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Home My WebLink About02525 ORD - 05/17/1949AN ORDINANCE ACLTTGW=GING RECEIPT OF NOTICE OF EICRCISE OF OPTION FRW REPUBLIC NATURAL GAS COMPANY; AUTHORIZING PAYMMT UNDER TdE TERMS OF THE CONTRACT AND ORDINANCE DATED JULY 15, 1942, IN THE AMOUNT OF $17,500,00, SAID PA)MENT TO BE MADE OUT OP N0. 106 GAS FUND, GAS DISTRI- BUTION SYSTEM MAINTENANCE OPERATION DIVISION, APPROPRIATION ED-- JUDGMENTS AND DAMAGES; AND DECLARING AN EMERGENCY. WhEREAS, heretofore on the 4th day of August, 1922, W. L. Pearson & Company, a corporation of Houston, Texas, entered into a certain contract in writing with the City of Corpus Christi for the development of a gas well on the south side of Nueces Bay and to sell and to deliver to the City of Corpus Christi a gas line connecting such well with the city limits, as fully appears from the minutes of the City Council of that date; and WHEREAS, said contract between IT. L. Pearson & Company and the City of Gerpus Christi was amended and supplemented by agreement, as evidenced by the resolution of the City Council of the City of Corpus Christi, passed and approved on April 10, 1925; and RICRRAR, said contract was further supplemented by ordinance duly passed of date October 4, 1930; and WHEREAS, said contract, together with its supplements and all rights and liabilities thereunder, was duly and legally assigned to the Republic Natural Gas Company, of date July 1, 1935; and WHEREAS, said contract was farther amended by the terms of the contract and agreement dated July 15, 1912, providing among other things the following: "The Republic Natural Gas Company, in order to permit the City to make the necessary extensions to its trans- portation system by constructing a 7 -inch line from a point near the intersection of the City's 8-inch line and Savage Lane to a point near Baldwin Boulevard and South Staples Street, agrees to supply the City with Thirty -five Thousand Dollars ($35,000) to pay for the cost and installation of said line; the City agrees to issue its notes in the sum of Seventeen Thousand Five Hundred Dollars ($17,500), with interest at the rate of three and one- fourth per cent (3 -) annually, to reimburse the Republic Natural Gas Company for such funds so advanced, that obligation to be secured in legal form. The Republic Natural Gas Company agrees to pay Seven- teen Thousand Five Hundred Dollars ($17,500), or one -half the cost of the improvement, not to exceed Seventeen Thousand Five Hundred Dollars m.7,500) and said payment shall be conditioned only upon the City's continuing to take its entire supply of gas from the Republic Natural Gas Company; if, during the life of the contract, the City elects to take a part of its supply from any other source than the Republic Natural Gan Company, upon the ` exercise of the option provided for in Paragraph 11 thereof by the Republic Natural Gas Company, the City agrees to reimburse the Republic Natural Gas Company for the Seventeen Thousand Five Hundred Dollars ($17,500) so expended by it in the cost of said im- provement, or so much thereof as is expended.' and, the said Republic Natural Gas Company has by written notice exercised its option to terminate its supplemental agreement dated October 4, 1930, and claim the payment of $17,500,00 for the advance on the cost of the construction of the pipe line described in the agreement dated July 15, 1942, which notice is as follows: May 6, 1949 Mr. M. W. Cochran City Manager City of Carpus Christi Corpus Christi, Texas Dear Sirc In view of the fact that the City of Corpus Christi elected to take a portion of its gas supply from the Houston Natural Gas Company, that is, all of its requirement above four million cubic feet a day minimum, which it is under con- tract to purchase from the Republic Natural Gas Company, the Republic Natural Gas Company hereby notifies the City of its election to exercise the option to terminate the supplemental agreement of date, October 4, 1930, and to assert its rights under its original contract of August 4, 1922, as supple- mented on April 10, 1925, and as further modified by Para- graph 12 of the supplement of October 4, 1930, as expressly provided in Paragraph 11 of October 4, 1930, which said supplement of October 4, 1930, in Paragraph 11 thereof, provides that upon the exercise by the Republic of the option to terminate, that the contract of August 4, 1922, as supplemented April 10, 1925, and as modified by Paragraph 12 of the supplement of October 4, 1930, become the active contract. You are therefore notified that we invoke the pro- visions and require that the City recognize its contract to take the minimum of four million -feet per day from the Republic Natural Gas Company and that we be relieved of the other obligations provided for in the supplement of October 4, 1930, and that the City pay for this four million cubic feet at the rate of 7 -112X per thousand for the first two million cubic feet and V per thousand for the second two million cubic feet. We also advise you that in the light of the City's election to take its supply above 4,000 M. C. F. from another source, Houston Natural Gas Company, sad in the light of the exercise of the option on the part of the Republic, notice of which is hereby given you, that we call into effect the pro- visions of Paragraph 3 of the supplemental contract of July 15, 1942, which requires the City to pay the Republic $17,500.00 for the advance on the cost of the construction of the pipe line described therein, and we respectfully demand payment of the sum so due us. Yours very truly, REPUBLIC NATDR&L GAS COMPANY $y /s/ D. A. Howard DAH,/In D. A. Howard, Vice President WHEREAS, it appears from the records that said pipe line was accepted and used by the City of Corpus Christi and said notice of the exercise of said option has now been received; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That there has been received by the City of Corpus Christi the notice of exercise of the option referred to in a contract between the City and Republic Natural Gas Company dated July 15, 1942, - and said notice is here now accepted and received by the City Council of the City of Corpus Christi, Texas. SECTION 2. That final payment due under contract of July 15, 1942, in the sum of $17,500,00 be made in accordance with the terms of such contract and that such payment be made from No. 106 Gas Fund, Gas Distribution System Maintenance Operation Division, Appropriation ED -- Judgments and Damages. SECTION j. The necessity for proceeding to operate the gas dis- tribution system of the City of Corpus Christi under the terms of its con- tract with Houston Natural Gas Corporation as authorized by a vote of qualified voters of the City of Corpus Christi at an Election held Febru- ary 12, 1949, creates a public emergency and public imperative necessity requiring the suspension of the Charter rule that no ordinance or resolution shall be passed finally on the date it is introduced and that such ordinance or resolution shall be read at three several meetings of the City Council, and the ?kyor having declared that such public emergency and imperative necessity exist, and having requested that such Charter rule be suspended, and that this ordinance be passed finally on the date of its introduction and take effect and be in full force and effect from and after its passage, IT IS ACCORDINGLY SO ORDAINED. PASSED AND APPROVED this (1"J day of Hey, A. D. 1949• ATTEST::/] J �. IY City Secretary OvED AS TO LEGAL FORM: City =o rney DAYOR City of Corpus Christi, Texas Corpus Christi, Texas mays. -, 1949 TO THE 14ELMMS OF TEI CITY COMTCIL Corpus Christi, Texas Gentlemen: For the reasons set forth in the emergency clause of the fore- going ordinance, a public emergency and imperative necessity exist for the suspension of the Charter rule or requirement that no ordinance or resolution shall be passed finally on the date it is introduced, and that such ordinance or resolution shall be read at three meetings of the City Council; I, therefore, hereby request that you suspend said Charter rule or requirement and pass this ordinance finally on the date it introduced, or at the present meeting of the City Council. F.espectfully, MYOR City of Corpus Christi, Texas The Charter rule was suspended by the following vote: Leslie W.S. rman nL. Jack DeForrest Barney Cott Barney Cott wyv Sydney E. Herndon George L. Lowman George L. Lovaaan QL11. -fol�lo The above ordinance was passed by the ing vote: Leslie Wasserman 114L - Jack DeForrest (7lAP�j Barney Cott Sydney E. Herndon George L. Lowman a5as