Ord. 0955 02-28-00ORDINANCE NO. 955
AN ORDINANCE GRANTING A PERMIT AND CONSENT TO PG&E
GAS TRANSMISSION, TEXAS CORPORATION, PG&E GAS
TRANSMISSION TECO, INC., AND PG&E ENERGY TRADING -GAS
CORPORATION, THEIR WHOLLY OWNED SUBSIDIARY
CORPORATIONS AND WHOLLY OWNED SUBSIDIARY GENERAL
AND LIMITED PARTNERSHIPS, AND THEIR SUCCESSORS,
LESSEES OR ASSIGNS, TO MAINTAIN, USE AND OPERATE
CERTAIN NATURAL GAS AND/OR NATURAL GAS LIQUIDS
TRANSMISSION PIPELINES ALONG, ACROSS, AND UNDER
PUBLIC PROPERTY AND RIGHTS OF WAY IN THE CITY
PEARLAND , TEXAS
*
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CITY PEARLAND
, TEXAS:
Section 1. Permit and consent granted; consideration.
That the City of CITY PEARLAND , Texas ("the City"), for and in
consideration of the payment of the Agreed Settlement Sum, which includes
a one-time, lump sum payment equal to (a) an annual payment of two
thousand dollars ($2,000.00), for each year of the Term hereof, reduced to
present value using a 6% per year discount rate, and (b) an annual payment
of fifteen cents ($.15) for each linear foot of pipe constituting part of "the
PG&E Pipeline System" (as defined herein) that is presently located within
City Rights of Way (as defined herein, but excluding for purposes of this
payment calculation only any in -City portion of the designated state highway
system), to be calculated for each year of the Term (as defined herein) and
reduced to present value using a 6% per year discount rate, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and subject to the terms and conditions of the Full and Final
Release and Settlement Agreement executed and approved by the City
contemporaneously herewith and the terms, conditions and definitions set
forth herein, hereby grants to Grantee (as defined herein) a permit and
consent for the Term (as defined herein) to operate, use and maintain the
PG&E Pipeline System and to exercise the rights and privileges granted by
this Ordinance.
Section 2. Definitions.
(a) For purposes of this Ordinance, "the PG&E Pipeline System"
shall mean the intrastate, interurban natural gas and natural gas
liquids transmission pipelines and all their appurtenant facilities,
including, but not limited to, mains, spurs, laterals, meters, valves,
corrosion protection systems, city gates, and all other similar
facilities of Grantee, located in, under or along City Rights of Way.
The PG&E Pipeline System includes all pipelines and facilities
owned, leased, operated and/or controlled, in whole or in part (such
as through a joint venture or partnership, for example), by Grantee.
The PG&E Pipeline System has been disclosed to the City and/or
its counsel by maps, written descriptions or by other identification.
The PG&E Pipeline System is not a "local gas distribution system"
or "LDC" (as defined herein). The consent, permit, rights and
privileges granted by this Ordinance encompass the PG&E Pipeline
System and the operations, lines of business, and business
activities of Grantee in the City; such grants however do not allow
the PG&E Pipeline System or any portion thereof hereafter to be
operated, used or maintained as an LDC.
(b) In this Ordinance, "City Rights of Way" shall mean any public
easement, street, road, avenue, highway, freeway, toll road,
bridge, alley, boulevard, sidewalk, park, parkway, lane, drive, circle,
canal, sanitary or storm sewer runoff, drainage ditch, dump, landfill
or other public property, thoroughfare, way, or place currently
owned or controlled by, and/or located within or which may in the
future be constructed within or annexed into the corporate limits of,
the City, including all in -City portions of any federal or state
highway, farm to market road, or other right of way designated as
part of the Texas state highway system by the Texas Department of
Transportation, Texas Transportation Commission, State Highway
Commission, and/or any predecessor or successor thereof.
(c) In this Ordinance, "Grantee" shall mean and shall be understood
to be PG&E Gas Transmission, Texas Corporation, PG&E Gas
Transmission Teco, Inc., and PG&E Energy Trading -Gas
Corporation, their wholly owned subsidiary corporations and wholly
owned subsidiary general and limited partnerships, and their
successors, lessees or assigns.
(d) In this Ordinance, "Agreed Settlement Sum" shall mean and be
understood to be Grantee's one time, lump sum payment of money
and all other things of value given to and accepted by the City as
consideration for the Full and Final Release and Settlement
Agreement executed and approved by the City contemporaneously
FINAL ORDINANCE 01/27/00
herewith and the rights, permit, and consent granted by this
Ordinance for the Term.
(e) In this Ordinance, "Local Distribution Company" or "LDC" shall
mean a person, corporation, general or limited partnership, or other
entity that owns one or more lines of pipe within a city service area
and holds itself out to both residential and commercial customers
generally within such city service area to provide public utility
service through such line or lines of pipe for a fee.
Section 3. Maintenance, Operation, Repair, Relocation, Expansion
or Removal of PG&E Pipeline System.
The consent and permit granted herein includes, without limitation;
all rights and privileges to own, maintain, operate, improve, enlarge,
extend, repair, remove, and relocate any part of the PG&E Pipeline
System as may be deemed necessary by Grantee. In the event that
Grantee finds it necessary to excavate in any City Rights of Way, Grantee
shall notify the City and shall comply with all then existing City and/or
other governmental requirements, if any, concerning such excavation and
work performed, subject to the provisions of this Ordinance and to the
extent that such requirements are applicable to other pipelines and
facilities similarly situated. Grantee shall comply with ordinances of
general application.
Section 4. New Construction.
(a) General. Subject to the provisions of Section 2(a) above (and as
limited by Section 4(b) below), should Grantee, during the Term of
this Ordinance, desire to construct or install new pipelines or add
new facilities in City Rights Of Way, Grantee shall notify the City
and comply with existing City and/or other governmental
requirements, if any, concerning such construction to the extent
applicable to other pipelines and facilities similarly situated, except
that no additional payment, other than what is expressly set forth
herein, shall be made during the Term and thereafter such new
pipelines or facilities shall be made subject to the provisions of
Sections 6 and 9. In the event any new pipeline construction or
expansion of an existing pipeline causes a cumulative increase of
more than 300 linear feet of pipe along or under City Rights of Way,
then in such event Grantee shall make an additional lump sum
payment to the City equal to 15 cents per linear foot of such new
pipeline within City Rights of Way (excluding for purposes of this
payment calculation only any in -City portion of the designated state
highway system), multiplied by the number of years remaining on
the Term, reduced to present value using a 6% discount rate. After
completion of construction and compliance with existing City and/or
other governmental requirements, if any, the new pipeline and/or
new facilities shall become a part of the PG&E Pipeline System as
defined herein and covered by this Ordinance. For the purpose of
calculating any lump sum payment obligation, the terms "new
pipeline" and "new facilities" do not include any upgrades,
replacements, changes in diameter, size or configuration, of any
part of the existing PG&E Pipeline System. Further, any relocation
of the existing PG&E Pipeline System due to any change in
location, expansion or widening of the paved road surface portion
of any City Rights of Way shall not be considered to be a "new
pipeline" or "new facility" for the purpose of calculating any lump
sum payment obligation. Nothing in this Ordinance shall effect the
rights, if any, of the City to receive any monies from the Texas
Department of Transportation that may, in the future, be collected
by or through the Texas Department of Transportation from any
user of the Texas state highway system.
(b) Limitations on Future Expansion. Although this Ordinance
grants consent to expand the PG&E Pipeline System, by the
construction or installation of new pipelines or new facilities, such
consent shall be limited by this Section as follows:
(i)
During the Term, if and only in the event any
construction involving new pipelines or new
facilities is proposed in any City Rights of Way
open to the public but not located along or
under a road or other City Right of Way subject
to vehicular traffic — such as an airport, public
park, municipal building site, or landfill site —
the Grantee entity(ies) that owns and/or
operates the in -City portion of the PG&E
Pipeline System ("Pipeline Owner") will file an
application for consent to construct new
pipelines or new facilities. In addition, in no
event shall the City seek or impose any terms,
conditions or consideration in granting the
application that are greater or more onerous
than those being imposed or received by the
City upon or from any other person or entities
that are similarly situated to or compete with
Pipeline Owner. The City agrees to act on
such application in a timely fashion, not to
exceed 60 days; and/or
(ii) During the Term, if and only in the event that
the Pipeline Owner desires to construct or
install new pipelines or add new facilities in a
manner that would cause the PG&E Pipeline
System to cross under or along any additional
FINAL ORDINANCE 01/27/00
City Rights of Way, for the purpose of
delivering gas directly (it being agreed that
direct deliveries of gas shall not include a sale
for resale nor a delivery of gas to the LDC or
any other third party transporter) to any retail
gas consumer not served by the Pipeline
Owner as of the effective date of this
Ordinance and located inside the City, the
Pipeline Owner agrees to provide notice to the
City. To the extent required by this Section
4(b)(ii), Pipeline Owner will file an application
for consent to construct new pipelines or new
facilities, such consent not to be unreasonably
withheld by the City. In addition, in no event
shall the City seek or impose any terms,
conditions or consideration in granting the
application that are greater or more onerous
than those being imposed or received by the
City upon or from any other person or entity
that is similarly situated to or compete with
Pipeline Owner. The City agrees to act on
such application in a timely fashion, not to
exceed 60 days. Notwithstanding anything to
the contrary, this Section 4(b)(ii) shall not apply
to the construction or installation of new
pipelines or addition of new facilities to deliver
gas to existing or new electric power
generating plants.
Section 5. Substances.
Subject to the terms and conditions of this Ordinance: (a) the
following substances may be transported and/or delivered for purposes of
sale, sale for resale, transportation or purchase in any part of the PG&E
Pipeline System by Grantee: natural gas or natural gas liquids, in gaseous
or liquid state or the equivalent thereof, whether natural or synthetic
("Substances"); and (b) Grantee may transport and deliver its own
Substances, and transport and/or deliver for hire Substances owned by
affiliates, governmental entities and/or third parties.
Section 6. Nature And Sufficiency of Consideration.
(a) Findings. The monies paid to the City and the agreements set
forth in Section 4 are sufficient consideration for all purposes
(b) Exclusive Charge. The consideration described in Sections 1 and
4 shall be the exclusive compensation, tax (except as provided in
Subsection (c) below), fee, rental, assessment or other charge,
however characterized, payable or due to the City by Grantee
pertaining to the presence, use, ownership, and/or operation of the
PG&E Pipeline System, and the natural gas or natural gas liquid
sales, purchases, transportation and other business activities
related thereto, during the Term of this Ordinance. Grantee's
agreement to pay such consideration shall be full consideration
during the Term for the City's consent and permit for the rights and
privileges granted by this Ordinance and shall be in lieu of all other
franchise, license, regulatory, use, sales, gross receipts, or
occupation taxes, fees, assessments, exactions, rentals or charges
which may levied or attempted to be levied by the City.
(c) Certain Taxes Not Exempt. Nothing herein shall constitute an
exemption to Grantee from (i) ad valorem taxes levied by the City
on real or personal property owned by the Grantee within the City,
or (ii) any new tax (including any new increment to an existing tax)
first authorized, mandated or imposed by the state or federal
government after the effective date of this Ordinance if such new
tax or new increment is equally applied to all persons and entities
within the City that are similarly situated to or compete with
Grantee.
Section 7. Term.
The consent and permit granted by this Ordinance shall continue
and remain in full force and effect for a period of twenty-five (25) years
from and after its effective date pursuant to Section 15 ("the Term").
Section 8. Expiration of Term; Renewal.
If Grantee desires a renewal of this consent and permit, it shall
notify the City at least two (2) years prior to the expiration date of the
Term. The City shall not be compelled to renew but shall not
unreasonably withhold or refuse renewal of this consent and permit. The
City shall not require more onerous terms or conditions nor require greater
consideration from Grantee for renewal than those then in effect for other
persons and entities that are similarly situated to or compete with Grantee
and are using or occupying City Rights of Way. If the City, acting in good
faith and with a reasonable basis decides not to renew this consent and
permit, the City shall give Grantee formal written notice of such decision
not later than 18 months before the expiration of the Term. After receipt of
such notice, Grantee shall have until the end of the Term to find a buyer or
buyers to acquire all or any divisible parts of the PG&E Pipeline System.
For any part of the PG&E Pipeline System Grantee is unable to sell or
convey after expiration of the Term, Grantee shall have a reasonable time
after the expiration of such Term to remove from City Rights of Way those
parts, and shall restore affected City Rights of Way to the condition
existing before such removal.
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Section 9. Existing Obligations Affecting The PG&E Pipeline System.
(a) As of the effective date of this Ordinance, there may be existing
contracts, ordinances, easements, leases, agreements or permits
imposing obligations and/or City requirements pertaining to the
PG&E Pipeline System or Grantee ("Existing Pipeline Facility
Obligations"). It is the intent of City and Grantee that any such
payment obligation shall be subsumed into Section 6(b) hereof and
that this Ordinance shall control and supercede any such Existing
Pipeline Facility Obligations to the extent they conflict or vary in any
manner from this Ordinance.
(b) Grantee and City further agree and declare that:
(i)
the consideration paid under this Ordinance satisfies
in full any fee, charge or payment obligation that
otherwise would be due under Existing Pipeline
Facility Obligations after the effective date of this
Ordinance;
(ii) the term, if any, for any such Existing Pipeline Facility
Obligations is hereby extended to coincide with the Term of
this Ordinance; and
(iii) Grantee and City shall execute such further documents as
necessary to conform Existing Pipeline Facility Obligations to
this Ordinance.
Section 10. Notice.
(a) Written Notice. All notices required or sent in accordance with this
Ordinance shall be in writing.
(b) Addresses. All notices shall be addressed to the other party at
the address below or at such other address as the receiving party
may subsequently designate by notice to the sending party
(i) Notice to the City shall be sent to:
[Address of Director of Public Works,
Mayor, or other appropriate official]
(ii) Notice to Grantee shall be sent to:
PG&E Gas Transmission, Texas Corporation and
PG&E Gas Transmission Teco, Inc.
1100 Louisiana, Suite 1000
Houston, Texas 77002
Attn: General Counsel
Section 11. Satisfaction of Consent and Permit Requirements
City acknowledges and agrees that Grantee has satisfied and fully
paid all of Grantee's obligations, duties, responsibilities, fees and charges,
and liability, if any, including but not limited to any derivative liability, with
regard to all past and present statutory and regulatory consent
requirements pertaining to use or occupation of any City Rights of Way
under any state or municipal law or regulation applicable to Grantee,
including, by way of example and not limitation, Texas Revised Civil
Statutes art. 1175, Texas Local Government Code § 282.003, Texas
Transportation Code § 311.071, Texas Utilities Code §§ 181.006, 181.023
and 181.026, the City Charter and Code of Ordinances, if any, and/or any
City ordinance, resolution, permit or consent requirement, if any,
pertaining or applicable to the PG&E Pipeline System or Grantee.
Section 12. Severability.
It is hereby declared to be the intention of the parties that the
phrases, clauses, sentences, paragraphs, and Sections of this Ordinance
are severable, and, if any phrase, clause, sentence, paragraph, or Section
of this Ordinance shall be declared void, ineffective, or unconstitutional by
the valid judgment or final decree of a court of competent jurisdiction or a
final order, rule or regulation of a governmental regulatory authority, such
voidness, ineffectiveness, or unconstitutionality shall not affect any of the
remaining phrases, clauses, sentences, paragraphs, and sections of this
Ordinance since the same would have been enacted by the City without
the incorporation herein of any such void, ineffective, or unconstitutional
phrase, clause, sentence, paragraph, or section.
Section 13. Transfer or Assignment.
Grantee is expressly given the right, power and privilege to sell,
convey, transfer, lease, or assign, to any person or entity, Grantee's rights
under this consent and permit, and to sell, convey, transfer, lease, or
assign all or any portion of the PG&E Pipeline System. Grantee agrees to
give written notice to the City, within a reasonable time afterward, of any
such conveyance, sale, transfer, lease, or assignment, but failure to
provide such notice shall not constitute a forfeiture of any of Grantee's
rights under the terms and conditions of the Ordinance. The consent,
permit, rights and privileges granted by this Ordinance encompass the
PG&E Pipeline System and the operations, lines of business, and
business activities of Grantee in the City; but such grants do not allow the
PG&E Pipeline System or any portion thereof hereafter to be operated,
used or maintained as an LDC (as such term is defined above).
Therefore, absent separate and express City consent and agreement, no
such conveyance, sale, transfer, lease, or assignment by Grantee, as
authorized herein, shall constitute or convey to any buyer, transferee,
FINAL ORDINANCE 01/27/00
lessee, or assignee the right, power or privilege to operate as an LDC
within the City.
Section 14. Indemnity.
Except as expressly provided for below, this Ordinance does not
address or concern, and shall not be construed to have any application to,
any future occurrence involving leakage, rupture, fire or explosion
involving any in -City portion of the PG&E Pipeline System which causes or
is alleged to cause any personal injury or property damage. If and only in
the event the City is sued as a result of any such occurrence during the
Term, and subject to the language and conditions hereof, the Pipeline
Owner agrees to indemnify and hold harmless the City from any adjudged
liability and damages caused by any negligent or wrongful act or omission
of Pipeline Owner relating to the construction, maintenance, operation, or
repair of the PG&E Pipeline System; provided, however, the City shall
promptly notify Pipeline Owner in writing of such claim or lawsuit. In the
event that City desires to settle any such claim or suit relating to any
matter for which indemnification is or will be sought by City hereunder,
prior to final judgment by the court, then this indemnity shall be without
legal effect, unless the City obtains Pipeline Owner's written consent to
such settlement. Pipeline Owner shall have the right but not the
obligation, to assume the defense of any claim made against the City
relating to any matter for which indemnification is or will be sought
hereunder. Pipeline Owner agrees to bear the costs of defense in
circumstances in which Pipeline Owner assumes the defense.
Section 15. Effective Date and Controlling Effect of this Ordinance.
This Ordinance shall become effective upon the last in time of its
adoption by the City in the form accepted by the Grantee and the payment
in full to the City of the Agreed Settlement Sum. Upon such effective date,
this Ordinance shall constitute a contract between the City and Grantee
and shall govern the rights and relationships between the City and
Grantee for the duration of the Term, and it shall supersede and take
precedence over inconsistent ordinances, resolutions, or regulations
hereafter or heretofore passed by the City.
READ, CONSIDERED, PASSED and APPROVED at a Regular Meeting of
the City Council, on the turn day of=February , 2000 , held in accordance
with the Open Meetings Act, Texas Gov't Code §551.001 et seq., at which a quorum
was present.
APPROVED by the Mayor of the City of CITY PEARLAND , Texas, on this
the 28 day of February , 2000.
ATTEST:
CITY OF CITY PEARLAND
By: n/071
Mayor
APPROVED AS TO'FORM:
City Attorney
STATE OF TEXAS
COUNTY OF Brazoria
I, the undersigned City Secretary of the City of CITY PEARLAND , Texas, hereby
certify that the above and foregoing is a full, true and correct copy of an ordinance adopted
by the governing body of the City at the meeting held on the 28th day of February ,
2000, as the same appears in the official minutes of the City Council meeting.
WITNESS MY HAND AND SEAL of he City of CITY PEARLAJ, Texas, this 3rd
day of March , 2000.
Secre
of CI PEARLAN '', Te as
FULL AND FINAL RELEASE AND SETTLEMENT AGREEMENT
This Full and Final Release and Settlement Agreement is made and entered into as
of the day of , 2000, by and between the Cities of San Benito, Primera, and
Port Isabel, individually and as Class Plaintiffs for the Settling Class Cities (as hereinafter
defined); and (i) PG&E Gas Transmission, Texas Corporation f/k/a Valero Energy
Corporation; (ii) PG&E Texas Natural Gas Company flk/a Valero Natural Gas
Company; (iii) PG&E Texas Pipeline Company f/k/a Valero Transmission Company;
(iv) PG&E Texas Pipeline, L.P. f/k/a Valero Transmission, L.P.; (v) VT Company flk/a
Lo Vaca Gathering Company; (vi) PG&E Texas Field Services Company f/k/a Valero
Field Services Company; (vii) PG&E Texas Gas Storage Company f/k/a Valero Gas
Storage Company; (viii) PG&E Hydrocarbons Company f/kla Valero Hydrocarbons
Company; (ix) PG&E Hydrocarbons, L.P. f/k/a Valero Hydrocarbons, L.P.; (x) PG&E
Texas Hub Services Company f/k/a Valero Storage and Transfer Company; (xi) PG&E
Texas Management Company flk/a Valero Management Company; (xii) PG&E Texas
Gas Partners, L.P. f/k/a Valero Natural Gas Partners, L.P.; (xiii) PG&E Texas
Management Partnership, L.P. f/k/a Valero Management Partnership, L.P.; (xiv)
PG&E -Tex, L.P. flk/a Valerotex, L.P.; (xv) PG&E Texas Energy Company; (xvi) PG&E
Reata Energy, L.P. f/k/a Reata Industrial Gas, L.P.; (xvii) PG&E Energy Trading
Holdings Corporation f/k/a Valero Gas Marketing Company f/k/a Reata Industrial Gas
Company; (xviii) PG&E NGL Marketing, L.P. f/k/a Valero Marketing, L.P.; (xix) PG&E
Texas LDC, L.P. f/k/a VLDC, L.P.; (xx) PG&E Rivercity Energy, L.P. f/k/a Rivercity
Gas, L.P.; (xxi) PG&E Texas VGM, L.P. f/k/a Valero Gas Marketing, L.P.; (xxii) PG&E
Texas Industrial Energy, L.P. f/k/a Valero Industrial Gas, L.P.; (xxiii) PG&E West
Texas Pipeline Company f/kla Valero-Teco West Texas Pipeline Company; (xxiv)
PG&E Gas Transmission Teco, Inc. f/k/a PG&E Gas Transmission, Texas Corporation
and Teco Pipeline Company; (xxv) Teco Gas Gathering Company; (xxvi) Teco
Industrial Gas Company; (xxvii) Teco Gas Marketing Company; (xxviii) Teco Gas
Processing Company; (xxix) Teco Gas Services Company, and (xxx) PG&E Energy
Trading - Gas Corporation f/k/a PG&E Energy Trading Corporation, and the directors,
officers, general and limited partners, joint ventures, employees, and representatives of
said entities (collectively referred to hereinafter as "PG&E/TECO" or "the Settling
Defendants").
WHEREAS, the Cities of San Benito, Primera and Port Isabel initiated litigation as
individual litigants on or about December 27, 1996, and were named as Class
Representatives for a class of Texas cities certified by Court order on November 5, 1997,
as amended and corrected by Court order of November 12, 1997, such litigation styled
Cause No. 96-12-7404-A; City of San Benito, et al. v. PG&E Gas Transmission, Texas
Corporation, et al.; In the 107th Judicial District Court, Cameron County, Texas ("litigation");
and
WHEREAS, PG&E/TECO has vigorously defended the litigation and deny and
continues to deny the allegations, claims and damages asserted by the Class Plaintiffs; and
WHEREAS, the Class Plaintiffs and PG&E/TECO wish to fully and finally settle the
litigation and all claims and damages as herein provided; and
WHEREAS, without admission of liability by or to any party, the Class Plaintiffs and
PG&E/TECO desire to avoid the vexation and uncertainties of litigation and fully and finally
Final Release & Settlement Agreement
January 27, 2000 (5:55pm) - 2 -
resolve the litigation, ancillary litigation, avoid further litigation, settle all claims and buy
peace;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual promises and
agreements herein contained, including the foregoing recitals which form an integral part
of this Release and Settlement Agreement, and in consideration of the Agreed Settlement
Sum and the Ordinance Granting a Permit And Consent enacted by each of the Settling
Class Cities, and other good and valuable consideration, and in order to buy their
respective peace, the receipt and independent adequacy of all elements of such
consideration being acknowledged by the parties hereto, the parties hereby contract,
covenant and agree as follows:
1. DEFINITIONS. The following terms are defined as follows when used within this
Agreement:
a. "RELEASE AND SETTLEMENT AGREEMENT" shall mean this Full and
Final Release and Settlement Agreement and all referenced Exhibits hereto.
b. "CLASS CITIES" shall mean those cities that were given notice of this class
action after it was certified, have not opted out or have rescinded their
original opt out, and have not been severed, dismissed, nonsuited, or
otherwise removed from the class by court order.
c. "SETTLING CLASS CITIES" shall mean those Class Cities that have been
given notice of the settlement, have agreed to the terms, conditions and
consideration supporting the settlement, have agreed to accept the benefits
hereof, and have agreed to be bound by the Agreement.
d. "SETTLING DEFENDANTS" or "PG&E/TECO" shall mean all the parties
named as Defendants in the litigation, and the directors, officers, general and
limited partners, joint ventures, employees, and representatives of said
entities.
Final Release & Settlement Agreement 3
January 27, 2000 (5:55pm)
e. PIPELINE(S) shall mean the intrastate, interurban PG&E/TECO natural gas
and natural gas liquids transmission pipelines and all their appurtenant
facilities, including, but not limited to, mains, spurs, laterals, meters, valves,
corrosion protection systems, city gates, and other related facilities of
PG&E/TECO owned, leased, operated and/or controlled, in whole or in part
(such as through a joint venture or partnership, for example), by
PG&E/TECO. The location of the Pipelines within the respective city limits
of the Settling Class Cities have been disclosed to the Settling Class Cities
directly and/or through Class Counsel, to the extent known, by maps, written
descriptions or other identification as may be required by the City.
2. AGREED SETTLEMENT SUM. PG&E/TECO agrees to pay by check, payable to
"the Law Offices of Ramon Garcia, P.C., Class Counsel," the total sum of twelve
million two hundred thousand dollars ($12,200,000.00), which is the full and
complete amount that the Settling Defendants will pay pursuant to the Release and
Settlement Agreement as the Agreed Settlement Sum. The check will be delivered
to the Settling Class Cities through Class Counsel on or before five business days
after final approval by the Court of this Release and Settlement Agreement.
3. CONSENT AND PERMIT ORDINANCE . The Settling Class Cities agree to
consent, permit, authorize, and approve the past, current and continued presence,
use, maintenance, expansion, and operation of PG&E/TECO's Pipelines, as granted
and expressed by the ordinance which each Settling Class City has or will enact and
adopt, for a term of twenty-five years, in the same or substantially similar form to
Exhibit "A" attached hereto.
4. COURT COSTS. All costs of court in the litigation and ancillary litigation shall be
paid by the party incurring such costs.
5. DISMISSAL WITH PREJUDICE OF CLAIMS. The Settling Class Cities shall
dismiss with prejudice all claims in this litigation and all claims against the Settling
Defendants in the ancillary lawsuits, as identified in Exhibit "B" attached hereto and
incorporated by reference herein, following the approval by the Court of the Release
and Settlement Agreement and receipt of the Agreed Settlement Sum in full as
provided in Section 2 above.
6. RELEASE
a. Scope. It is the Settling Class Cities' intent to release all causes of action
of whatsoever nature, or any other legal theory arising out of the
circumstances described above, against PG&E/TECO, and to release
PG&E/TECO from any and all liability and damages of any kind, known or
unknown, whether based on statute, ordinance, contractor tort. The release
Final Release & Settlement Agreement -4
January 27, 2000 (5:55pm)
given herein is intended by the Settling Class Cities hereto to constitute a
complete, comprehensive and final release and shall be construed
accordingly in its broadest sense as to PG&E/TECO; however, the Settling
Class Cities do not by this Release and Settlement Agreement release any
claims that any Settling Class City may possess or assert regarding franchise
fee payments against any of the following entities: the local distribution
company now known as Southern Union Gas Company, a division of
Southern Union Company; Southern Union Company; the former Rio Grande
Valley Gas Company, a Delaware corporation, now known as Southern
Union Company; Mercado Gas Services, Inc.; and Entex, a division of
NORAM Energy Corp.; or any of said entities' successors or assigns.
Further, the Settling class Cities do not by this agreement release any claims,
if any, asserted by any such Settling Class City, either as a class
representative or class member, against any person or entity other than the
Settling Defendants named herein, in the case styled City of Pearland on
Behalf of Itself and All Other Similarly Situated Cities v. Entex, Inc. et al.,
Cause No. 3131-JG-97, In the 239th District Court in and for Brazoria County,
Texas; or in the case styled City of Pharr et al. v. Rio Grande Valley Gas
Company et al., Cause No. C-4558-95-G-2, In the 370th District Court in and
for Hidalgo County, Texas.
b. No Admission of Liability: Claims are Disputed and Uncertain. The
Releasing Parties further agree and acknowledge that there is considerable
doubt, disagreement, dispute and controversy, with regard to the validity
and/or viability of the Settling Class Cities' claims against the Settling
Defendants and that the Settling Defendants have not and do not hereby
make any admission as to the legal or equitable liability of the Settling
Defendants for any liability amount of damages or justification for legal relief.
The Releasing Parties further acknowledge and agree that there is doubt,
disagreement, uncertainty and confusion as to the amount of said liability, if
any. The purpose of this Release and Settlement Agreement is to end the
dispute about the value of the claims made, or which could have been
asserted, by the Settling Class against the Settling Defendants, once and for
all.
c. Release of PG&E/TECO. The Class Plaintiffs, for themselves and on behalf
of the Settling Class Cities, and their agents, attorneys, representatives,
employees, elected and appointed officials, and all other related persons or
entities ("Releasing Parties"), hereby forever release, discharge, and acquit
the Settling Defendants, their successors, and assigns, of and from any and
all past, present, or future claims, demands, obligations, causes of action,
contentions or legal theories, known or unknown, and any and all past,
present, or future damage, including, without limitation, loss of income,
Final Release & Settlement Agreement
January 27, 2000 (5:55pm)
-5-
contractual rights or interests, statutory damages, pre- or post -judgment
interest, costs of court, punitive damages, attorneys' fees, and any other
damage or expense, accrued or unaccrued, whether now known or unknown,
fixed or contingent, real or spurious, and whether any of the foregoing arise
out of common law, contract, tort, equity, regulation, state or federal
constitution, statute, city ordinance or any other applicable law, which the
Releasing Parties now have or may hereafter accrue or acquire, which are
the subject of the litigation and ancillary litigation, and/or which might have
been asserted in any court, forum, tribunal, commission or agency
whatsoever, in connection with, arising out of, or in any way related to the
Pipelines, any acts, facts, transactions, occurrences, representations or
omissions asserted or which could have been asserted in the litigation and
ancillary litigation or arising for any reason out of any natural gas activities or
any relationship with, or duty owed by the Settling Defendants to the
Releasing Parties. It is not the intention of the Settling class Cities to
release any claims, if any, asserted by any such Settling Class City, either as
a class representative or class member, against any person or entity other
than the Settling Defendants named herein, in the case styled City of
Pearland on Behalf of Itself and All Other Similarly Situated Cities v. Entex,
Inc. et al., Cause No. 3131-JG-97, In the 239th District Court in and for
Brazoria County, Texas; or in the case styled City of Pharr et al. v. Rio
Grande Valley Gas Company et al., Cause No. C-4558-95-G-2, In the 370`h
District Court in and for Hidalgo County, Texas. It is the intention of the
Releasing Parties to release all claims and potential claims against the
Settling Defendants, including, only by way of example and not limitation: (1)
trespassing/purpresture upon city property; (2) failure to obtain lawful consent
for Pipelines within the city; (3) failure to pay monies or underpaying monies
due under street rental ordinances or other city ordinances impacting Pipeline
operations and Pipeline business activities; (4) tortiously interfering with any
Settling Class City's contract or franchise with its local gas distribution
company; (5) allegedly aiding and abetting third parties to violate any
franchise agreements or city ordinances; (6) breach of any expired or existing
franchise agreement between any Settling Class City and any of the Settling
Defendants; and (7) all other related causes of action..
7. WARRANTY OF FULL AUTHORITY AND NO ASSIGNMENT: The Releasing
Parties represent and warrant that they own and control 100% of the claims
released herein and have full authority to execute this Release and Settlement
Agreement. The Releasing Parties and Class Counsel represent, covenant, and
warrant that none of the claims released herein have previously been conveyed,
assigned, pledged, sold or transferred, in whole or in part, to any third party, and
that they have full authority to release any and all claims.
Final Release & Settlement Agreement
January 27, 2000 (5:55pm) - 6 -
8. AGREEMENT TO INDEMNIFY AND HOLD HARMLESS. The Releasing Parties
agree to indemnify and hold harmless Settling Defendants from any third party or
derivative liability claims against Settling Defendants asserted by any defendant in
any present or future litigation initiated by or on behalf of any one or more of the
Settling Class Cities that arises or is derived from the matters released herein. The
Releasing Parties do not by this Agreement release any claims that any Releasing
Party may possess or assert regarding franchise fee payments against Southern
Union Company; Southern Union Gas Company, a division of Southern Union
Company; the former Rio Grande Valley Gas Company, now known as Southern
Union Company; Mercado Gas Services, Inc. and/or Entex, a division of NORAM
Energy Corp. It is further understood and agreed that no Settling Class City is
required to indemnify or hold harmless any Settling Defendant for or on behalf of
any other Settling Class City.
9. CONTRACTUAL TERMS. The terms of this Agreement are contractual and not
mere recitals.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas.
11. ACKNOWLEDGMENT OF FULL UNDERSTANDING, OF REPRESENTATION BY
AND CONSULTATION WITH COUNSEL, AND DISCLAIMER OF RELIANCE.
a. Sophisticated: Parties Dealing at Arm's Length. The Settling Class
Cities, as Releasing Parties, agree and acknowledge that in
negotiating and entering into this Release and Settlement Agreement.
Releasing Parties and their counsel have at all times been dealing
with each other at arm's length, and all are knowledgeable and
sophisticated parties.
b. Warranties of Understanding, Full Disclosure. and
Representation by and Opportunity for Consultation with
Counsel. The Releasing Parties hereto represent and warrant: (i)
that they have read this Release and Settlement Agreement and fully
understand it; (ii) that they have been represented in this litigation by
Court appointed Class Counsel, and had the opportunity to consult
with their independent City Attorney and/or with other counsel of their
own choice; (iii) that they have agreed to be fully bound according to
the terms of this Release and Settlement Agreement. The Releasing
Parties acknowledge that they have had the opportunity to consult
with Class Counsel and/or their City Attorney or other independent
legal counsel regarding the entire contents of this Release and
Settlement Agreement, as well as the legal consequences of this
Final Release & Settlement Agreement
January 27, 2000 (5:55pm) - 7 -
Release and Settlement Agreement. In approving the execution of this
Release and Settlement Agreement by Class Counsel, each of the
Settling Class Cities is relying on its own judgment and each has been
represented by competent and able Class Counsel and has further
had the opportunity to consult with its own City Attorney or other legal
counsel in this matter.
c. Acknowledgment of No Other Promises or Agreements and
Disclaimer of Reliance. Each of the Settling Class Cities expressly
warrants and does hereby authorize Class Counsel, as Agents of the
Settling Class Cities, to state and represent that no promise or
agreement which is not herein expressed has been made to any of
the Settling Class Cities or their Counsel in exchange for entering into
and executing this Release and Settlement Agreement, and that none
of the Settling Class Cities or their Counsel is relying upon any
statement or representation of any agent of or Counsel for the Settling
Defendants being released hereby. In making the decision to settle
and by approving the execution of this Release and Settlement
Agreement by Class Counsel, the Settling Class Cities have relied on
their own knowledge and judgment and that of Class Counsel and/or
their City Attorney or other independent counsel, if any, and not in
reliance upon any representation, warranty, advice, or statement of
any kind made by or on behalf of the Settling Defendants or their
Counsel, unless and except to the extent that such representation,
warranty, advice, or statement is expressly contained in this Release
and Settlement Agreement.
12. NO MODIFICATION. This Full and Final Release and Settlement Agreement shall
not be modified unless any such modification is made in writing and signed by all the
parties hereto or their counsel.
13. BINDING UPON SUCCESSORS. This Full and Final Release and Settlement
Agreement shall be binding on, inure to the benefit of, and be enforceable by, the
Settling Defendants and their successors, heirs, assigns, trustees, administrators,
and legal and personal representatives.
14. CONSTRUCTION. This Full and Final Release and Settlement Agreement is the
result of mutual negotiations between and among the various parties and their
Counsel, and as such shall not be construed more strictly against one party.
Paragraph captions are for convenience only and shall not be used to interpret or
construe the paragraph to which they relate.
Final Release & Settlement Agreement
January 27, 2000 (5:55pm) - 8 -
15. MULTIPLE ORIGINALS. This Full and Final Release and Settlement Agreement
may be executed simultaneously in one or more duplicate originals, each one of
which shall be deemed an original.
EXECUTED this the _ day of , 2000.
the
The Cities of San Benito, Primera, and Port
Isabel,
Individually and as Class Representatives for
Settling Class Cities and Releasing Parties,
By:
Ramon Garcia, Class Counsel
Final Release & Settlement Agreement
January 27, 2000 (5:55pm) - 9 -
EXHIBIT "B" TO FULL & FINAL RELEASE AND SETTLEMENT AGREEMENT
LIST OF ANCILLARY LAWSUITS IN WHICH ALL CLAIMS AGAINST PG&E
DEFENDANTS WILL BE DISMISSED WITH PREJUDICE
1. Cause No. C-4558-95-G-3 City of Alton and City of Donna vs. Rio Grande Valley
Gas Co., PG&E Gas Transmission. Texas Corporation f/k/a Valero Eneray
Corporation, VT Company f/k/a Valero Transmission Company, PG&E Texas
Natural Gas Company, f/k/a Valero Natural Gas Company. PG&E Eneray Trading
Holdings Company f/k/a Valero Gas Marketing Company f/k/a Reata Industrial Gas
Company, PG&E Texas Pipeline, L.P. f/k/a Valero Transmission, L.P., and PG&E
Reata Eneray, L.P. f/k/a Reata Industrial Gas, L.P.; In the 370'h Judicial District
Court, Hidalgo County, Texas
2. Cause No. C-7079-96-B, City of San Juan, City of La Villa, City of Penitas, City of
Edcouch, and City of Palmview v. Rio Grande Valley Gas Co.. PG&E Gas
Transmission, Texas Corporation f/k/a Valero Energy Corporation, VT Company
f/k/a Valero Transmission Company, PG&E Texas Natural Gas Company, f/k/a
Valero Natural Gas Company, PG&E Energy Trading Holdings Company f/k/a
Valero Gas Marketing Company f/k/a Reata Industrial Gas Company, PG&E Texas
Pipeline, L.P. f/k/a Valero Transmission. L.P., and PG&E Reata Energy, L.P. f/k/a
Reata Industrial Gas, L.P.• In the 93`d Judicial District Court, Hidalgo County, Texas
Final Release & Settlement Agreement
January 27, 2000 (5:55pm)
AGENDA REQUEST
BUSINESS OF THE CITY COUNCIL
CITY OF PEARLAND, TEXAS
AGENDA OF: 2/28/00 ITEM NO. /
DATE SUBMITTED: DEPARTMENT OF ORIGIN : LEGAL
PREPARED BY: DARRIN COKER PRESENTOR: DARRIN COKER
SUBJECT: CLASS ACTION LITIGATION
EXHIBITS: ORDINANCE NO. 955 AND RELEASE AND SETTLEMENT AGREEMENT
EXPENDITURE REQUIRED - n/a
AMOUNT BUDGETED - n/a
ACCOUNT NO.
ADDITIONAL APPROPRIATION REQUIRED
ACCOUNT NO.
FUNDS AVAILABLE (Finance Department Approval)
EXECUTIVE SUMMARY
See attached memo.
RECOMMENDED ACTION
Consider proposed ordinance.
Darrin M. Coker
City Attorney
(281) 652-1666
Telecopier (281) 652-1679
Lisa D. Jones
Legal Secretary
(281) 652-1664
PRIVILEGED AND CONFIDENTIAL
ATTORNEY -CLIENT COMMUNICATIONS
TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: DARRIN M. COKER, CITY ATTORNEY
DATE: FEBRUARY 24, 2000
SUBJECT: CLASS ACTION LITIGATION
Nghiem V. Doan
Assistant City Attorney
(281) 652-1665
Telecopier (281) 652-1679
In November of last year, the City Council adopted an ordinance on its first reading intended to
settle a class action suit captioned City of San Benito v. PG&F Gas Transmission, et al. Due to changes
made to the final settlement, the City Council must once again consider a proposed Ordinance and
Release and Settlement Agreement to conclude the City's participation in the litigation.
This litigation was originally filed on December 31, 1996, against numerous defendants,
including Rio Grande Valley Gas Company, Southern Union Gas Company, and Mercado Gas
Services. Subsequently, several defendants were non -suited and a class action was certified against
Valero and PG&E, Defendants, on November 5,1997. The main plaintiffs in the case claimed that the
Defendants improperly trespassed on city rights -of -way without the consent of the cities. Although
Defendants may have had easements and consents through certain areas, there were some cities where
a lack of consent for the use of city rights -of -way existed. Plaintiffs, therefore, argued that this raised
an issue of a trespass on city rights -of -way.
After three years of litigation, the parties have reached an agreement to settle all claims.
Defendants have agreed to pay $12.2 million to settle the claims of the class members and to pay for
attorneys' fees and costs incurred by class counsel in litigating this action.
During the litigation, it was discovered that the Defendants had 40 feet of pipeline located in the
City of Pearland right-of-way that was not properly documented. Consequently, the agreed -to
settlement resulted in damages of approximately $714.00 to the City for Defendants' illegal trespass.
In addition, the settlement requires Defendants to enter into a franchise agreement granting consent for
transmission pipelines along, across, and under the City's right-of-way. Pursuant to the franchise
agreement, Defendants will pay a one-time fee equal to $2,000.00 per year for a 25-year term, reduced
to present value using a 6% per year discount rate. Translated, the City will receive an approximate
3519 LIBERTY DRIVE • PEARLAND, TEXAS 77581-5416-19 • (281) 485-2411 • www.ci.pearland.tx.us
Mayor and Councilmembers
February 24, 2000
Page 2
payment equal to $25,700.00. As part of the settlement, Defendants' class counsel has requested that
the City pass a resolution accepting the negotiated settlement and additionally pass a consent ordinance
which allows the Defendants to continue to do business within the City rights -of -way.
If you have any questions or comments regarding these matters, please feel free to contact my
office at (281) 652-1666.
Sincerely,
M, Coft4.
Darrin M. Coker
City Attorney
DMC/Idj
298