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HomeMy WebLinkAboutC2005-278 - 4/12/2005 - ApprovedSET'fLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (this "Agreement") is made by and between the City of Corpus Christi, a Texas home-role city, ("Ctty") and Valero Refining - Texas, L.P. ("Company"). Recitals Company owns or operates pipelines that have occupied property subject t~ public fights- of-way within City's boundaries for many years. On November 16, 2004, City adopted Ordinance No. 026023 (the "Ordinance"), which provided an annual charge for pipelines located in such rights-of-way. City and Company disagree as to City's authority to impose charges as provided in the Ordinance. On November 17, 2004, City filed a declaratory judgment action in the District Court in Nueces County, Texas, styled City of Corpus Christi v. Air Liquide, et al., Cause No. 04-06556- A (the "Lawsuit'S. City and Company have had a mutually-beneficial relationship for many years and want to resolve certain issues between them w/thout the time and expense of litigation. Agreement In consideration for the mutual obligations herein provided, City and Company agree as follows: 1. Term. This Agreement extends for a t~Jm commencing January 1, 2005, and expiring at midnight on December 31, 2014, unless sooner terminated in accordance w/th its terms. 2. Payments. (a) Amounts. Company shall pay the sum of $68,000 to City mmually on or before each March 31, be~nning in 2006 and ending in 2014, or 30 days after invoice by City, whichever is later, in addition to license fees payable under the license referred to in paragraph (b)(iiO of this Section. (b) Conditions. The obligation of Company to make the annual payments described in this Section 4 shall be subject to the conditions precedent that: (i) Dismissal: City shall have dismissed the Lawsuit against all defendants named therein; Valero Refining 2005-278 04/12/05 Ord026217 (ii) Ordinance: City Council shall have adopted an ordinance in the form and to the effect appended hereto as Exhibit ,4, amending and restating the provisions of the Code of Ordinances of City enacted or amended by the Ordinance; and (iii) License: City shall have issued a license to Company in accordance with the ordinance to be enacted pursuant to paragraph (b)(iO of this Section, if Company shall have applied for such license in accordance with such ordinance by July 1, 2005. In addition, the obhgation of Company to make such annual payments shall terminate, unless otherwise agreed by Company in writing, if: (iv) Ordinance Amendment: City amends the ordinance described in paragraph (b)(ii) of this Section without the written consenl of Company; or (v) License Termination: City terminates thc license described in paragraph (b)(iii) of this Section without the written consent of Company. If legislation is enacted (or an unappealable appellate decision is rendered) that either (A) resolves the parties' dispute as to whether City has the legal fight to raise net revenues via a pipeline ordinance or (B) resolves the parties' dispute as to the nature or scope of what is the lawful charge that home rule cities may impose for the use of city stre~ by pipelines, or (C) oth~rise limits the annual charges that may be assessed for the license described in this Section to an amount that is less than the annual amount payable under such license plus the annual amount payable under this Agreement, then the annual payments described in this Section, together with the payments payable under the hcense described In aris Section, shall be renegotiated in good faith by City and Company to be fully consist*nt with any such new legislation or binding decision and, absent agreement, Company's obligation to make annual payments hereunder shall terminate on the second anniversary of the enactment of such legislation or rendering of such decision, as applicable; provided, however, that unless City and Company otherwise agree, Company shall in any event make all annual payments due under this Section 2 on or before March 31, 2009, unless any condition described in paragraphs b(i), (b)(iO, or (b)(iiO of this Section has not been satisfied or Company's obligation to make such payments has been terminated pursuant to paragraph (b)(iv) or (b)(v) of this Section. (c) Use. City shall expend such annual payments by Company only for economic development programs currently funded by City, other economic development programs, and emergency planning and response activities, including, but not limited to, training, equipment, record collection, and coordination of responding entitle; provided, however, if revenue attributable to a particular City-owned property, such as airport prop~3~, is legally limited to certain uses, use of that revenue shall be so bruited. The City Manager of City shall, 30 days prior to submission of his annual budget recommendation to City Council, advise Company in writing of his recommended use of the annual payment, and he shall, at Company's request, meet with Company and consider any alternative proposal for use of such annual payment it might make. (d) Late Payments. Late payments will accrue interest fi-om the due date to the date payment is received by City at the rate of tkree percent (3%) over the per annum rate of 2 455~2022.2 interest announced as the "Prime Rate" for commercial loans as published in the Wall Street Journal or equivalent, as selected by City's Director, Engineering Services, or his designee (or other City officer designated by City's City Manager), as of January 1 of each year, or the max/mum lawful rate permitted by applicable law, whichever is less. (e) Economic Development. City recognizes Company's contribution to the economic health of the Corpus Christi area_ In entering this Agreement, the City Council finds that Company makes significant contributions to employment and busine~ activity in the Corpus Christi area, and that this Agreement will promote local economic development, and declares that this Agreement and the license referred to in Section 2(b)(iii) hereof are part o£ City's program of economic development pursuant to Section 380.001 of the Texas Local Government Code. 3. Release of Claims. City hereby releases any claims it may have against Company and Valero Logistics Operations, L.P. for payments related to past occupancy of pubhc rights-of-way within City boundaries or City-owned property by Company's pipelines; provided, however, this release shall become null and void if Company fails to make in full any of the annual payments due and payable pursuant to Sectton 2 hereof prior to termination of the Company's obligation to make such payments, and in such event all of City's valid claims, if any, shall be automatically reinstated, and Company's annual payments hereunder shall be applied to satisfy any such claimspro tanto. 4. Dismissal of Lawsuit. Promptly alter final approval and execution of this Agreement by both parties, City will cause the Lawsuit agatnst Company and Valero Logistics Operations. L.P. to be dismissed as moot. Promptly after final approval and execution by Air Liquide Large Industries U.S. LP, Citgo Refining and Chemicals Company L.P., Enterprise GTM Holdings, L.P., Equistar Chemicals, L.P., and Flint Hills Resources, L.P., of substantially similar agreements (except that annual payments by Enterprise GTM Holdings, L.P. ~hall be in the sum orS110,000), City shall cause the Lawsuit to be dismissed against all defendants named in the Lawsuit. 5. Legislation. City shall not oppose, directly or indirectly, enactment of the Senate Natural Resources Committee substitute for Senate Bill 480, introduced by Senator Hinojosa in the pending regular session of the Texas Legislatm'e, or any companion bill ialxoduced in the House of Representatives of the Texas Legislature, and shall lake all action reasonably requested by Company to support passage of such legislation. 6. Assignment. This Agreement shall be personal to Company. However, Company may assign tins Agreement to other entities, provided that, prior to the assigrunent, it fi~t obtains the City Council's written consent to the assi~ment. City may not unreasonably withhold consent to Company's request to assign tiffs Agreement. In the event of any assignment of this Agreement to a third party, all of the benefits and obligations created by this Agreement will inure to the benefit of and become binding upon the assignee, and Company shall be released fi.om any further obligation hereunder. Notwithstanding any of the foregoing, Company may assign its interest in this Agreement to any affiliate of Company without the prior written consent of City, but such assignment may not relieve Company or' any of its obligations or liabilitie~ under this Agreement, whether accrued or unaccrued. 3 7. Noflee~. All notices required or permitted by the trnus of this Agreement are deemed sufficient if given by personal delivery, or facsimile, or by prepaid, certified mail and addressed to each party as follows: Notice to City: City Manager City of Corpus Christi P.O. Box 9277 Corpus Christi, Texas 78469-9277 Telephone: (361) 880-3220 Facsimile: (361) 880-3839 For overnight delivery: 1201 Leopard Street Corpus Christi, Texas 78401 or to any other address designated in writing by City to Company. Notice to Company: Legal Dept. - Environmental & Regulatory Affairs Valero Energy Corporation P.O. Box 696000 San Antonio, Texas 782669-6000 Telephone: (210) 345-2000 Facsimile: (210) 353-8363 mad Director of Human Resources & Public Affairs Valero Corpus Christi Refinery P.O. Box 9370 Corpus Christi, Texas 78469-9370 Telephone: (361) 289-6000 or to any other address designated in writing by Company to City. 8. Applicable Law. This Agreement must be construed under and in accordance with the laws of the State or Texas, and all obligations of the parties created under this Agreement are performable within the incorporated limits of City of Corpus Christi, Texas. 9. Venue. Venue for any cause of action brought under this Agreement shall be the federal or State courts of competent jurisdiction in Nueces County, Texas, unless Texas law requires a matter to be submitted to a particular regulatory body or court outside Nueces County. 10. Attorney Fees In the event either party brings any action under this Agreement alleging that the other party to this Agreement has defaulted on or breached obligalious crealed by this Agn:ement, the party who prevails is entitled to recover its reasonable attorneys' fees from the losing party. 4 45592022.2 11. Waiver. Failure of either party to require the performance of any t~,m in this Agreemc'nt or the waiver by either party of any breach of this Agreement does not prevent subaequent enforcement of such term and is not deemed a waiver of any subsequent breach. The recitation of specific t~medies in this Agreement does not waive the right of either party to other remedies available at law or equity to enforce this Agreement. 12. Relationship of Parties. This Agreement may not be construed to create between City and Company a relationship of partnership, joint venture, principal and agent, or any similar relationship, nor may it be const~-ued to be for the benefit of any third party other than City and Company and Valero Log/sties Operations, L.P. 13. Captions. The captions contained in this Agreement ar~ for convenience only and in no way limit or enlarge the terms and conditions of the Agreement. 14. Severabillty. If for any reason any section, subdivision, clause, ptxmse, word or provision of this Agreement shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction after all appeals, if any, it shall not affect any other section, subdivision, clause, phrase, word or provision of this Agreement, for it is the definite intent of the parties that every section, subdivision, clause, phrase or word or provision hereof be given full, rome and effect for its purpose. 15. Entire Agreement. This Agreement constitutes the entire Agreement between City and Company as to the issues between City and Company raised in the Lawsuit and any prior uae of public rights-of-way within the City and City-ow'ned p~ by Company for its pipelines. I]q ~l I'iNrESS WHEREOF, the parties have caused this Agreement to be duly authorized, executed, and delivered as of the last date of execution specified below. CITY OF C~USCIIRISTI, TEXAS By: . l~/l~Iv~na~er"- -- VALERO REFINING - TEXAS, L.P. By: Valero Corporate S~wices Company Its , Partner D-ennis L. Payne, Vice lh'~sident 5 A'Fi-EST: Armando Chapa City Secretary APPROVED AS TO FORM: Mary ~ay FiC'cher City Attorney 6