Ordinance No. 682ORDINANCE _NO._
AN ORDINANCE RECITING THE CONTROVERSY BETWEEN THE
CITY OF BAYTOWN AND HARRIS COUNTY EASTER OAKS WATER
AND SEWER DISTRICT OVER OWNERSHIP OF WATER PROPER-
TIES FORMERLY OWNED BY HARRIS COUNTY WATER CONTROL
AND IMPROVEMENT DISTRICT NO. 58, FUNDS ON DEPOSIT
IN THE NAME OF SUCH DISTRICT, AND MANAGEMENT FEES
ATTRIBUTABLE TO SUCH WATER PROPERTIES, FINDING THAT
SUCH WATER SYSTEM IS NOT A PORTION OF THE CITY OF
BAYTOWN'S WATER WORKS SYSTEM OR NECESSARY FOR OPERA-
TION OF THE CITY'S SYSTEM, ACCEPTING AN OFFER OF
COMPROMISE AND SETTLEMENT OF SUCH CONTROVERSY, AND
AUTHORIZING DISCLAIMER OF THE CITY`S INTEREST TO
SUCH CONTROVERTED WATER SYSTEM IN PENDING LAWSUIT
AND QUITCLAIM DEED TO SUCH WATER PROPERTIES.
WHEREAS, by Ordinance No. 627 as amended by Ordinance No. 627 -A enacted
by the City of Baytown on November 29, 1962, the City of Baytown annexed all of
the territory of Harris County Water Control and Improvement District No. 58 and
took over all of the properties, assets, debts, liabilities, and obligations of
such district including a complete water system hereinafter called "North Hous-
ton Water System" situated partly in and partly adjacent to the City of Houston,
Texas, and lying some fifteen (15) miles or more from the City of Baytown, Texas,
which North Houston Water System is not in any way physically connected with the
other water properties of the City of Baytown either before or after the date of
enacting the aforesaid ordinance; and
WHEREAS, on November 29, 1962, the aforesaid North Houston Water System IuaE
subject to, and the City of Baytown acquired such property subject to: Indenture
of Mortgage and Deed of Trust dated December 1, 1956, executed by Lone Star Water
Co. to Bert H. Tunks, Trustee; Trust Agreement and Declaration of Trust dated
December 21, 1956, between C. F. Alexander et al as donors and Jerry H. Birdi,<e].?.,
Sr., Trustee; and Operating Agreement dated December 26, 1956, between Lone St<.3r
Water Co, and Harris County Water Control and Improvement District No. 58, vihlscl?
Operating Agreement provided in part in Sections 6 and 7 (f) as follows:
Section 6
"All rights of the District to * ** retain such properties and assets if thereto-
fore transferred to the District, shall be terminated and shall cease to exist
upon the happening of any one or more of the following events * ** (2) the writ-
ten opinion of counsel for the Trustee holding stock of the Water Company (which
opinion shall be sent by registered mail to the President of the District by the
Trustee) to the effect that the District may not legally own, or to the effect
that the District may not legally operate said System."
Section 7 M
"That in the event the District's right to own and /or to operate the properties
constituting said Water System shall be terminated and shall cease to exist as
provided in Section 6 hereof, and if the District shall have taken title and /or
possession of said Water System pursuant to Section 5 hereof * ** the District
shall forthwith transfer and convey back to the Water Company and /or to a new
Beneficiary designated by the Trustee, as the case may be, the title and /or pos-
session of said System."
and
WHEREAS, pursuant to the terms of said Operating Agreement, opinion of
counsel for Trustee, dated December 12, 1%2, that the said Harris County Water
Control and Improvement District No. 58 may not legally own and may not legally
operate said system was sent by registered mail on December 12, 1962, to the Presi
dent of such district, and the Trustee, by instrument dated December 21, 1962,
designated Harris County Eastex Oaks Water and Sewer District of Harris County,
Texas, as substitute beneficiary under the terms of the aforesaid instruments
and by deed dated January 11, 1%3, Lone Star Water Co. conveyed all properties
of the North Houston Water System to the said Harris County Eastex Oaks Water
and Sewer District; and
WHEREAS, a controversy has arisin whereby the City of Baytown and the said
Harris County Eastex Oaks Water and Sewer District are both claiming ownership
of the said North Houston Water System and of the funds on deposit in the name
of Harris County Water Control and Improvement District No. 58 in the First City
National Bank of Houston, Texas, and the City of Baytown claims unpaid compensa-
tion in the amount of $35,250.00 due said District No. 58 for operation of the
North Houston Water System incurred prior to annexation and abolishment of sail
District No. 58 by City of Baytown on November 29, 1962; and,
WHEREAS, Harris County Eastex Oaks Water and Sewer District, as successor
to Harris County Water Control and Improvement District No. 58, has filed in
Cause No. 532,167 in the 151st District Court of Harris County, Texas, a motion
requesting that working capital and escrow funds of the North Houston Water
System on deposit in First City National Bank of Houston, be turned over to 1.110
said Harris County Eastex Oaks Water and Sewer District, and the City of Baytown,
has been named a party to such proceeding; and,
WHEREAS, Harris County Eastex Oaks Water and Sewer District has offered to
pay the City of Baytown the sum of $35,250.00 to be paid from said escrow funds
when available for use by Harris County Eastex Oaks Water and Sewer District, in
complete settlement of all controversies and matters between them under the terms
of which settlement the City of Baytown would recognize ownership of such system
In said Harris County Eastex Oaks Water and Sewer District; and,
WHEREAS, it is in the best interests of the City of Baytown and the in-
habitants thereof to accept such settlement; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN:
Section 1: The City Council of the City of Baytown hereby declares that
the North Houston Water System is not part of the City of Baytown's water works
system nor is the same necessary for operation of the City's water works system.
Section 2: That the City of Baytown, Texas, accept the offer of compromise
and settlement heretofore made by Harris County Eastex Oaks Water and Sewer Dis-
trict and accept accrued and unpaid operating expense due Harris County Water
Control and Improvement District No. 58 in the amount of $35,250.00 incurred
prior to City of Baytown's annexation and abolishment of said District No. 58 on
November 29, 1962, payable to the City of Baytown in cash as an operating expense
out of water revenues of the North Houston Water System, and that the City of
Baytown relinquish all its claim of ownership and interest in the North Houston
Water System, the operating funds thereof on deposit in First City National Bank
of Houston, Texas, and all funds held in escrow in the First City National Hank
of Houston, Texas, pursuant to Order dated April 18, 1960, of the District Court
of Harris County, Texas, on Application For Supersedas Bond in Cause No. 532,167
styled Harris County Water Control and Improvement District No. 58 vs. City of
Houston.
Section 3: That the City Attorney of Baytown, Texas, be authorized and
instructed to disclaim all right, title, and interest of the City of Baytown,
Texas, in and to the North Houston Water System, more specifically described in
deed dated January 11, 1963, and recorded in Vol. 4696, Page 42.3 of the Deed
Records of Harris County, Texas, from Lone Star Water Co. to Harris County Easte }_
Oaks Water and Sewer District and Specifically disclaim all of the City of Bay -
town's right, title and interest in and to said funds on deposit in the name of
Harris County Water Control and Improvement District No. 58 in the First City
National Bank of Houston, Texas, agree that such funds on deposit be paid to
Harris County Eastex Oaks Water and Sewer District, successor to, substitute bene-
ficiary, and owner and operator of the North Houston Water System, and file such
Disclaimer as an answer to the motion pending in Cause No. 532,167 in the 151st
District Court of Harris County, Texas, styled Harris County Eastex Oaks Water
and Sewer District, successors to Harris County Water Control and Improvement
District No. 58 vs. City of Houston.
Section 4: Upon receipt of the sum of $35,250.00 by the City of Baytown,
the City Manager is authorized and directed to execute and deliver, and the City
Clerk to attest, a quitclaim deed from the City of Baytown, Texas, to Harris
County Eastex Oaks Water and Sewer District conveying all the right, title, and
interest of the City of Baytown in and to the North Houston Water System, more
specifically described in deed dated January 11, 1963, and recorded in Vol. 4896,
Page 423 of the Deed Records of Harris County, Texas, from lone Star Water Co.
to Harris County Eastex Oaks Water and Sewer District.
Section 5: If any provision, section, paragraph, sentence, clause, or
phrase of this ordinance shall for any reason be held unconstitutional, void,
or invalid, such invalidity shall not affect the validity of the remaining pro-
visions of this ordinance.
Section _6: This ordinance shall be effective upon passage.
INTRODUCED, READ and PASSED by the affirmative vote of a majority of the
City Council of the City of Baytown on this the 8th day of May, 1963.
D . C. L. (Lee) iggeit, Mayor
ATTEST:
Edna Oliver, City Clerk
APPROVED:
George Chandler, City Attorney