2000-103RESOLUTION NO. 00-103
A RESOLUTION OF THE CITY COUNCIL AUTHORIZING THE
PARTICIPATION OF THE CITY OF SOUTHLAKE, TEXAS IN THE CAUSE
OF ACTION STYLED THE CITY OF DENTON, TEXAS VS. TEXAS
UTILITIES COMPANY AND LONE STAR GAS COMPANY OR SUCH
OTHER CAUSES OF ACTION AS THE "STEERING COMMITTEE OF
CITIES PARTICIPATING IN THE TXU FRANCHISE LITIGATION" MAY
DETERMINE SEEKING DELINQUENT FRANCHISE FEES FROM TXU,
LONE STAR GAS AND OTHER ENTITIES ASSOCIATED WITH TXU;
AUTHORIZING THE EXPENDITURE OF FUNDS FOR ATTORNEY AND
EXPERT WITNESS FEES; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on March 30, 2000 the 269' District Court awarded actual damages to the Cities
of Wharton, Galveston and Pasadena of $3.4 million and on April 4, 2000 punitive damages of $30
million against Houston Lighting & Power Co. (HL&P) for underpaying franchise fees by excluding
revenues from the gross receipts upon which such fees are derived; and
WHEREAS, on December 12, 1999 an audit on behalf of the City of Denton estimated TXU
Electric and Lone Star Gas owed delinquent franchise fees in excess of $1,000,000 based on findings
that revenues similar to those at issue in the HL&P case were excluded from the calculation of gross
receipts/revenues; and
WHEREAS, the law firms of Strasburger & Price, L.L.P. and Bucek & Frank, L.L.P. have
filed suit against TXU and Lone Star Gas on behalf of the City of Denton in the 393" District Court
in Denton County for delinquent franchise fees; and
WHEREAS, a consolidated action by cities in the TXU service area seeking delinquent
franchise fees will reduce duplication of effort and the attendant legal, expert and court cost;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE,THAT:
Section 1. That the City of Southlake agrees to participate with other similarly situated
Texas cities in the TU/LONE STAR GAS system and join the City of Denton in pursuing causes of
action against Texas Utilities Company, Lone Star Gas Company and other entities associated with
TXU to collect delinquent franchise fees.
Section 2. That the City of Southlake agrees to contribute $.50 for each individual residing
within its corporate limits based on the 1990 U.S.. Census (except for such portion of its population
that may not be residing within the TU/Lone Star Gas service area), whichever is more, to underwrite
the cost of legal and expert witness fees and related costs to be expended on behalf of the cities in this
matter, $.25 being due on or before November 13, 2000 and the other $.25, if assessed, being due
and payable on the date the Steering Committee of Cities Participating in the TXU Franchise
Litigation authorizes such assessment.
Section 3. That Billy Campbell, City Manager or his designee shall be the City's primary
contact and liaison in this matter and such individual shall be eligible to serve on "Steering Committee
of Cities participating in the TXU Franchise Litigation" if he is elected by the cities participating inthislitigation. Notices to the City should be addressed as follows:
Billy Campbell, City Manager
City of Southlake
1725 E. Southlake Blvd.
Southlake, Texas 76092
Telephone: 817-481-5581 ext. 701
Fax: 817-329-1747
E-mail: bcampbell@cityofsouthlake.com
Section 4. That the liaison named above is authorized to take those steps reasonable and
necessary to comply with the intent of this resolution.
Section 5. That this resolution shall take effect immediately from and after its passage.
PASSED AND APPROVED THIS THE 7 DAY OF , 2000.
ATTEST:'
of
Sandra L. LeGrand, City Secretary
APPROVED AS TO FORM:
CITY ATTORNEY
By:
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