejudme any and all claims, counterclaims and causes of action ~t raised against GTE
~n the Denton Lawsuit, the Rusk Lawsmt, and the PUC Complaint, promptly upon
execution of this Agreement
ROWSET - 1 - 1021661034
III
Section 3.1 Right to Comoromme GTE covenants and warrants that Hardy E
White, ~n h~s capacity as Acting Regional President - GTE Texas/New Mexmo Region,
has the authonty to execute th~s Agreement on GTE's behalf and to b~nd GTE to ~ts
terms, and that GTE has not assigned to any third party such claims, or any part of
GTE's claims against the C~ty
Section 3.2 lD~sm~ssal of L~hgat~on GTE agrees to d~smlss w~th prejudice any
and all claims, counterclaims and causes of action ~t raised against the C~ty ~n the
Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of
th~s Agreement
Sectlon 3.3 Cash Payment W~thln seven (7) bus~ness days of the C~ty's hnal
reading and enactment of the R~ght-of-Way Ordinance at Attachment "A" ("New
Ordinance") hereto, whmh ~s ~ncorporated In th~s Agreement for all purposes as ~f fully
set forth here~n, GTE w~ll pay to the C~ty the sum of $1,255,649 76 Th~s sum
comprises the following
a $205,147 00, whlch is the amount of all nght-of-way fee payments
w~thheld by GTE pending resolution of the Right-of-Way Lit~gat~on
("Withheld Amounts") plus four percent (4%) ~nterest on such amount,
b $979,388 76, which represents a compromise of all claims related to
payment of compensation by GTE to the C~ty for use of the City's rights-
of-way from the beginning of time to and ~nclud~ng December 31, 1996,
and
c $71,114 00, which represents advance payment of reasonable
compensation for use of the C~ty's nghts-of-way for the penod not covered
by Section 3 3a or b above and ending on December 31, 1996
GTE agrees not to pass through to ~ts'present or future customers the ~nterest amount
described ~n Sechon 3 3a and GTE agrees that all amounts that GTE ~s authorized to
pass through to its customers under 3 3a above have already been passed through
GTE agrees not to pass through to ~ts present or future customers the amount
described in Section 3 3b hereof The amount ~n Section 3 3c above shall be passed
through to GTE's customers Jack Stowe w~ll be permitted to meet w~th a GTE-
designated representative, on or about October 16, 1996, to rewew GTE documents
conhrmtng the Withheld Amounts
~ Termination of Ordinance or Authority Any current or prior
ordinance and/or authonty Imposing a fee upon GTE for the use of the City's nghts-of-
way shall expire on or before December 31, 1996, and shall be replaced with the New
ROWSET ' 2 - fO2196102t
Ordinance which shall take effect on January 1, 1997 The Pad~es agree that the cash
payment described ~n Sectmn 3 3 above includes an amount which the City has
determined to be fair and reasonable compensation for GTE's use of the City's r~ghts-
of-way dunng the penod from and ~ncluding the date of the last payment made by GTE
to the City for use of its r~ghts-of-way to and ~nclud~ng the effective date of the New
Ordinance
IV
NEW RIGHT-OF-WAY ORDINANCE
Secttor~ 4,1 New R~ght-of-Way Ordinance The C~ty and GTE agree to execute,
adopt and enact the New Ordinance If a current ordinance or charter of the C~ty
requires a ublity entering ~nto an ordinance such as the New Ordinance to pay the cost
of publication of such ordinance ~n a local newspaper, GTE agrees to pay such cost of
publication of the New Ordinance
Section 4.2 City's Enactment of New Ordinance The City agrees to pass and
enact the New Ordinance in consecutive readings, as required by law, with the hrst
reading to be held on or before ~ _,..~_, 1996, and w~th any and all required
readings occurring on or before ~.~ , 1996
~ GTE's Acceotance of New Ordinance GTE agrees to execute and
file with the City Secretary its acceptance of the New Ordinance w~thin fourteen (14)
business days of receipt of the executed New Ordinance after the final reading and
passage of the New Ordinance by the City
~ Access L~ne Fee GTE agrees that the C~ty may set an Access
Line Fee as that term is defined in the New Ordinance up to $17 00 per year for each
residential Access Line and up to $24 00 per year for each bus~ness Access Line As
of September 30, 1996, there were 29,234 residential Access L~nes and 18,399
bus~ness Access L~nes In the C~ty of Denton The number of Access Lines ~s subject to
change.
V.
MUTUAL RELEASES AND DISMISSAL OF CLAIMS
IN RIGHT-OF-WAY LITIGATION
~ Release by Cit~/ In consideration of the above, the C~ty, ~n ~ts own
behalf and on behalf of its successors and assigns, hereby ~rrevocably and
unconditionally fully releases, acquits and discharges GTE Southwest Incorporated, ~ts
successors, parent corporation, affiliated and subsidiary corporations, officers,
d~rectors, employees, attorneys, representatives and agents from any and all claims
from the beginning of time up to and including December 31, 1996, (a) that relate to the
payment by GTE to the City of reasonable compensation for GTE's use of C~ty r~ghts-of-
way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass
ROWSET - 3 ' 1021961021
through of such payments by GTE to ~ts customers, which the City made or could have
made ~n the lawsuits styled GTE Southwest Incorporated vs. City of Denton. et al.,
Cause No 95-50259-367, in the 367th Distnct Court of Denton County, Texas, C~ty of
Rusk. an incoroorated Texas municipality, et al. v. GTE Southwest. Inc.. Cause No 95-
5-00360, in the D~strlct Court of Cherokee County, Texas, and the proceeding styled
Com01mnt of City of Denton. Texas. et al. Aoa~nst GTE Southwest Incorporated. PUC
Docket No 14152, SOAH Docket No 473-95-1002 In the Texas Public Utlhty
Commission
Section 5.2 Release bv GTE In considerat~on of the above, GTE Southwest
Incorporated, ~n its own behalf and on behalf of ~ts successors and assigns, hereby
~rrevocably and unconditionally fully releases, acquits and d~scharges the City of
Denton, Texas, ~ts officials, eroployees, representatives, attorneys and agents from any
and all cta~ms from the beginning of hme up to and including December 31, 1996,
(a) that relate to the payroent by GTE to the C~ty of reasonable compensation for GTE's
use of City rights-of-way, whether by agreement, ordinance or otherwise, and (b) that
relate to,the pass through of such payments by GTE to its customers, whmh GTE made
or could have made in the lawsuits styled GTE Southwest Incorporated vs. C~ty of
Denton. et al.. Cause No 95-50259-367, in the 367th D~stnct Court of Denton County,
Texas, City of Rusk. an ~ncoroorated Texas roumcioallty, et al. v. GTE Southwest. Inc.,
Cause No. 95-5-00360, in the District Court of Cherokee County, Texas, and the
proceeding styled Comolalnt of City of Denton. Texas. et al. Against GTE Southwest
J[]c,.o.[IZO. r. JLe~, PUC Docket No 14152, SOAH Docket No 473-95-1002 in the Texas
Public Utility Commission
~ ~ The Parties agree to submit, within ten (10)
days after execution by the City and GTE of this Agreement, an agreed order of
dismissal of all claims, counterclaims and causes of action, w~th prelud~ce, by each
Party against the other ~n the Denton Lawsuit, the Rusk Lawsuit, and the PUC
Complaint If any of the agreed orders of dismissal are not accepted or s~gned by the
Court or the PUC, respectively, both Parties agree to file motions for nonsu~t w~th
prejudice regarding all claims, countemlalms and causes of action raised by such
Partms in Court or PUC Each Party shall pay all court costs incurred by such Party
VI.
MISCELLANEOUS PROVISIONS
~ This Agreement is a compromise settlement of d~sputed ~ssues and
claims and, therefore, will not be construed as an admission of liability of any Party or of
the validity of any claims or potential claims made by any Party against any other Party
or otherwise construed as an admission of any Party and, as such, w~ll not be offered or
received as evidence in any proceeding, provided that nothing will prevent this
Agreement or its terms from being used, offered or received in ewdence in any
proceeding to enfome any or all of the terms herein
ROWSET ' 4 - 1021961021
Section 6.2 Th~s Agreement w~ll neither constitute nor provide to any third party
any remedy, defense, claim, evidence, or other r~ght ~n excess of these existing w~thout
reference to this Agreement
Sectmn 6.3 This Agreement constitutes the entire agreement between the
Parties w~th respect to the matters specifically descnbed herein, and all pnor
agreements, oral or wntten representations, statements, understandings, proposals and
undertakings w~th respect to such matters are superseded and replaced by the
prows~ons of this Agreement
Section 6.4 The persons executing th~s Agreement on behalf of the respective
Parties hereto have been duly and properly authorized to execute the same by the
passage of any necessary motion, resolution or other act
Sectmn 6.5 This Agreement shall be construed ~n accordance w~th the laws of
the State of Texas
~ The nghts, powers, hm~tat~ons, duties, restrictions and releases
hereto provided for shall inure to and be binding upon the Part~es hereto and upon their
respective legal and bona fide representatives, successors and assigns
_ Sectlon~.7 The effecbve date of this Agreement Is the~?~ day of
~,,7~ , ,1996
CITY OF DENTON, TEXAS
ATTEST
h./~L~J_..., By
C~ecl;~t~'J~ City of Denton, Texas
CEy/of Denton, Texas
GTE SOUTHWEST INCORPORATED
ATTEST
By
Hardy E White
Acting Regional President -
Texas/New Mexico
Date
ROWSET ' 5 ' 1021961021