TCAA NEWS
(Volume 3, Issue 10 – November 2008)
“Your Source for Information About the Texas City Attorneys Association”
News and Updates

Speakers needed for TCAA’s 2009 South Padre Conference to be held on June 10-12, 2009: Please submit your ideas by e-mail to shouston@tml.org by December 31, 2008.

Congratulations to New TCAA Board Members: (1) Karen Horner, First Assistant City Attorney, Baytown; and (2) Jonathan Graham, City Attorney, Temple. Also, special thanks to Anita Burgess, City Attorney, Denton, and Diane Wetherbee, City Attorney, Plano, for their outstanding past service on the TCAA Board. For a complete list of board members, please visit www.texascityattorneys.org.

2009 Riley Fletcher Basic Municipal Law Seminar to be held in Austin: The Tenth Annual Riley Fletcher Basic Municipal Law Seminar will be held in Austin on February 13, 2009. Topics will include: (1) types of city government; (2) open government; (3) economic development; (4) ethics for city attorneys; (5) Tort Claims Act; (6) personnel; (7) municipal court; (8) purchasing; and (9) land use. The seminar is great for new city attorneys or those wanting a refresher in the basics! Special thanks to our sponsor:

Akers & Boulware-Wells, L.L.P.

TCAA is “Going Green”! Special note on this and all upcoming seminar materials: TCAA will no longer provide binders for speaker papers or printed materials of any kind. Instead, TCAA will put all speaker papers on the TCAA Web site under “speaker papers” for attendees to download in advance, if they so desire. No written materials (except for late speaker materials) will be provided at the seminar location.

To register for the seminar or for more information, please visit www.texascityattorneys.org.

Congratulations to Fall 2008 TCAA Municipal Certification Recipients:

  • Leonard Schneider, Ross, Banks, May, Cron and Cavin, P.C., Houston
  • Steven Wethered, Ross, Banks, May, Cron and Cavin, P.C., Houston

For more information on TCAA’s municipal certification program, please visit www.texascityattorneys.org.

2008 Fall Conference in San Antonio: The TCAA Fall Conference was held on October 30, 2008, at the Henry B. Gonzalez Convention Center, and was a great success! Special thanks to all of the volunteer speakers and to this year’s conference sponsor, Nichols, Jackson, Dillard, Hager & Smith, L.L.P. Also, thanks to the City of San Antonio and Denton, Navarro, Rocha & Bernal, P.C., for hosting the pre-conference reception in honor of Susan Rocha’s election to the 2008-2009 International Municipal Lawyers Association presidency. Speaker papers are available at www.texascityattorneys.org, under “speaker papers” on the front page.

State Bar of Texas Government Lawyers Section Seeking Members: The Government Lawyers Section is for lawyers who have chosen to work in public service - whether for municipal, state, or federal government - or in private practice representing governmental entities. The section produces timely newsletters that are sent to members via e-mail, maintains a Web site, and helps sponsor seminars. Dues for a one-year membership are only $10.00.

For more information, please contact Section Chair Mick McKamie, or any of the following Section Councilmembers: The Honorable Eric M. Shepperd, Immediate Past Chair; Judy Speer-Gamino, Chair-Elect; Lita Gonzalez, Treasurer; Carolyn Moore, Secretary; Laura McElroy, Newsletter; Penny A. Wilkov; Leah Hayes; Julie Fort; Art Pertile; Karen Kennard; Bryan Case; Joan Marshall; or The Honorable Roberta Lloyd.

Eighty-First Legislative Session Begins Soon: Pre-filing of bills has already begun. Keep current by reviewing the Texas Municipal League’s Legislative Update, which includes a short summary of most city-related legislation that is filed, as well as articles and other updates on items of interest. View the update at www.tml.org by clicking on “Legislative.”

Municipal Attorney Job Openings: For the most recent Texas Municipal League classifieds postings, please click here.

TML/TCAA Legal Defense Program
Amicus Brief, Attorney General Opinion, and State Agency Comments Filed

Annexation: RQ-0745-GA; Whether a municipality engaged in the process of annexing territory may use Section 43.052(h)(1), Local Government Code, under various circumstances. This request asks, among other things, whether Section 43.052(h)(1) of the Texas Local Government Code [the “100 tracts exemption”] can be used by a city engaged in an annexation process even if there is not a residence on each tract in the area proposed for annexation. TML and TCAA argued that the 100 tracts exemption provides that an area is exempt from the annexation plan requirement if it has any number of tracts, so long as a residential dwelling is located on no more than 99 of the tracts.

Recent Texas Cases of Interest to Cities
Note: Included cases are from the period beginning on the 10th of the previous month through the 10th of the current month.

PODER v. City of Austin, No. 03-08-00226-CV (Tex. App.—Austin, October 16, 2008). At issue in this case was the ability of the City of Austin to relocate the city animal shelter from Central Austin to East Austin. People Organized in the Defense of the Earth and her Resources (PODER) challenged the relocation of the shelter, and the trial court granted summary judgment in favor of the city. PODER appealed the decision of the trial court on several grounds, including: (1) the Austin city charter requires that the relocation of the animal shelter be included in the Austin Tomorrow Comprehensive Plan, which it was not; and (2) the city council took action on the relocation without including the action in a meeting notice and minutes in violation of the Texas Open Meetings Act.

PODER relied on language in Article X of the charter to argue that in order to relocate the animal shelter, the city is required to include the project in its comprehensive plan. Among other things, the charter provides that the “comprehensive plan shall contain the council’s policies for growth, development and beautification of the land within the corporate limits and the extrajudicial jurisdiction of the city[.]” The court held that the plain language of the charter does not require the city to list specific public facilities projects in the plan, but instead requires that the plan must include general policies for these types of projects, and also requires for the projects to be consistent with the plan. Because the comprehensive plan contains a “general statement of policies” for future growth and development, the court determined that those polices sufficiently conformed to the relevant charter provision.

Arguing that the animal shelter’s relocation is inconsistent with the comprehensive plan, PODER pointed to the fact that the neighborhood plan for the Johnston Terrace neighborhood (the neighborhood of the future shelter location) does not include any mention of the animal shelter as a proposed use of land within the neighborhood. The neighborhood plan contains certain proposed uses that are expressly stated as “suggestions” for future uses of the tract of land where the proposed shelter would be located. The court determined, however, that the suggestions in the neighborhood plan do not support any intent to bind the city into developing and using the land only in a manner suggested by those in the neighborhood. As a result, the court determined that the neighborhood plan need not suggest that the parcel of land be used specifically for an animal shelter in order for the city to use it in that manner.

PODER also contended that it put forth sufficient summary judgment evidence that the city council violated the Open Meetings Act by making a “secret decision” to authorize relocating the animal shelter at a March 8, 2007, meeting without adequate notice. Because of certain e-mail correspondence received by PODER from the city manager in the months following the meeting, as well as the city manager’s action to proceed with an RFQ for the project, PODER claimed that a decision to relocate the shelter was made at the meeting. The agenda for the March 8, 2007, meeting reflected a discussion to apportion funds for the “design and engineering” of an animal shelter. The city argued that the vote to relocate the animal shelter actually took place at an October 11, 2007, meeting. The court held that, viewing the evidence in the light most favorable to PODER, statements in the city manager’s e-mails and the initiation of the RFQ may indicate that the city manager was confused about the council’s direction, but is not evidence that the city council took any unauthorized action at the March 8, 2007, meeting. As a result, the trial court did not err in granting summary judgment in favor of the city for the Open Meetings Act claim.

Utility Rates: City of Dallas v. Railroad Comm’n and Atmos Energy Corp., as successor by merger to TXU Gas Co., No. 03-06-00580-CV (Tex. App.—Austin Nov. 6, 2008) (mem. op.). The City of Dallas (city) appealed a decision of the Texas Railroad Commission (commission) that TXU rates would be the same throughout the state, with no differentiation between the rates of Dallas metropolitan customers and those in other areas.

The Gas Utility Regulatory Act (GURA) regulates gas rate setting in Texas because of the unique monopolistic quality of gas utilities. TEX. UTIL. CODE. § 101.002. Under GURA, the commission has exclusive original jurisdiction over the rates and services of gas utilities that distribute gas in areas outside a city, and individual cities generally have exclusive original jurisdiction over distribution rates within the city boundaries unless surrendered to the commission by the city. Id. §§ 102.001(a), 102.002(b), 103.001, 103.003.

Under GURA, a gas utility may charge customers only the rates set forth on schedules filed with each regulatory authority – either the commission, the city, or both. See id. §§ 102.151, 104.002, 104.005. A gas utility that desires to raise its rates must file a statement with the regulatory authority having original jurisdiction over those rates before such an increase can go into effect. Id. § 104.102(a) & (b). The statement must include proposed revisions of tariffs and schedules and “a detailed statement” of each proposed increase, the effect the proposed increase is expected to have on the utility’s revenues, and each class and number of utility consumers affected. Id. § 104.102(c). The utility must also publish notice to the public of the proposed increase. Id. § 104.103(a)(1).

TXU filed a statement of intent to change its rates over its entire system in Texas with the commission, and sought approval of new statewide rates applicable to all of its customers. TXU then sent that same statement to the cities that had authority over its rates. The cities with rate authority gave a variety of responses to TXU, and TXU responded to every city’s response by appealing the case to the commission. The commission consolidated all of the cases, and then approved the statewide ratemaking.

The city appealed the commission’s order allowing the statewide rates based on three issues. First, it argued that the commission failed to make adequate findings in support of its decision to impose statewide rates. Second, it contended that TXU’s published notice of its proposed statewide rate change was misleading and defective as to its impact on Dallas area customers. Finally, the city argued that the commission never acquired jurisdiction over TXU’s rates in numerous cities within its service area, which made the statewide rates invalid.

The court of appeals held for TXU on all three issues. It held that the commission had a reasonable basis for approving statewide rates, notwithstanding the city’s evidence of the service costs within the Dallas area. It also held that the commission’s construction of the notice statute was reasonable as to TXU’s published notice to TXU’s customers. Finally, the court held that the commission had jurisdiction over the case because any party may appeal a rate proceeding, not just a party who receives an unfavorable result under GURA Section 103.051.

Unemployment Compensation: Tex. Workforce Comm’n v. The City of Houston, No. 01-07-01100-CV (Tex. App. Houston [1st Dist.] Oct. 23, 2008). Because there is substantial evidence that the employee’s non-completion of training was not misconduct, the Texas Workforce Commission’s decision to allow unemployment compensation was affirmed by the court of appeals.

Civil Service: City of Temple v. Steven Taylor, No. 03-07-00630-CV (Tex. App.—Austin Oct. 16, 2008). The Civil Service Act back pay awards are designed to put the employee back in the same position as if the incorrect suspension or termination had never occurred. Thus, pay from another source while on suspension could be subtracted from an officer’s back pay award.

Sovereign Immunity-Tort: City of Midlothian v. Letha Black, No. 10-08-00038-CV (Tex. App.—Waco Nov. 5, 2008). The court of appeals held that Section 11.086 of the Water Code does not expressly waive a city’s immunity from suit. Thus, the city was not liable for damage done to a landowner’s driveway after the city approved a neighbor’s detention pond.

Taking: State of Texas and City of Rosenberg v. Badruddin Bhalesha and Samina Bhalesha, No. 14-08-00098-CV (Tex. App.—Houston Nov. 6, 2008). The court of appeals held that there was no compensable taking from impairment of access to a business because a total lack of access is required before there is a compensable taking.

Sign Regulation: RTM Media, L.L.C. v. The City of Houston, Civil Case No. 4:07-cv-2944 (S.D. Tex. Sept. 29, 2008) (mem. op. and order). After initially granting a preliminary injunction for the sign company, the district court held that the city’s amortization program had produced a significant decline in the number of billboards in the city, and therefore its differentiation between commercial and noncommercial signs had a rational basis and is constitutional.

Attorney General Opinions of Interest to Cities
Note: Included opinions are from the period beginning on the 10th of the previous month through the 10th of the current month.

Opinion No. GA-0673 (Public Information Act): concludes that Government Code Section 552.130(a) does not prohibit a governmental body from publicly disclosing a manufacturer's permanent vehicle identification number (VIN), if the VIN is not accompanied by or identified with any personal information about any individual.

Opinion No. GA-0673 (Public Information Act): concludes that tax appraisal districts must use the schedule of disability ratings and corresponding maximum property tax exemption amounts for disabled veterans provided in Article VIII, Section 2(b), of the Texas Constitution instead of those set out in Tax Code Section 11.22(a).

Opinion No. GA-0682 (Hotel Occupancy Tax): concludes that Tax Code Section 352.1015(c) allows hotel occupancy tax revenue to be expended for administrative costs only if they are incurred directly for the promotion and servicing expenditures authorized by the provision applicable to the particular county, and the expenditure is otherwise consistent with Chapter 352 of the code. Whether expenditures for "key person insurance" premiums constitute an authorized administrative cost is for the commissioners court to determine in the first instance, subject to judicial review.

You can view attorney general opinions at www.oag.state.tx.us. On the same site, you can also sign up to receive e-mail updates of opinion requests and newly released opinions.

As a supplement to TCAA News, please check the TML Legislative Update Newsletter and TML’s Connect News Service .
Please contact Scott Houston, TCAA General Counsel, with your news, questions, and/or comments by e-mail at legalgovt@tml.org or by phone at 512-231-7400.
TCAA members may use the information herein for any purpose. No other person may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas City Attorneys Association.
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