2000-140-RES AUTHORIZING THE PARTICIPATION OF THE CITY OF
RESOLUTION NO. 2000- 140
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, AUTHORIZING THE P ARTICIP A TION OF THE CITY OF
PARIS, PARIS, TEXAS, IN THA T 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 LmGA TION" 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 269th District Court awarded actual damages to the
Cities of Wharton, Galveston, and Pasadena of$4.2 million and on April 4, 2000, punitive damages
of $30 million against Houston Lighting & Power Co. (HL&P) for underpaying franchise fees by
excluding revenues from the gross receipts upon which such fees are derived; and,
WHEREAS, on December 12,1999, an audit on behalf of the City of Denton estimated
TXU Electric and Lone Star Gas owed delinquent franchise fees in excess of$I,OOO,OOO 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 ofthe City of Denton in the 393rd 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 costs; NOW,
THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. That the City of Paris, Paris, Texas, agrees to participate with other similarly
situated Texas cities in the TUlLone 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 3. That the City of Paris, Paris, Texas, agrees to contribute $1.00 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 TUlLone Star Gas service area), to underwrite the cost
oflegal and expert witness fees and related costs to be expended on behalf of the cities in this matter,
$.50 being due on or before October 31,2000, and the other $.50, if assessed, being due and payable
on the date the Steering Committee of Cities Participating in the TXU Franchise Litigation authorizes
such assessment.
Section 4. That Larry W. Schenk, City Attorney, or his designee, shall be the City's primary
contact and liaison in this matter and such individual shall be eligible to serve on the "Steering
Committee of Cities Participating in the TXU Franchise Litigation" if he/she is elected by the cities
participating in this litigation. Notices to the City should be addressed as follows:
Larry W. Schenk, City Attorney
City of Paris
P. O. Box 9037
Paris, Texas 75461-9037
(903) 785-7511 Ext. 255 FAX (903) 782-9721
Section 5. That the liaison named above is authorized to take those steps reasonable and
necessary to comply with the intent of this resolution.
Section 6. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 9th day of October, 2000.
~J.~a~C6
Michael J. Pfiest , a r
ATTEST:
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Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
S ep anie H. Harris, Asst. City Attorney