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Res 057-2001 5/15/2001RESOLUTION NO. S9 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT WITH TXU GAS AND ELECTRIC COMPANY REGARDING THE CITY'S PARTICIPATION IN PENDING LITIGATION STYLED CITY OF DENTON, TEXAS, ET AL, V. TXU ELECTRIC COMPANY, ET AL, CAUSE NO. 009383; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW. WHEREAS, the City of Denton, Texas, has filed a lawsuit styled City of Denton, Texas, et al, v. TXU Electric Company, et al, Cause No. 009383, 134th Judicial District, Dallas County, Texas, against TXU Electric and TXU Gas, asserting that various categories of revenue should have been included in the revenue for which franchise fee payments are calculated; and WHEREAS, it is the desire of the City of Wichita Falls not to participate directly in such litigation; and WHEREAS, the City of Wichita Falls should be appropriately compensated in the event the plaintiff cities are successful in this litigation. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: SECTION 1. The City Manager is authorized to execute the agreement, attached hereto as Exhibit A, to protect the City of Wichita Falls' interests in this matter. SECTION 2. It is hereby officially found and determined that the meeting at which this resolution was passed was open to the public as required by law. PASSED AND APPROVED this the 15th day of May 2001. ATTEST: City Clerk AYOR D R A F T: FOR DISCUSSION PURPOSES ONLY DATE Mayor /City Manager _, Texas Re: City of Denton v. TXU Gas Company and TXU Electric Company Dear EXHIBIT A 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 final 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 or any other benefit calculable in dollars 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 or any other benefit calculable in dollars paid to the settling cities divided by the combined 1990 populations, determined by the U.S. Census, 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 final judgment or settlement. All payments due to your City will be made within thirty (30) days of the date of final 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. TXU Electric and TXU Gas will make available documents deemed necessary by the auditing firm to perform the audit. The D R A F T: FOR DISCUSSION PURPOSES ONLY 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. APPROVED AND AGREED: City of , Texas By: Date: Authorized Official Sincerely, TXU Authorized Official