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HomeMy WebLinkAbout01-1100 05-22-2001RESOLUTION NO. 01 -1100 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EULESS, TEXAS, HEREINAFTER REFERRED TO AS "CITY ", AUTHORIZING THE ASSURANCES AND AGREEMENT LETTER BY TXU GAS AND ELECTRIC THAT WILL INCLUDE ADDITIONAL CATEGORIES OF REVENUE TO THE CITY OF EULESS IF A FINAL JUDGMENT OR SETTLEMENT IS REACHED IN THE CITY OF DENTON V. TXU GAS AND ELECTRIC LAWSUIT, WHICH ASSURANCE AND AGREEMENT LETTER IS CONTINGENT UPON THE CITY OF EULESS AGREEING NOT TO PARTICIPATE AS A PARTY IN THE ABOVE MENTIONED LAWSUIT. WHEREAS, the City of Denton has filed a lawsuit against TXU Gas and Electric asserting that various categories of revenue should have been included in the revenue on which franchise fees are calculated; WHEREAS, the City of Denton and its legal consultant have solicited several Cities serviced, including the City of Euless, by TXU Gas and Electric to participate in the lawsuit; WHEREAS, the CITY received an assurances and agreement letter from TXU Gas and Electric providing additional categories of revenue to the CITY if a final judgment or settlement is reached in the Denton v. TXU Electric and Gas lawsuit; WHEREAS, the TXU Gas and Electric letter of assurance and agreement is contingent upon the CITY not participating in the Denton v. TXU Gas and Electric lawsuit; THEREFORE, BE IT RESOVED BY THE CITY COUNCIL OF THE CITY OF EULESS: Section 1: That the execution of the assurances and agreement letter by TXU Gas and Electric, copy attached labeled "Exhibit A" be authorized for execution by the City Manager. Section 2: That a copy of this resolution be sent to the local representative of TXU Gas and Electric. PRESENTED AND APPROVED on this the 22nd day of May, 2001 by a vote of 5 ayes, 0 nays, and 0 abstentions at a regular meeting of the City Council of the City of Euless, Texas. ATTEST: 0 Susan Crim, C, Ci Secretary APPROVED: Mary Lib Saleh, Mayor VI TXU Aor TXU Electric & Gas H. Dan Farell 1601 Bryan Street President Dallas, TX 75201 -3411 Distribution Tel: 214 812 4736 Fax: 214 812 4758 dfarell @txu.com Mr. Joe Hennig City Manager City of Euless Euless, Texas April 19, 2001 Re: City of Denton, et al v. TXU Electric Company, et al Dear Mr. Hennig: As you are aware, the City of Denton and other cities have filed a lawsuit (City of Denton, Texas, et al. v. TXU Electric Company et al., No. 009383, 134th Judicial District Court, Dallas County, Texas) against TXU Electric (formerly Texas Utilities Electric Company) and TXU Gas (formerly Lone Star Gas Company) asserting that various categories of revenue should have been included in the revenue for which franchise fee payments are calculated. Because we at TXU Electric and TXU Gas strongly believe we have properly calculated the franchise fee payments made to Denton and other cities in the referenced lawsuit, as well as all of the other cities in our service areas, we will vigorously defend the referenced lawsuit. We are aware that your City has been solicited to join this litigation against TXU Electric and TXU Gas. We at TXU Electric and TXU Gas do not believe that you need to be a party to the lawsuit with regard to this issue. It is the position of TXU Electric and TXU Gas that, if there is a fmal judgment holding that additional categories of revenue should have been included in the calculation of franchise fees at issue in this lawsuit or a settlement in which TXU Electric and TXU Gas agree to include additional categories of revenue, TXU Electric and TXU Gas will, if agreed to by your City, apply the same standard established in the referenced lawsuit for the same period of time to the calculation of franchise fee payments to your City, and provide the same benefits to your City that it would have received if it had intervened in the referenced litigation. Further, TXU Electric and TXU Gas agree to disclose to your City the terms and conditions of any settlement agreement reached in this litigation. In the event that a settlement is reached whereby TXU Electric and TXU Gas agree to pay a lump sum to the City of Denton and/or other cities that are parties to this litigation, specifically excepting any payment made in connection with a transfer of assets, then TXU Electric and TXU Gas agree to pay your City a sum equal to the lump sum paid to the settling cities divided by the combined 1990 populations of the settling cities multiplied by the 1990 population of your City. If the settlement or judgment requires TXU to make adjustments to rates of the parties to the litigation for base year 1998, TXU will make an adjustment on the same basis to your City's base year 1998 rate. In addition, TXU Electric and TXU Gas will provide other supporting documentation to your City to substantiate the calculation of its payment to your City based upon any fmal judgment or settlement. All payments due to your City will be made within thirty (30) days of the date of fmal judgment or settlement. In the event that your City and TXU Electric and TXU Gas are unable to agree on the calculation of payment to your City under this agreement, your City may request that an audit be conducted by an independent third party auditor chosen by your City. One -half of the cost of this audit will be paid by TXU Electric and TXU Gas and one -half of the cost will be paid by your City. The required payments as calculated by the auditor will be paid within thirty (30) days of completion of the audit. These assurances and agreement are given in consideration of your City's agreement not to participate as a party in this or any other litigation against TXU Electric and/or TXU Gas related to the calculation and payment of past franchise fees, provided, however, that this limitation on participation in other litigation does not apply to claims (a) that arise after the date of this letter, and (b) that are not related to the claims, allegations and/or assertions in the referenced lawsuit. The undersigned has the corporate authority to bind TXU Electric and TXU Gas to the agreements contained herein. If this letter accurately sets forth our agreement, please sign in the place provided below. We further understand that the City will take all action necessary to effect this agreement. Sincer:ly, /i 0-1 dos Farell President, Distribution TXU Electric & Gas APPROVED AND AGREED: City of Euless, Texas Date: