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MINUTES OF THE SPECIAL MEETING OF THE CITY OF PARIS February 21, 1989 r--. The City Council of the City of Paris met in special session, February 21, 1989, 7:00 P. M., Council Chambers, City Hall, Paris, Texas. Mayor Eric S. Clifford called the meeting to order with the following Councilmen present: Curtis Fendley, Travis Wortham, Marshall H. Kent, Jr., E.W. (Bill) Booth, William E. (Bill) Davidson, and Rondie Williams. Also present was City Manager, Michael E. Malone, City Attorney, T. K. Haynes, and City Clerk, Mattie Cunningham. Mayor Clifford announced that the purpose of the special meeting was to have workshop session to discuss franchise taxes and industrial development, and called for discussion. Jim Farris appeared before the Council stating that he and Mr. Marvin Gibbs are with the Industrial Foundation of the Chamber of Commerce, and were here just as observers to observe the discussion, but were naturally interest and concerned with the fact that Paris remain viable and competitive in utility rates and other incentives, and well as labor and other things we have to offer industry. Roy Sparks, District Manager, Lone the Council introducing Quinton Development for Lone Star Gas. Star Gas Company, appeared before Hicks, Director of Industrial Mr. Hicks appeared before the Council discussing the Street and Alley Franchise issues in relation to industrial development. Mr. Hicks pointed out that prior to the early 1980's the competition to attract industry to Texas was pretty even. There were industries that were looking at this part of the country for expansion, and were coming in to Lone Star Gas as industrial allies. Mr. Hicks said there was a change in the early 80.'s as it relates to industrial expansion, actually doing a 180 degree turn and they were looking at a more of a contraction in their industrial base, and competing more just to hold on to the industry that was here. Mr. Hicks said with the declining economy nation wide, and, specifically in reduction in production by industry already in their. service area, a lot of the industry revenue was being reduced naturally by the declining economy. Mr. Hicks said because of the declining in production, we actually experienced an increase supply available for industry, and for new industry coming in, consequentially, the competition to sale gas to the new industry increased, we; therefore, had to change our approach to try and accommodate those industries that were moving in that we wanted to try to get onto our system. The Industry had a natural advantage over us, and that over the 'years had developed a long term supply of gas committed under longterm contracts that had an average cost of $3.50 to $4.50 per 21,000 CF range because of the over supply created through increase expiration production and decrease industrial consumption. We had spot market suppliers of gas that were coming in with gas packages that were extremely low in cost, and actually trying to serve those industries directly instead of coming through our system. This put us in a situation of having to compete just to hold on to the industry