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HomeMy WebLinkAboutCity Council-Agenda Packets-11/10/2004 Page 2 of3 . Several of the opponents have a vested financial interest in not having competition. I hope those against realized this. . Economic development is a major initiative of the city. This will continue all across the city and much swifter than in the past. I view this as but one battle in a protracted war. I would love Colleyville to follow in the economic footsteps of South Lake but everyone admits that boat has long sailed. I hope this becomes a clarion call for all opponents to get more active in the process to avoid similar repeats. In particular, I will be looking for their reaction, and more importantly, their actions, such as picking at this site, if an undesirable development goes up. Otherwise, we get what we deserve. My prediction is that Service Star will offload this property cheaply to a cheap developer who will bypass P&Z completely by keeping this CC2. Be ready for anything and let's hope my prediction is wrong. Let'S! see the action of the populace to the upcoming vote on raising our property taxes as the article below states... The loss of the more than $450,000 projected in future sales taxes from the site is likely to create additional debate in the near future. The City Council has announced plans to float a bond issue to the voters in February, requiring a property tax increase on the homeowners of Colleyville. The turning down of a commercial project, where the developer had made such extraordinary efforts to alleviate any aesthetic concerns, is not likely to bode well with many voters that will be asked to pay more taxes on their homes. Regards, John November 5, 2004 Pecan Creek Project reject has familiar ring City Council says totally committed to economic development, unless....... On a 3 to 2 vote the Colleyville City Council shot down the northem entry gateway plan of Service Star. After almost 2 years of haggling, redrawn plans and meeting with citizens, city council said no to the project that was to feature a tire store and gas station. It might be said that developers looking to Colleyville as a potential location for development had their possibilities narrowed again by the decision of Colleyville's City Council on Wednesday evening. No gas stations or tire stores will be welcomed in town under any circumstances. After an almost hour long update by the developer and his various attorneys and experts the public hearing opened with citizens waiting to have their say. While Wednesday evening resulted in a number of local residents encouraging the council to approve the project, the council seemed swayed by the work of local activists that gathered hundreds of signatures in opposition. Mayor Joe Hocutt and ally Council member Mark Skinner had declared well in advance that they intended to oppose the project. Observers had little doubt that Hocutt would have vetoed the project should it pass and residents would be subject to even more long hours of haggling and grandstanding by numerous parties with a wide array of interest and motivation. However, Mayor Pro Tem Jon Ayers announced that he felt the project's tire store and gas station, making up about 13% of the overall development, was not an adequate enough tax generator. Ayers' 2:00 am declaration was the apparent death blow to the project that faced a contingent of area resident opposition. 11/9/2004 Page 3 of3 Council member Elaine Dolan and Rich Hendler stated the vast improvements and written guarantee of performance by the developer were paramount in their decision. Hendler said that this project looks nothing like the one first presented over one year ago. After a 2 to 2 vote, Council member Tom Hart cast the deciding "aye" vote to deny the zoning change allowing a gas station on the site. The developer has stated that they plan to re-open Phast Phils gas station across the street should the project be denied. However, Mayor Joe Hocutt announced another City Attorney surprise opinion that since the gas station had not remained open on a continuous basis that it would require a new Special Use Permit, passed by council, to open the facility. That decision would seem destined to create a two prong future problem, a.) the developer is likely to file a lawsuit over any similar decision, and b.) council members may be faced with another gas station decision in the future. The developer of the 15 acres is free to build a number of strip retail outlets, that under the current zoning, do not require further City Council approval. For example, the 99 cent store on the Southern end of town required no approval. Mark DeRose, the owner of the property, told City Council that the practical business side of the project should be obvious. DeRose said the water features, landscaping, architectural changes and city entry monument were all possible only because of the participation of Shell and the tire store aspects. Without these, he said the project could not spend the funds to create the type of lush surroundings contemplated for the site. DeRose also said that if the zoning was rejected that he would move forward with opening the gas station across the street and building a traditional strip center in the location. Ayers said that he was confident the site would be developed and would generate sales tax in the future, therefore he was not prepared to support the project with the gas station and tire store that he said would generate little sales taxes. No one disputed that the developer had made extraordinary efforts to satisfy the concerns of citizens with the one exception that the gas station and tire store remained an integral part of the development. The developer was described as having made more concessions and efforts to satisfy the citizens request than any in memory, stated fellow developer Kipp Whitman. Whitman originally opposed the project however stated Wednesday night he felt there had been major movement that would make the development more acceptable. The turning down of the developer, in the face of the City Council's unanimous commitment to support commercial growth in the city, is not likely to set well with some financial watchers who are suggesting the city is running in the red. The loss of the more than $450,000 projected in future sales taxes from the site is likely to create additional debate in the near future. The City Council has announced plans to float a bond issue to the voters in February. The bond issue will require a property tax increase on the homeowners of Colleyville. The turning down of a commercial project, where the developer had made such extraordinary efforts to alleviate any esthetic concerns, is not likely to bode well with many voters that will be asked to pay more taxes on their homes. One person leaving the proceedings on Wednesday night said the City Council made a decision tonight that they are offended by a gas station, but apparently not offended by the thought of raising taxes.....knowing the truth of what is coming, many more citizens may have shown up and decided a gas station surrounded by trees, a bridge and water features with a city monument might not been so bad after all," said the long time council observer who asked not to be identified because some of his neighbors were strongly against the project. 11/9/2004 Page 1 of3 82162/DOLAN, ELAINEGA123 Sent: To: From: johnt /johnt@systimax.com [johnt@systimax.com] Sunday, November 07,2004 11 :51 AM dolane /dolane@ci.colleyville.tx.us; rjhendler /rjhendler@dow.com; jayers /jayers@ayersfirm.com; hartt /hartt@ci.colleyville.tx.us Cc: johnt /johnt@systimax.com Subject: Fw: Pecan Creek This summarizes my view of Wednesday's vote that I sent to a local opponent. Feel free to pass this on if you want. I think Colleyville is worse for this vote. And I hope that the Council will admonish the City Attorney for declaring such a pivotal ruling on Phast Phil's so late in the game. I find it reprehensible that such a vote-changing fact was declared after all public comments were in. This citizen felt taken in this process. I hope the Council is motivated to action so as not to repeat this. I know this was a tough call for all. My main hope in writing this is to spur people to action instead of reaction. Instead, we threw that baby out with the bathwater. John FORWARDED... Congratulations on the decision. This was a tough trade between a beautiful development that met the desires for economic development and citizen's mandate not to have a tire store and gas station. The close vote should be evidence of this; the Council struggled with doing the right thing. And all were shocked when we heard, at the very end of the public comments, about the possible 6- month ruling on Fast Phil's. I was none to happy at the Council staff for not finding this out for 6 months! It may have changed the opinions of several, quite possibly the undersigned and would have been used as leverage to force compromise. A couple of observations: . Many of those speaking in favor of the development did not like the tire store or gas station but felt the known was better than the unknown, especially with the lattitude and lack of oversight CC2 brings. . Almost all of those speaking in favor of the development are proactive participants in the economic development process (P&Z head, several past Council persons, several economic development participants) and saw the vision and uniqueness of this development. I think this is best summed up by a statement by a proactive citizen, "I really think this is the best we can get, and I think we shou1djump on it," said Luann Edwards, member of the Planning and Zoning Commission. "This developer is offering to build the entrance to Colleyville we've been looking for for years and never been able to do." 11/912004 city Of rr<< \U ll~ Texas PUBLIC NOTICE COLLEYVILLE CITY COUNCIL WORKSESSION AGENDA NOVEMBER 10, 2004 6:00 P.M. CITY HALL 100 MAIN STREET EXECUTIVE CONFERENCE ROOM I. Call to Order II. Discussion of Bond Election a. Review Capital Improvement Project's schedule b. Structure and format of ballot language III. Adjournment I certify that the above notice was posted on the Bulletin Board at City Hall on Friday, Nov~mbe.r 5, 2.004, at~~O p.mft'. /~'Al/t)' )f~, ~j /'(}';;[{r<-L-/'- .' 0 Cynthia Singleton, TRMC City Secretary 100 MAIN STREET COLLEYVILLE, TEXAS 76034 (817) 503-1000 z o it -I -::r '" III tT o < '" o Iii 1ii 0. o ::> g. :i" o <= 0. '" "0 .2. '" !l '" 0. o o .. 0;- s. (ii' .. " III ::> l;! ~ -::r 1i" -::r (ii' '" !!l. 3 III it 0. o g N :Ii. 'U)> 0 'U "T1 III ::> '" .2. (ii' '< ::> 5I '" ~ 3 " !!!. -I !l '" III '" -< 3.0 >< 0. 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A RESOLUTION ordering a bond election to be held in the City of Colleyville, Texas, making provision for the conduct of the election and resolving other matters incident and related to such election. WHEREAS, the City Council of the City of Colleyville, Texas hereby finds that an election should be held to determine whether said governing body shall be authorized to issue bonds of said City in the amounts and for the purposes hereinafter identified; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS: SECTION 1: An election shall be held on the 5th day of February, 2005, in the City of Colleyville, Texas, which date is not less than sixty-two (62) nor more than ninety (90) days from the date of the adoption hereof and is a uniform election date pursuant to V.T.C.A, Election Code, Section 41.001 (a), for the purpose of submitting the following measures: PROPOSITION NUMBER 1 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $8,085,000 for permanent public improvements and public purposes, to wit: street improvements, including drainage and curbs incidental thereto and the acquisition of land and rights-of-way therefor; such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" PROPOSITION NUMBER 2 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $4,815,000 for permanent public improvements and public purposes, to wit: street improvements, including sidewalks, drainage, curbs and landscaping incidental thereto and the acquisition of land and rights-of-way therefor, for Tara subdivision, and sidewalk improvements for portions of Bedford Road, Thompson Terrace, Pleasant Run Road, Colleyville Blvd. and Glade Road, such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" 45524597.3 PROPOSITION NUMBER 3 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $2,245,000 for permanent public improvements and public purposes, to wit: street improvements (Colleyville Blvd. hardscaping and landscaping improvements); such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" PROPOSITION NUMBER 4 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $4,575,000 for permanent public improvements and public purposes, to wit: public safety facilities and equipment (Central Fire Station improvements, fire fighting equipment and outdoor warning sirens), including the acquisition of land for such facilities; such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" PROPOSITION NUMBER 5 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $1,000,000 for p~rmanent public improvements and public purposes, to wit: park improvements (McPherson Park Phase I and constructing and equipping a senior citizen center); such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" 45524597.3 2 PROPOSITION NUMBER 6 "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $13,735,000 for permanent public improvements and public purposes, to wit: street improvements (Colleyville Blvd. utility line relocation, including the acquisition of easements and right-of-way therefor); such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" SECTION 2: eSlate Direct Recording Electronic Voting System (DRE's) shall be used in this election for early voting and the Optech III-P Eagle voting system shall be used on election day and for early voting by mail. Ballots and ballot labels shall be prepared in accordance with V.T.C.A., Election Code, and permit electors to vote "FOR" or "AGAINST" the aforesaid measures which shall appear on the ballot substantially as follows: PROPOSITION NUMBER 1 "THE ISSUANCE OF $8,085,000 GENERAL OBLIGATION BONDS FOR STREET IMPROVEMENTS" PROPOSITION NUMBER 2 "THE ISSUANCE OF $4,815,000 GENERAL OBLIGATION BONDS FOR STREET IMPROVEMENTS FOR TARA SUBDIVISION, AND SIDEWALK IMPROVEMENTS FOR BEDFORD ROAD, THOMPSON TERRACE, PLEASANT RUN ROAD, COLLEYVILLE BLVD. AND GLADE ROAD" PROPOSITION NUMBER 3 "THE ISSUANCE OF $2,245,000 GENERAL OBLIGATION BONDS FOR STREET IMPROVEMENTS (COLLEYVILLE BLVD. HARDSCAPE AND LANDSCAPING IMPROVEMENTS)" PROPOSITION NUMBER 4 "THE ISSUANCE OF $4,575,000 GENERAL OBLIGATION BONDS FOR PUBLIC SAFETY FACILITIES AND EQUIPMENT (CENTRAL FIRE STATION IMPROVEMENTS, FIRE FIGHTING EQUIPMENT AND OUTDOOR WARNING SIRENS)" PROPOSITION NUMBER 5 "THE ISSUANCE OF $1,000,000 GENERAL OBLIGATION BONDS FOR PARK IMPROVEMENTS (McPHERSON PARK PHASE I AND CONSTRUCTING AND EQUIPPING A SENIOR CITIZENS CENTER)" 45524597.3 3 PROPOSITION NUMBER 6 "THE ISSUANCE OF $13,735,000 GENERAL OBLIGATION BONDS FOR STREET IMPROVEMENTS (COLLEYVILLE BLVD. UTILITY LINE RELOCATION)" SECTION 3: The entire City shall constitute one election precinct for this election and Colleyville City Hall, 100 Main Street, Colleyville, Texas is hereby designated the polling place. The persons hereby appointed to serve as the election officers at said polling place are as follows: BERTHA WESTERMAN EDDIE CARROLL PRESIDING JUDGE ALTERNATE PRESIDING JUDGE The Presiding Judge shall appoint not less than two (2) nor more than five (5) qualified clerks to serve and assist in holding said election; provided that if the Presiding Judge herein appointed actually serves, the Alternate Presiding Judge shall be one of the clerks. On election day, the polls shall be open from 7:00 AM. to 7:00 P.M. Early voting shall be conducted at City Hall, Training Room, Second Floor, 100 Main Street, Colleyville, Texas 76034, in accordance with the provisions of V.T.C.A, Election Code. Early voting for this election shall begin Wednesday, January 19, 2005, and end Tuesday, February 1, 2004, and the hours designated for early voting by personal appearance shall be from 8:00 a.m. to 5:00 p.m. on each day, except Saturdays, Sundays and official State holidays; provided, however, early voting shall also be conducted on Saturday, January 29, 2005, from 9:00 a.m. to 3:00 p.m. For purposes of processing ballots cast in early voting, the election officers for the early voting ballot board for this election shall be appointed and designated in accordance with the provisions of the election services contract with the Tarrant County Elections Administrator. SECTION 4: All resident qualified electors of the City shall be permitted to vote at said election. This election shall be held and conducted in accordance with the provisions of V.T.C.A, Election Code and V.T.C.A, Government Code, Chapter 1251, and as may be required by law, all election materials and proceedings shall be printed in both English and Spanish. SECTION 5: A substantial copy of this Resolution shall serve as proper notice of said election. Said notice, including a Spanish translation thereof, shall be posted at three (3) public places within the City and at the City Hall not less than twenty-one (21) full days prior to the date on which said election is to be held, and be published on the same day in each of two successive weeks in a newspaper of general circulation in said City, the first of said publications to appear in said newspaper not more than thirty (30) days and not less than fourteen (14) full days prior to the day of the election. 45524597.3 4 PASSED AND APPROVED, this November 16,2004. CITY OF COllEYVlllE, TEXAS JOE HOCUTT Mayor ATTEST: CYNTHIA SINGLETON, TRMC City Secretary (City Seal) 45524597.3 S-1 FULBRIGHT & ~AWORSKI L.L.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE. SUITE 2800 DALLAS. TEXAS 75201-2784 WWW.FULBRIGHT.COM GSCHAECH ER@F"ULBRIGHT.COM DIRECT DIAL: (214) 855-8153 TELEPHONE: F"ACSIMILE: (214) 855-8000 (214) 855-8200 November 2, 2004 Ms. T. Lynn Stuck Assistant Attorney General Chief, Public Finance Division 300 W. 15th Street, 9th Floor Austin, TX 78701 Re: Costs of Underaround Utilitv Line Relocation Dear Lynn: Thank you for your prompt response to our question as to whether the City of Colleyville has the authority to issue general obligation bonds to finance the incremental costs of relocating utility lines underground in connection with improvements to State Highway 26. The purpose of this letter is to confirm my understanding of our conversation earlier today. Based on the case law, statutes, bond proposition language and other information in my letters to you dated October 22. 2004 and November 1, 2004, and your review of the City Charter for the City of Colleyville, you have made the determination that if the proposed bond election carries and a complete record of proceedings is submitted to your office, you would approve issuance of such bonds without the need or requirement of any other proceeding. I understand that your determination is not to be cited by the City as a formal opinion of your office in any legal challenge to the financing of the proposed utility line relocation project. Thank you again for your assistance in this matter. ~ . Sc aecher cc: Mr. Ed Esquivel 45533824.1 HOUSTON. NEW YORK. WA.SHINGTON DC. AUSTIN. DALLAS. Los ANGELES. MINNEAPOLIS. SAN ANTONIO. HONG KONG. LONDON. MUNICH FULBRIGHT & .JAWORSKI L.L.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE. SUITE 2800 DALLAS. TEXAS 75201-2784 WWW. F U L8 RIG H T . COM GSCHAECH ER@F'ULBRIGHT.COM DIRECT DIAL: (214) 855-8153 TELEPHONE: F'ACSIMILE: (214) 855-8000 (214) 855-8200 November 1 , 2004 Ms, T. Lynn Stuck Assistant Attorney General Chief, Public Finance Division 300 W. 15th Street, 9th Floor Austin, TX 78701 Re: Costs of Underaround Utilitv Line Relocation Dear Lynn: On October 22, 2004, I sent you a letter asking whether the City of Colleyville has the authority to issue general obligation bonds to finance the incremental costs of relocating utility lines underground in connection with improvements to State Highway 26 (also known as Colleyville Boulevard). This letter follows up on several additional points with respect to that question. The Court in State of Texas v. City of Austin, 331 S.W.2d 737 (Tex. 1960), noted that if relocated utility lines were to be placed on right of way which would be owned by the private utility company, the acquisition cost of such right of way would not be properly payable by the State under Article 6674w-4, Vernon's Ann. Tex. Civ. Stat. (now codified in Sections 203.091- 203.095, Texas Transportation Code). Id. at 745-46. The utility lines that the City of Colleyville wishes to relocate underground would be placed in the public right of way and not on right of way owned or to be owned by Oncor. None of the incremental cost to be financed by the City of relocating the utility lines underground would be used to purchase right of way to be owned by Oncor. Regarding the authority of a municipality to finance improvements to the state highway system, Section 222.051 (a) of the Texas Transportation Code provides that a governmental unit which has the authority to build roads such as the City of Colleyville may finance the construction of an approved state highway project. The proposed proposition language regarding the authorization of the City of Colleyville to issue bonds to finance the incremental costs of relocating the utility lines underground is as follows: "SHALL the City Council of the City of Colleyville, Texas, be authorized to issue general obligation bonds of the City in the principal amount of $ for permanent public improvements and public purposes, to wit: street 45533237.1 HOUSTON. NEW YORK. WASHINGTON DC. AUSTIN. DALLAS. Los ANGELES. MINNEAPOLIS. SAN ANTONIO. HONG KONG. LONDON. MUNICH Ms. T. Lynn Stuck November 1, 2004 Page 2 improvements (Colleyville Blvd. utility line relocation, including the acquisition of easements and right-of-way therefor); such bonds to mature serially or otherwise over a period not to exceed FORTY (40) years from their date, to be issued and sold in one or more series at any price or prices and to bear interest at any rate or rates (fixed, floating, variable or otherwise) as shall be determined within the discretion of the City Council at the time of issuance or sale of the bonds; and whether ad valorem taxes shall be levied upon all taxable property in the City sufficient to pay the annual interest and provide a sinking fund to pay the bonds at maturity?" If you have any questions regarding the points addressed in this letter or my October 22"d letter, please call me. The Colleyville City Council is meeting tomorrow evening to discuss whether the City should move forward and include the above-described proposition in a bond election to be called on November 16th or to include other City projects in its place. Any indication of your thoughts on this issue prior to the meeting would be greatly appreciated. Sincerely, cc: Mr. Ed Esquivel 45533237.1 FULBRIGHT & JAWORSKI L.L.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE. SUITE 2800 DALLAS. TEXAS 75201-2784 WWW.FUL8RIGHT.COM GSCHAECHER@F"ULBRIGHT,COM DIRECT DIAL: (214) 855-8153 TELEPHONE: FACSIMIL.E: (214) 855-8000 (214) 855-8200 October 22, 2004 Ms. T. Lynn Stuck Assistant Attorney General Chief, Public Finance Division 300 W. 15th Street, 9th Floor Austin, TX 78701 Re: Costs of Underoround Utilitv Line Relocation Dear Lynn: Ed Esquivel of this office spoke to you recently regarding utility line relocation in connection with a street improvement project for the City of Colleyville. The City, in conjunction with the State, is expanding and reconstructing the portion of State Highway 26 ("SH26") which runs through the City. In connection with that project, overhead electric utility lines owned by ancor, a private corporation, will have to be relocated. The City wants to relocate the overhead utility lines underground. The incremental cost of relocating the utility lines underground above the cost to move them to a new above-ground location is approximately $13.5 million. The City would like to finance this incremental cost through the issuance of general obligation bonds. The City is planning on holding a bond election in February of 2005 and would include the question of issuing bonds for the utility line relocation as a separate proposition in the election. The fact that the utility lines are owned by a private corporation raises the question of whether the payment by the City of the costs to relocate the utility lines underground would be considered an appropriation or donation of public moneys to a corporation in violation of the Texas Constitution. In State of Texas v. City of Austin, 331 S.W.2d 737 (Tex. 1960), Article 6674w-4, Vernon's Ann. Tex. Civ. Stat. (now codified in Sections 203.091-203.095, Texas Transportation Code) was challenged on those grounds. The statute provided that the State of Texas was required to pay the costs of relocating utility facilities necessitated by the improvement of any state highway as part of the national system of interstate and defense highways. The Court in City of Austin stated that in the absence of Article 6674w-4, utility companies would be required to pay the costs to remove facilities located in public rights of way if the relocation was made necessary by highway improvements. However, the Court found that it was within the discretion of the Legislature to provide for payment of relocation costs by the State and that such payment by the State was not unconstitutional as a donation of public moneys to corporations in violation of Article III, Section 51 of the Texas Constitution, or as a gift or loan of credit of the State in violation of Article III, Section 50, or as a release of an obligation 45530145.1 HOUSTON. NEW YORK. WASHINGTON DC. AUSTIN. DAl.LAS . Los ANGELE.S. MINNEAPOLIS. SAN ANTONIO. HONG KONO . LONOON . MUNICH Ms. T. Lynn Stuck October 22, 2004 Page 2 of corporations or individuals in violation of Article III, Section 55, or as an appropriation for private or individual purposes in violation of Article XVI, Section 6. The issue of appropriation or donation of public moneys to a corporation was also addressed in City of Beaumont v. Priddie, 65 S.W.2d 434 (Tex. Civ. App.-Austin 1933), City of Beaumont involved a contract between the City of Beaumont and a railroad company under which the City agreed to pay part of the costs incurred by the railroad to construct underpasses on streets where railroad tracks crossed the street at grade. The Court in City of Beaumont found that a city could compel a railroad company to pay the costs of eliminating grade crossings on public streets where necessary in the interest of public safety.1 However, the court also found that a city, if it so chose, could pay the entire cost itself or apportion it between the city and the railroad company, and that payment of such costs by a city was not unconstitutional as donating public moneys to private corporations or associations in violation of Article XI, Section 3 of the Texas Constitution. See also Barrington v. Cokinos, 338 S.W.2d 133 (Tex. 1960) (citing City of Austin and City of Beaumont, court found payment by city of costs of railroad line relocation did not violate Article XI, Section 3). While the courts in both City of Austin and City of Beaumont found that payment of the above-described costs was constitutional despite the fact that the cities had the power to force the private corporations to pay such costs, based on a recent Texas Public Utility Commission (the "Commission") order it is unclear whether the City of Colleyville would have the ability to force Oncor to pay the incremental costs of relocating their utility lines underground in connection with the SH26 project if the City so desired. On May 9,2003 the Commission issued an order (the "Commission Order") in which they found ordinances enacted by the City of Allen which required electric utility lines to be placed underground to be invalid and void.2 Oncor challenged the ordinances as imposing on Oncor the costs of "non-standard" distribution facilities (meaning underground utility lines versus "standard" above-ground utility lines) and thus requiring Oncor to provide electric services in a manner contrary to tariffs applicable to Oncor, Commission rules and the Public Utilities Regulatory Act of Texas. The Commission, citing its 1986 decision with respect to similar ordinances adopted by the Town of Westlake and the Town of Trophy Club3, agreed with Oncor and found that the City of Allen was without authority to adopt the challenged ordinances. The Commission also stated, again citing its 1986 1 At the time of the City of Beaumont decision, there was no specific legislation on the subject of grade separation in municipalities. The court found that the power of home rule cities such as Beaumont to force a railroad company to pay for grade separation was derived from the provisions of Texas Civil Statutes Article 1175 which confers upon home rule cities "exclusive dominion, control, and jurisdiction in, over and under the public streets...of such city." Currently, Chapter 317 of the Texas Transportation Code provides that cities with populations of over 100,000 may pay the costs of grade separation or for the relocation of railroad lines within the city and may issue tax bonds to finance the costs thereof. 2 Appeal of Oncor (Formerly TXU Electric Delivery Company) From an Ordinance of the City of Allen and Request for Interim Relief, Docket No. 25429 (2002). 3 Application of Texas Utilities Electric Company to Obtain a CCN for the Trophy Club-Coppe/l-Euless 138 kV Transmission Line; Appeals of Brazos Electric Power Cooperative, Inc., Tri-County Electric Cooperative, Inc., and Texas Utilities Electric Company of an Ordinance of the Town of Westlake, Texas; Appeals of Texas Utilities Electric Company and Brazos Electric Power Cooperative, Inc., of an Ordinance of the Town of Trophy Club, Texas, Docket Nos. 6117, 6170, 6171, and 6172,12 P.U.C. BULL. 102 (1986) 45530145.1 Ms. T. Lynn Stuck October 22, 2004 Page 3 decision, that even if a city had the authority to enact such an ordinance, forcing private utility companies to pay the additional costs of non-standard facilities would be against the general public interest and void because: "(1) the total cost was far greater for underground than overhead systems; (2) the ordinances imposed the cost of local benefits statewide; and (3) the reliability of underground systems was lower than overhead systems." Page 5 of Commission Order. We understand that the Commission Order is on appeal at the Third District Court of Appeals of Texas at Austin. It would appear that the City of Colleyville has the authority to issue general obligation bonds to finance the incremental costs of relocating electric utility lines underground. The City would appreciate your views on this issue and whether you have any legal problems with the City's ability to finance such costs with general obligation bonds. Sincerely, C~~.I! ~ cc: Mr. Ed Esquivel 45530145.1