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HomeMy WebLinkAbout2014-05-06 - Regular City CouncilMINUTES OF REGULAR BUSINESS MEETING City of Stephenville - City Council Tuesday, May 6, 2014, 5:30 P.M. The City Council of the City of Stephenville, Texas, convened on May 6, 2014, at 5:30 p.m., in the Council Chambers at City Hall, 298 West Washington Street, for the purpose of a Regular Business Meeting, with the meeting being open to the public and notice of said meeting, giving the date, time, place and subject thereof, having been posted as prescribed by Chapter 551, Government Code, Vernon's Texas Codes Annotated, with the following members present, to wit: Mayor Jerry K. Weldon II Mayor Pro -Tem Malcolm Cross Council members Casey Hogan Doug Svien Russ McDanel Brady Pendleton Alan Nix Scott Evans Others Attending Mark A. Kaiser, City Administrator Randy Thomas, City Attorney Cindy L. Stafford, City Secretary I. Call to Order. The meeting of the Stephenville City Council was called to order at 5:30 p.m. on Tuesday, May 6, 2014, by Mayor Weldon. II. Citizens' General Discussion. No one desired to speak. III. Annual Report from Datamax—Amber Gibson and Jason Smith Amber Gibson, Project Manager, reported projects completed in FY 2014: • Implement new firewall. • Implement Miscrosoft Exchange Server 2013. • Implement new Cisco core switch at City Hall. Project Recommendations for FY 2015: • Develop a disaster recovery plan (DRP). Budget estimate, $35,000 • Implement new uninterruptible power supply (UPS) at the Police Department, Budget estimate, $15,000 MOTION by Brady Pendleton, second by Casey Hogan, to accept the report from Datamax. MOTION CARRIED. Regular Business Meeting May 6, 2014 Stephenville City Council IV. Public Hearing on the Proposed Annexation of 420 Acres, M. R. Williams Survey, A- 804, and being generally located east of US 281 and north of FM 8, Erath County, Texas Mayor Weldon opened a public hearing. Betty Chew reported that 420 acres of land located adjacent to the city limits is proposed for unilateral annexation. She explained that the city council will need to conduct two public hearings prior to annexing this land. The service plan detailing the municipal services that will be provided to the area once it has been annexed is included in the agenda packet as well as a map of the area to be annexed. Speaking in Favor of Annexation: Charles Simpson, 1291 North 011ie, Stephenville, stated that he is an employee of Texas AgriLife Research, which facility is located on subject property. Simpson said that his boss was unable to attend the meeting and was asked to attend in his place. Simpson said that the annexation will probably not affect the operations of the AgriLife Research Center; therefore, they do not oppose it. Tye Minkler, Vice President of Finance and Administration at Tarleton State University, stated that this annexation will provide the utility infrastructure needed for further development of the property. Speaking in Opposition of Annexation: No one. Mayor Weldon closed the public hearing. V. Consider Adoption of Ordinance No. 2014-10 Setting Date, Time and Place for Second Public Hearing on the Proposed Annexation of 420 Acres, M. R. Williams Survey, A- 804, Erath County, Texas MOTION by Alan Nix, second by Russ McDanel, to adopt Ordinance No. 2014-10. MOTION CARRIED. VI. PLANNING AND ZONING COMMISSION A. Consider Final Plat of AgTexas Addition, being 11.162 acres of land in the Henry Pearson Survey, Abstract 613, City of Stephenville, Erath County, Texas. MOTION by Scott Evans, second by Alan Nix, to approve the Final Plat of AgTexas Addition. MOTION CARRIED. B. PUBLIC HEARING to consider the following requests to rezone: Mayor Weldon opened a public hearing. Betty Chew explained that the property owner is requesting rezoning in order to even up the zoned property and classifications. Regular Business Meeting May 6, 2014 Stephenville City Council 1. From R-3 "Multiple Family Residential District" to B-1 "Neighborhood Business District", a 92 foot by 128 foot portion of Lot 5, Block 1, King Addition, located on the northwest corner of the W. Washington Street and N. Clinton Avenue intersection; and Speaking in Favor of Rezoning: No one. Speaking in Opposition of Rezoning: No one. 2. From B-1 "Neighborhood Business District" to R-3 "Multiple Family Residential District", a 72 foot by 29 foot portion of Lot 6, Block 1, King Addition, located on the 200 block of N. Clinton Avenue. Speaking in Favor of Rezoning: No one. Speaking in Opposition of Rezoning: No one. Mayor Weldon closed the public hearing. C. Consider Adopting Ordinance No. 2014-11 , rezoning from R-3 "Multiple Family Residential District' to B-1 "Neighborhood Business District', a 92 foot by 128 foot portion of Lot 5, Block 1, King Addition, located on the northwest corner of the W. Washington Street and N. Clinton Avenue intersection MOTION by Russ McDanel, second by Brady Pendleton, to adopt Ordinance No. 2014- 11. MOTION CARRIED. D. Consider Adopting Ordinance No. 2014-12, rezoning from B-1 "Neighborhood Business District' to R-3 "Multiple Family Residential District', a 72 foot by 29 foot portion of Lot 6, Block 1, King Addition, located on the 200 block of N. Clinton Avenue MOTION by Casey Hogan, second by Brady Pendleton, to adopt Ordinance No. 2014-12. MOTION CARRIED, E. PUBLIC HEARING to consider request to rezone from I "Industrial District' to B-2 "Retail and Commercial Business District", Lots 25, 26, 27, & 28A (Part of 25), Block 76, City Addition, located at 611 East Road Mayor Weldon opened a public hearing. Betty Chew reported that the property owner desires to use this property as a church. Speaking in Favor of Rezoning: No one. Speaking in Opposition of Rezoning: No one. Regular Business Meeting May 6, 2014 Stephenville City Council Mayor Weldon closed the public hearing. F. Consider Adopting Ordinance No. 2014-13, rezoning from I "Industrial District" to B- 2 "Retail and Commercial Business District", Lots 25, 26, 27, & 28A (Part of 25), Block 76, City Addition, located at 611 East Road MOTION by Alan Nix, second by Scott Evans, to adopt Ordinance No. 2014-13. MOTION CARRIED. VII. Consider Resolution No. 2014-03 denying the rate increase requested by Atmos Energy Corp, Mid -Tex Division under the company's 2014 annual rate review mechanism filing MOTION by Brady Pendleton, second by Alan Nix, to adopt Resolution 2014-03. MOTION CARRIED. VIII. Consider Approving Proposed Stephenville Pay Plan Casey Hogan, Chairman of the Personnel Committee, presented the proposed pay plan as follows: Target pay for each position will be based on a survey of cities and private sector businesses. Pay for each individual city employee will be set by the City Administrator, with the total for all pay for a single position type not to exceed 105% of the indexed survey average. The survey data will be indexed to account for cost- of -living variations within the survey and factored into the average survey position pay total. For each position, the Target Average Position Pay will set at 105% of the indexed, average position. Average Survey Position Pay x Cost of Living Index x 105% = Target Average Position Pay Average Survey Position Pay ($): Average median salary of a position defined by the survey Pay Survey Delta ($): Average Survey Position Pay – Current Stephenville Median Position Pay Cost of Living Index (%): Pay Survey Average Cost of Living / Stephenville Cost of Living If a current Stephenville position pay is less than the Target Average Position Pay. Proposed Pay Plan Buy -down Plan—for any position with a Current Stephenville Median Position Pay less than Target Position Pay, then budget a 1/3 increase toward the total delta each year. Regular Business Meeting May 6, 2014 Stephenville City Council Current Stephenville Average Position Pay + .33 (Target Average Position Pay—Current Stephenville Median Position Pay) + CPI Next Year's Stephenville Average Position Pay If a Current Stephenville Median Position Pay is more than the Target Average Position Pay. Current employee's pay is grandfathered, but no increase to Stephenville Median Position Pay. Carla Trussell, 406 Tanglewood Trail, Stephenville, posed the following question: "If a council member or his immediate family are impacted by his [council member's] vote, does the council member have to recuse himself?" City Attorney Thomas listed the provisions from Section 171 of the Local Government Code addressing conflict of interest. MOTION by Casey Hogan, second by Russ McDanel, to adopt the modified pay plan as presented. MOTION CARRIED by unanimous vote. IX. Consider Ordinance No. 2014-14 providing budget amendments for the remainder of the fiscal year beginning October 1, 2013 and ending September 30, 2014 MOTION by Russ McDanel, second by Casey Hogan, to adopt Ordinance No. 2014.14. MOTION CARRIED. X. Consider approving agreement between Texas Parks and Wildlife Department and City of Stephenville for construction of recreational trail improvements MOTION by Casey Hogan, second by Brady Pendleton, to approve the agreement with the Texas Parks and Wildlife Department for construction of recreational trail improvements. MOTION CARRIED. XI. Consider approving proposal by Contract Land Staff, LLC to provide right-of-way acquisition services on the Stephenville Clark Regional Airport MOTION by Alan Nix, second by Russ McDanel, to approve the proposal with Contract Land Staff, LLC. MOTION CARRIED. XII. Consider approving the Development Agreement for Lot 1, Block A, AgTexas Addition Billy Hassler and Kevin Canaday with Ag Texas were in attendance. City Administrator Kaiser reported that the city received a request from GSBS Architects, who is designing a new facility for AgTexas at 3145 West Washington. The request is for reimbursement for a water pressure pump and installation at a cost of approximately $14,600. Kaiser explained that a fire suppression system is required for this project, which necessitates greater water pressure than what is available at the site due to its elevation. The City of Regular Business Meeting May 6, 2014 Stephenville City Council Stephenville is in compliance with Rule §290.44, Title 30 of the Texas Administrative Code requiring a normal operating pressure of 35 psi. To address the situation, a water pressure pump will need to be installed to provide the needed pressure for the fire suppression system. Ag Texas is requesting the city to enter into an Economic Development Agreement to provide assistance to Ag Texas in offsetting the costs incurred with the pressure pump and installation. Following discussion, motion was made as indicated below. MOTION by Casey Hogan, second by Doug Svien, to approve the Development Agreement with Ag Texas. MOTION FAILED by the following vote: Ayes: Council members Hogan, Svien, and McDanel. Noes: Council members Cross, Pendleton, Nix, and Evans. XIII. CONSENT AGENDA Mayor Weldon asked that Item B. be removed from the Consent Agenda. MOTION by Doug Svien, second by Brady Pendleton, to approve Items A., C., D., and E. MOTION CARRIED. Mayor Weldon noted that the low bid for the brick street project is $19,525 above the budgeted amount. He asked if the scope of the project could be reduced to stay in line with the budget amount. Kaiser explained that the scope of the project could only be reduced by 25%, which would still be above budget or we could rebid the project. Kaiser indicated that there are sufficient funds to cover the overage. MOTION by Doug Svien, second by Alan Nix, to approve the bid award for the Brick Streets Project. MOTION CARRIED. A. Approve Minutes 1.April 1, 2014 Regular Council Meeting 2.April 15, 2014 Special Council Meeting B. Approve Bid Award for Brick Streets Project C. Approve Sale of Police (CID) Unit 194, 2008 Dodge Charger D. Approve Contract Forms for 2013 Texas CDBG Program E. Accept Subdivision and Infrastructure Improvements for Lakewood Estates Phase 3 Regular Business Meeting May 6, 2014 Stephenville City Council XIV. Comments by City Administrator The sewer line project in the Lockwood addition is progressing well. The disc golf course is being installed in City Park. XV. Comments by Council members Mayor Weldon asked the City Attorney to research and report on the recent ruling on Town of Greece v. Galloway, No. 12-696 Supreme Court of the United States and the implications of same for this council. XVI. EXECUTIVE SESSION. At 7:51 p.m., Mayor Weldon recessed the open portion of the meeting, and council went into executive session in compliance with the provisions of the Texas Open Meetings Law, Subchapter D, Government Code, Vernon's Texas Codes, Annotated, in accordance with Sec. 551.071 Consultation with Attorney— Lamar Advantage Holding Company v. The City of Stephenville and Mark Kaiser v. Marilyn Kay McAlister and John Paul McAlister, III, Cause No. CV -31132, District Court of Erath County, Texas Council reconvened in open session at 8:05 p.m. XVII. Action taken on matters discussed in executive session (if necessary) No action was taken. XVIII. Adjourn MOTION by Alan Nix, second by Scott Evans, to adjourn the meeting. MOTION CARRIED at 8:05 p.m. Jerr K. 1don II, Mayor ATTEST: Cindy L. St 1" rd, Ci y Sec ry Regular Business Meeting May 6, 2014 Stephenville City Council ORDINANCE NO. 2014--10 AN ORDINANCE SETTING A DATE, TIME AND PLACE FOR A PUBLIC HEARING ON THE PROPOSED ANNEXATION OF CERTAIN PROPERTY BY THE CITY OF STEPHENVILLE, TEXAS, AUTHORIZING AND DIRECTING THE MAYOR TO PUBLISH NOTICE OF SUCH PUBLIC HEARING. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: SECTION 1. On the 3`d day of June, 2014, at 5:30 p.m. in the City Council Chamber of the City Hall of the City of Stephenville, Texas, the City Council will hold a public hearing giving all interested persons the right to appear and be heard on the proposed annexation by the City of Stephenville, Texas of the following described property, to -wit: BEING a 420.0 acre tract of land situated in the M.R. Williams Survey, Abstract No. 804 and being generally located east of U.S. Highway 281, north of F.M. 8 and west of S.H. 108 in the City of Stephenville, Erath County, Texas, and being more particularly described as follows: BEGINNING at the southern point of the corner clip at the northwest corner of the intersection of U.S. Highway 281 and F.M. 8, being on the arc of a curve to the left whose center bears South 15 degrees 43 minutes 22 seconds East a distance of 1,195.0 feet, having a central angle of 57 degrees 33 minutes 51 seconds and a tangent length of 656.5 feet; THENCE along the north R.O.W. line of said F.M. 8 and along said curve to the left an arc length of 1,200.6 feet to the Point of Tangency f said curve. THENCE continuing along said north R.O.W. of F.M. 8, South 16 degrees 42 minutes 47 seconds West a distance of 570.0 feet to the Point of Curvature of a curve to the right having a central angle of 43 degree 54 minutes 04 seconds, a radius of 2,240.0 feet and a tangent length of 902.8 feet; THENCE in a Southerly direction along said curve to the right an arc length of 1,716.3 feet to the Point of Tangency of said curve, being on the south end of a corner clip at the northwest corner of the intersection of F.M. 8 and College Farm Road; THENCE continuing along the north R.O.W. line of F.M. 8, South 60 degrees 36 minutes 51 seconds West, a distance of 91.0 feet to an angle point; THENCE continuing along the north R.O.W. line of F.M. 8, South 87 degrees 36 minutes 46 seconds West, a distance of 50.0 feet to an angle point; THENCE continuing along the north R.O.W. line of F.M. 8, South 62 degrees 56 minutes 37 seconds West, a distance of 660.0 feet to a point in the center of the North Bosque River; THENCE along the center of the North Bosque River the following; THENCE North 27 degrees 28 minutes 47 seconds West, a distance of 75.0 feet; THENCE North 60 degrees 53 minutes 39 seconds West, a distance of 100.0 feet; THENCE North 88 degrees 10 minutes 49 seconds West, a distance of 125.0 feet; THENCE South 69 degrees 17 minutes 38 seconds West, a distance of 385.0 feet; THENCE South 86 degrees 17 minutes 51 seconds West, a distance of 130.0 feet; THENCE North 73 degrees 06 minutes 46 seconds West, a distance of 140.0 feet; THENCE North 38 degrees 37 minutes 24 seconds West, a distance of 100.0 feet; THENCE North 01 degrees 25 minutes 55 seconds West, a distance of 300.0 feet; THENCE North 08 degrees 58 minutes 17 seconds West, a distance of 165.0 feet; THENCE North 21 degrees 54 minutes 37 seconds West, a distance of 120.0 feet; THENCE North 47 degrees 51 minutes 17 seconds West, a distance of 145.0 feet; THENCE North 34 degrees 03 minutes 55 seconds West, a distance of 245.0 feet; THENCE North 53 degrees 49 minutes 12 seconds West, a distance of 135.0 feet; THENCE North 75 degrees 33 minutes 37 seconds West, a distance of 90.0 feet; THENCE South 85 degrees 48 minutes 39 seconds West, a distance of 160.0 feet; THENCE North 80 degrees 39 minutes 44 seconds West, a distance of 270.0 feet; THENCE North 65 degrees 08 minutes 33 seconds West, a distance of 275.0 feet; THENCE North 81 degrees 34 minutes 17 seconds West, a distance of 165.0 feet; THENCE South 80 degrees 41 minutes 51 seconds West, a distance of 165.0 feet; THENCE South 71 degrees 06 minutes 29 seconds West, a distance of 450.0 feet; THENCE South 78 degrees 33 minutes 25 seconds West, a distance of 165.0 feet; THENCE South 61 degrees 22 minutes 08 seconds West, at distance of 145.0 feet passing the east R.O.W. line of S.H. 108 in all a distance of 245.0 feet to a point on the west R.O.W. line of said S.H. 108 for corner; THENCE along the west R.O.W. line of said S.H. 108, North 28 degrees 47 minutes 45 seconds West, a distance of 1,103.9 feet to a point for corner; THENCE North 60 degrees 14 minutes 52 seconds East, a distance of 7,705.3 feet to a point in the west R.O.W. line of U.S. Hwy. 281 for corner; THENCE South 88 degrees 18 minutes 14 seconds East, a distance of 100.0 feet to a point in the east R.O.W. line of said U.S. Hwy. 281 for corner; THENCE along the east R.O.W. line of said U.S. Hwy. 281, South 01 degrees 41 minutes 46 seconds West, a distance of 2,603.6 feet to a point for corner; THENCE North 88 degrees 18 minutes 14 seconds West, a distance of 100.0 feet to a point on said east R.O.W. line of said U.S. Hwy. 281, being on the northern point of a corner clip at the northwest corner of the intersection of said U.S. Hwy. 281 and F.M. 8; THENCE along said corner clip, South 37 degrees 03 minutes 01 seconds West a distance of 128.0 feet to the POINT OF BEGINNING and containing 420.0 acres (18,294,802 square feet) of land, more or less. SECTION 2. The Mayor of the City of Stephenville, is hereby authorized and directed to cause notice of such public hearing to be published once in a newspaper having general circulation in the city and in the above described territory not more than twenty days nor less than ten days prior to the date of such public hearing, in accordance with the Municipal Annexation Act. PASSED AND APPROVED this the 6th day of May, 2014. Jerr K. a don, II, Mayor ATTE T: I 011 A Cindy L. Sta rd, City ecret - Hy/t )K� Reviewed by Mark A. Kaiser, Ciittyy Administrator Approved as to form and legality by Randy Thomas, City Attorney ORDINANCE NO. 2014-11 AN ORDINANCE REZONING THE LAND DESCRIBED FROM THE ZONING CLASSIFICATION OF R-3 "MULTIPLE FAMILY RESIDENTIAL DISTRCIT" TO B-1 "NEIGHBORHOOD BUSINESS DISTRICT". BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: All that lot, tract or parcel of land being 92 feet by 128 feet of Lot 5, Block 1, King Addition, City of Stephenville, Erath County, Texas. And it is hereby rezoned and the zoning classification changed from the classification of R-3 "Multiple Family Residential District" to B-1 "Neighborhood Business District' in accordance with the Zoning Ordinance of the City of Stephenville. PASSED AND APPROVED this the 6th day of May, 2014. -'l1,4,11x- Jerry K. 49 don, II, Mayor ATTEST: C Cindy L. S fford, City S tary A Z_ Reviewed by Mark A. Kaiser City Administrator Randy Thomas, City At orney Approved as to form and legality ORDINANCE NO. 2014-12 AN ORDINANCE REZONING THE LAND DESCRIBED FROM THE ZONING CLASSIFICATION OF B-1 "NEIGHBORHOOD BUSINESS DISTRICT" TO R-3 "MULTIPLE FAMILY RESIDENTIAL DISTRCIT". BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: All that lot, tract or parcel of land being 72 feet by 29 feet of Lot 6, Block 1, King Addition, City of Stephenville, Erath County, Texas. And it is hereby rezoned and the zoning classification changed from the classification of B-1 "Neighborhood Business District" to R-3 "Multiple Family Residential District" in accordance with the Zoning Ordinance of the City of Stephenville. PASSED AND APPROVED this the 6th day of May, 2014. Jerr K. VqIdon, II, Mayor ATTEST: I Cindy L. 01orcl, 6ity S tary �� . Reviewed by Mark A. Kaiser City Administrator '1 Randy Thomas, City Attorney Approved as to form and legality ORDINANCE NO. 2014-13 AN ORDINANCE REZONING THE LAND DESCRIBED FROM THE ZONING CLASSIFICATION OF I "INDUSTRIAL DISTRICT" TO B-2 "RETAIL AND COMMERCIAL BUSINESS DISTRICT". BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: All that lot, tract or parcel of land being Lots 25, 26, 27, & 28A (Part of 25), Block 76, City Addition, City of Stephenville, Erath County, Texas. And it is hereby rezoned and the zoning classification changed from the classification of I "Industrial District" to B-2 "Retail and Commercial Business District" in accordance with the Zoning Ordinance of the City of Stephenville. PASSED AND APPROVED this the 6th day of May, 2014. C_W U6 11e Jerl K. VqIdon, II, Mayor ATTEST: A� v ' Cindy L fiord, City Se ary Reviewed by Mark A. Kaiser City Administrator C– t Randy Thomas, City Att ney Approved as to form and legality ORDINANCE NO. 2014-14 AN ORDINANCE PROVIDING BUDGET AMENDMENT FOR THE REMAINDER OF THE FISCAL YEAR BEGINNING OCTOBER 1, 2013 AND ENDING SEPTEMBER 30, 2014. WHEREAS, the budget amendment of: Increase(Decrease)Revenue Property Taxes 99,042 Sales Taxes 100,000 Other Taxes 50,000 License & Permits 200,000 Grants 49,390 Service Charges 150,000 Reserves 384,526 $ 1,032,958 Increase(Decrease)Expenditures Emergency Management 46,300 Human Resources 116,668 Communications 49,390 Public Safety 50,000 Non Departmental 500,000 Water Production 80,000 Water Non Departmental 166,500 Storm Water Non Departmental 24,100 $ 1,032,958 Net budget Increase (Decrease) _$__=0_ for the fiscal year beginning October 1, 2013 and ending September 30, 2014, was duly presented to the City Council by the City Administrator and a public notice was posted in the Stephenville City Hall. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: SECTION 1. That the amended appropriations and anticipated revenues for the fiscal year beginning October 1, 2013 and ending September 30, 2014 for the support of the general government of the City of Stephenville, Texas, be amended and fixed for the remainder of the fiscal year ending September 30, 2014, with the revenues and expenditures shown. SECTION 2. That the amended budget is hereby approved in all respects and adopted as the City's budget for the remainder of the fiscal year ending September 30, 2014, Budget Amendments FY13/14—Page 1 PASSED and APPROVED this the 6"day of May, 2014. (J, - -- Jerry K. vvI on II, Mayor Reviewed by Mark A. Kaiser, City Administrator Randy Thomas, City Attorney Approved as to form and legality Budget Amendments FY13/14—Page 2 RESOLUTION NO. 2014-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS, DENYING THE RATE INCREASE REQUESTED BY ATMOS ENERGY CORP., MID-TEX DIVISION UNDER THE COMPANY'S 2014 ANNUAL RATE REVIEW MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL JURISDICTION; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES PERTAINING TO REVIEW OF THE RRM; AUTHORIZING THE CITY'S PARTICIPATION WITH ATMOS CITIES STEERING COMMITTEE IN ANY APPEAL FILED AT THE RAILROAD COMMISSION OF TEXAS BY THE COMPANY; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES IN ANY SUCH APPEAL TO THE RAILROAD COMMISSION; DETERMINING THAT THIS RESOLUTION WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND THE STEERING COMMITTEE'S LEGAL COUNSEL. WHEREAS, the City of Stephenville, Texas ("City") is a gas utility customer of Atmos Energy Corp., Mid -Tex Division ("Atmos Mid -Tex" or "Company"), and a regulatory authority with an interest in the rates and charges of Atmos Mid -Tex; and WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of approximately 164 similarly situated cities served by Atmos Mid -Tex that have joined together to facilitate the review of and response to natural gas issues affecting rates charged in the Atmos Mid -Tex service area; and WHEREAS, pursuant to the terms of the agreement settling the Company's 2007 Statement of Intent to increase rates, ACSC Cities and the Company worked collaboratively to develop a Rate Review Mechanism ("RRM") tariff that allows for an expedited rate review process controlled in a three-year experiment by ACSC Cities as a substitute to the current Gas Reliability Infrastructure Program ("GRIP") process instituted by the Legislature; and WHEREAS, the City took action in 2008 to approve a Settlement Agreement with Atmos Mid -Tex resolving the Company's 2007 rate case and authorizing the RRM tariff; and WHEREAS, in 2013, ACSC and the Company negotiated a renewal of the RRM tariff process for an additional five years; and WHEREAS, the City passed an ordinance renewing the RRM tariff process for the City for an additional five years; and WHEREAS, the RRM renewal tariff contemplates reimbursement of ACSC Cities' reasonable expenses associated with RRM applications; and WHEREAS, on or about February 28, 2014, the Company filed with the City its second annual RRM filing under the renewed RRM tariff, requesting to increase natural gas base rates by $45.7 million; and Resolution Denying Atmos Rate Increase Page 1 1 WHEREAS, ACSC coordinated its review of Atmos Mid-Tex's RRM filing through its Executive Committee, assisted by ACSC attorneys and consultants, to investigate issues identified by ACSC in the Company's RRM filing; and WHEREAS, ACSC attorneys and consultants have concluded that the Company is unable to justify a rate increase of the magnitude requested in the RRM filing; and WHEREAS, ACSC's consultants determined the Company is only entitled to a $19 million increase, approximately 42% of the Company's request under the 2014 RRM filing; and WHEREAS, the Company would only be entitled to approximately $31 million if it had a GRIP case; and WHEREAS, the Company's levels of operating and maintenance expense have dramatically risen without sufficient justification; and WHEREAS, the Company has awarded its executives and upper management increasing and unreasonable levels of incentives and bonuses, expenses which should be borne by shareholders who received a 23% total return on investment in 2013; and WHEREAS, the Company requested a drastically high level of medical expense that is unreasonable and speculatively based upon estimates; and WHEREAS, ACSC and the Company were unable to reach a compromise on the amount of additional revenues that the Company should recover under the 2014 RRM filing; and WHEREAS, the ACSC Executive Committee, as well as ACSC's counsel and consultants, recommend that ACSC Cities deny the requested rate increase; and WHEREAS, the Company's current rates are determined to be just, reasonable, and in the public interest. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: Section 1. That the findings set forth in this Resolution are hereby in all things approved. Section 2. That the City Council finds that Atmos Mid -Tex was unable to justify the appropriateness or the need for the increased revenues requested in the 2014 RRM filing, and that existing rates for natural gas service provided by Atmos Mid -Tex are just and reasonable. Section 3. That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the ACSC Cities in processing the Company's RRM application. Section 4. That in the event the Company files an appeal of this denial of rate increase to the Railroad Commission of Texas, the City is hereby authorized to intervene in such appeal, and shall participate in such appeal in conjunction with the ACSC membership. Further, in such event Atmos Mid - Tex shall reimburse the reasonable expenses of the ACSC Cities in participating in the appeal of this and other ACSC City rate actions resulting from the 2014 RRM filing. Resolution Denying Atmos Rate Increase Page 12 Section 5. That the meeting at which this Resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 6. That if any one or more sections or clauses of this Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Resolution and the remaining provisions of the Resolution shall be interpreted as if the offending section or clause never existed. Section 7. That a copy of this Resolution shall be sent to Atmos Mid -Tex, care of Chris Felan, Manager of Rates and Regulatory Affairs, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725. RESOLVED this 6" day of May, 2014. ATTEST: �1.%.a. 11 1,1315 fir.. Resolution Denying Atmos Rate Increase Page 13 L,-,Z- Jerl K. 19 Idon, II Mayor APPROVED AS TO FORM: Randy Thomas, City Attorney