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December 8, 2025 REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NEDERLAND 5:30 p.m. December 8,2025 1. MEETING The meeting was called to order at 5:30 p.m. by Mayor Darby at the Nederland City Office Building,207 N. 12th Street,Nederland, Texas. See attached for quorum. The following statement was posted: "PURSUANT TO SECTION 30.07, PENAL CODE (TRESPASS BY LICENSE HOLDER WITH AN OPENLY CARRIED HANDGUN), A PERSON LICENSED UNDER SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE (HANDGUN LICENSING LAW), MAY NOT ENTER THIS PROPERTY WITH A HANDGUN THAT IS CARRIED OPENLY." 2. INVOCATION AND PLEDGES OF ALLEGIANCE The invocation and Pledges of Allegiance were led by Councilmember Sonnier. 3. CITIZEN COMMENTS Chief Rod Carroll provided an update on a recent aggravated kidnapping case that demonstrated the effectiveness of the city's real-time crime center and Flock camera system. Carroll detailed the timeline of events and explained how technology assisted in the rapid resolution. The case was resolved within approximately one hour and ten for_ minutes,with the child recovered safely,the vehicle located, and the suspect in custody. The Chief emphasized the importance of technology in modern policing. Mayor Darby provided an update on the November 18th visit from a delegation from the Netherlands, including the deputy mayor from Rotterdam. The meeting was greatly delayed due to travel issues. Despite the delay,the meeting was successful, with discussions about similarities between the ports and industrial facilities of both regions. 4. CONSENT AGENDA - All consent agenda items listed are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a councilmember so requests, in which event the item will be removed from the Consent Agenda and considered separately. A motion was made by Councilmember Duplant and seconded by Councilmember Sonnier to approve the Consent Agenda Item"a" as presented. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. a. Minutes—November 17, 2025 special meeting Minutes continued, December 8, 2025 5. REGULAR AGENDA NEW BUSINESS a. Mayor Darby presented a proclamation recognizing Cheryl Dowden for her service as Interim City Manager. Interim City Manager Bruce Mills added his appreciation for the transition assistance. b. Kay DeCuir,Nederland EDC Executive Director,presented a comprehensive update on current projects and achievements. Ms. DeCuir reported significant growth in sales tax revenue. Key accomplishments included: • 19 new businesses brought to Nederland in fiscal year 2024-25 • $348,364.19 awarded to local small businesses in business incentives • $20,000 grant awarded for job creation from North Texas Community Economic Development Center • Fifth year of fall concerts with 100% sponsorship coverage • 10th annual fall market with approximately 125 vendors The EDC has approximately $7 million in diversified funds,with specific allocations including $500,000 restricted for business incentives annually and$750,000 for disaster recovery. c. Kay DeCuir Nederland EDC Executive Director, discussed the partnership between Nederland EDC, Workforce Solutions Southeast Texas, and Associated Builders and Contractors of Southeast Texas (ABC SETX)regarding a$75,000 matching funds commitment for heavy equipment training simulators. Shandy from ABC SETX stated there will be an annual student total of 16 individuals to be trained. The students would receive NCCER credentials which is nationally accredited. Mark Duran, Deputy Director for Workforce Solutions Southeast Texas,provided employment data, stating Southeast Texas has 1,542 that are currently employed in this occupation. The program would provide the City of Nederland with four years of free heavy equipment training and add three additional scholarships for Nederland ISD graduates. d. A motion was made by Councilmember Duplant and seconded by Councilmember Sonnier to approve payment of$50,000 to Samaritan Counseling Center of Southeast Texas for the Nederland High School wellness Screening Program from the city's general fund. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier, and Ortiz. NOES: None. 2 Minutes continued, December 8, 2025 Interim City Manager Mills explained this was for services already rendered. Robin McCutcheon,President CEO of Samaritan Counseling Center, clarified the scope of services, stating this program provides mental health services for the school district. Dr. Stephen Beagle,Nederland ISD Superintendent, stated this is another layer of support for our students and has been a tremendous asset to them. e. Steve Jordan from Schaumburg and Polk provided an update on the smoke testing project. The scope included testing 414,000 linear feet of sewer lines and inspecting 1,414 manholes,resulting in 2,455 defects found- 872 on the municipal side and 1,583 on private service connections. Jordan stated the report should be completed in April. The city will be reviewing a project which will include an interactive GIS mapping system where users can click on manholes and leaks to view detailed information and photographs. f. A motion was made by Councilmember Sonnier and seconded by Councilmember Jones to amend Ord. 107 — installation of stop signs at intersections. MOTION CARRIED. AYES: Mayor Darby, Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. g. Police Chief Rod Carroll recommended postponing Item 5.g regarding Resolution 2025-21, authorizing the Nederland Police Department to participate in a Mutual-Aid Agreement with the City of Groves and City of Port Neches until January 12, 2026 due to the pending approval by City of Port Neches. The item was moved to the January 12, 2026 agenda without objection. h. A motion was made by Councilmember Jones and seconded by Mayor Pro Tem Ortiz to approve Ord. No. 2025-24, authorizing the settlement of Texas Gas Service Company. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. i. A motion was made by Councilmember Sonnier and seconded by Councilmember Duplant to approve the purchase of Hydra Stop insertion valves from JZ Southern Boys Services in the total overall cost of$47,500 for Public Works Department. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. j. A motion was made by Councilmember Jones and seconded by Mayor Pro Tem Ortiz to approve the purchase of excavator, trailer and 2024 Caterpillar double wheel roller in the amount of$132,000 for Public Works Department. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. 3 Minutes continued, December 8, 2025 k. A motion was made by Councilmember Sonnier and seconded by Mayor Pro Tern Ortiz to approve an amendment to the contract with Griffith, Mosely, Johnson & Associates for grant administration services for Hurricane Harvey grant funds and final payment of $13,627.66. MOTION CARRIED. AYES: Mayor Darby, Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. Interim City Manager Bruce Mills stated the contract has been amended to include some additional funding for the completed grant administration use provided for the street improvement project. The initial contract amount was $248,528.66 which has been amended to $254,528.66 for an increase of$6,000. Vivian Ballou from GMJ explained the additional $6,000 was required by GLO to do the street improvement projects and included an environmental re-evaluation. 6. EXECUTIVE SESSION The regular meeting was recessed at 7:05 p.m. by Mayor Darby for the purpose of conducting an Executive Session as authorized by Texas Government Code, Consultation with Attorney,pursuant to Section 551.071 of the Texas Government Code,regarding pending or contemplated litigation, a settlement offer, and/or on a matter in which the duty of the attorney to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Texas Government Code; Personnel Matters,pursuant to Section 551.074 of the Texas Government Code,to deliberate the appointment, employment, evaluation,reassignment, duties, discipline or dismissal of a public officer or employee,regarding the City Manager. 7. RECONVENE The regular meeting was reconvened at 7:56 p.m. by Mayor Darby. 8. A motion was made by Councilmember Sonnier and seconded by Councilmember Jones to employ Clear Career Professionals as the search firm for City Manager, pending legal review. MOTION CARRIED. AYES: Mayor Darby,Councilmembers Duplant,Jones,Sonnier,and Ortiz. NOES: None. 9. ADJOURN There being no further business Mayor Darby adjourned the meeting at 8:00 p.m. Jef ,fiz,Mayor Pro Tern Ci." of Nederland,Texas 4 Minutes continued, December 8, 2025 ATTEST: (AU-. Wandati Jo6.Underwood, City Clerk City of Nederland, Texas ‘,���11111 pg• �. :Q= Q.•kt OFA 5 CITY OF NEDERLAND COUNCIL MEETING ATTENDANCE SHEET NAME TITLE PRESENT ABSENT Jeffrey P. Darby Mayor Bret Duplant Council Member—Ward I Britton Jones Council Member—Ward II Randy Sonnier Council Member—Ward III ✓ Jeff Ortiz Council Member—Ward IV Bruce Mills Interim City Manager Joni Underwood City Clerk Chris Leavins City Attorney Heather Stucker Director of Finance Rod Carroll Police Chief 1/ Terry Morton Fire Chief Dannie Davis Interim Director of Public Works George Wheeler Building Official ✓ Jacob Pitts Inspections Adm.Secretary 1" Molli Hall Librarian Stephanie Gaspard Human Resources Director Toby Latiolais Parks Director ✓ Robbie Smith Assist. Public Works Director .k l-Dowden Taylor Shelton Assist.to the City Manager / Jeffrey P. Darby, Mayor"+"°"14'- WAG (l1�✓4b� Joni derwood,City Clerk Date CITIZEN COMMENTS SIGN-IN SHEET NAME ADDRESS I o21q �p eatao�l �kvo �osiaa �o� AN AMENDMENT TO ORDINANCE NO. 107 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEDERLAND, TEXAS AMENDING ORDINANCE NO. 107 WHICH REGULATES TRAFFIC UPON THE PUBLIC STREETS OF THE CITY OF NEDERLAND, ADDING STOP SIGNS AT AVENUE D AT 23rd STREET, AND PROVIDING A PENALTY. WHEREAS, the City Council of the City of Nederland is of the opinion that traffic control is required in order to properly regulate traffic and maintain safety on the roads and streets of the City; and WHEREAS, the City Council of the City of Nederland originally approved an amendment to Ordinance 107 on June 12, 1961; the City Council proposes to add stops signs on Avenue D at 23rd Street and WHEREAS,the Nederland Police Department received a request to add stops on Avenue D at 23rd Street, making the intersections a 4-way stop, due to speeding along Ave D, making the intersection a 4-way stop, due to previous traffic accidents and lack of traffic control at this intersection. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,TEXAS THAT: Ordinance No. 107 is hereby amended by adding the following language: ARTICLE VII. SECTION 54.1 —STOP SIGNS The intersections at Avenue D at 23rd Street, shall be designated as a "4-Way Stop Intersection". Stop signs shall be erected and maintained at all four corners in accordance with local and state law. All vehicles must come to a complete stop before entering the intersection. ARTICLE XVI. SECTION 122— PENALTY Any person who Intentionally, knowingly, or recklessly violates any provision of this ordinance shall be deemed guilty of a misdemeanor and shall on conviction thereof be fined as provided in Sec. 102-323, Nederland Code of Ordinances. ARTICLE XVII. SECTION 133 — EFFECTIVE DATE This amendment to the ordinance shall be in full force and effect after publication as provided by law. PASSED AND APPROVED BY THE CITY COUNCIL of the City of Nederland, Texas this the /371' day of / 'z2 , 2025. Jeffrey P. Darb', Mayor / City of Nederland,Texas ATTEST: A14;utokoa Jon Underwood, City Clerk City of Nederland,Texas APPROVED AS • FORM: rlir Ch •.vi ty Attorney City of Nederland,Texas 00011111111/U04, 0 NEDF4, -\ =L): . __ : 3�.e-, a `/ j�'`pc` "°OF1 -,, ORDINANCE NO. 2025-24 AN ORDINANCE BY THE CITY OF NEDERLAND,TEXAS, AUTHORIZING THE SETTLEMENT OF TEXAS GAS SERVICE COMPANY, A DIVISION OF ONE GAS, INC.'S STATEMENT OF INTENT TO INCREASE GAS RATES, FILED ON JUNE 30,2025; FINDING THAT THE MEETING COMPLIES WITH THE OPEN MEETINGS ACT;MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT;AND DECLARING AN EFFECTIVE DATE WHEREAS,on or about June 30,2025,Texas Gas Service Company,a Division of ONE Gas, Inc. ("TOS" or "Company") filed a Statement of Intent with the City of Nederland("City")and concurrently with the Railroad Commission of Texas("Railroad Commission") to increase gas rates within the Central-Gulf Service Area, West North Service Area,and Rio Grande Valley Service Area;and WHEREAS, in its Statement of Intent, TGS proposed to increase its revenue requirement by$41.1 million per year and to consolidate its three service areas into one statewide service area;and WHEREAS, the City of Nederland joined the Steering Committee of Cities to intervene and participate in the Railroad Commission proceedings;and WHEREAS, the Company has moved or will move to consolidatemunicipal proceedings with the concurrent Statement of Intent proceedings pending at the Railroad Commission;and WHEREAS, TGS, Railroad Commission Staff, and other intervening parties including the Steering Committee of Cities participated in settlement discussions to resolve all contested rate case issues without litigation, except the Company's request to consolidate service areas;and WHEREAS,TGS agreed to settle the rate request at an overall rate increase level of$15 million per year for the Central-Gulf,West North,and Rio Grande Valley Service Areas combined;and WHEREAS,the Railroad Commission Staff,the Lawton Law Firm,and counsel for other cities participating in this proceeding have recommended approval of the Partial Settlement terms as a reasonable alternative to resolve all but one of the contested rate case issues without the need for prolonged litigation. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,TEXAS,THAT: Section 1. The statement and findings set out in the preamble to this Ordinance are hereby in all things approved and adopted. Section 2. The City of Nederland hereby authorizes the settlement of the TGS rate case proceeding at an overall rate increase level of$15 million per year. Section 3. The meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,Chapter 551. Section 4. This ordinance shall become effective from and after its passage. PASSED AND APPROVED this 8th day of December,2025. Jeffrey P.Darsy,Mayor City of Nederland,Texas 1 ATTEST: W Joni/Underwood,City Clerk APPRO TO FORM: Chris eavins,City Attorney " pF NEDF''" "� d �= OF - ��o fi35F 2 THE LAWTON LAW FIRM, P.C. 12600 Hill Country Blvd.,Suite R-275•Austin,Texas 78738•512/322-0019 November 14,2025 Via E-Mail Ms.Sharae Reed Mr.Kenneth R.Williams City Attorney—City of Beaumont City Manager—City of Beaumont P.O.Box 3827 P.O.Box 3827 Beaumont,Texas 77704 Beaumont,Texas 77704 Mr.Brandon Monk Mr.Kevin Carruth City Attorney—Cityof Groves City Manager—City of Groves 4875 Parker Drive 3947 Lincoln Avenue Beaumont,TX 77705 Groves,Texas 77619-4604 Mr.Chris Leavins Ms.Cheryl Dowden City Attorney—City of Nederland Interim City Manager—City of Nederland P.O.Box 4915 P.O.Box 967 Beaumont,Texas 77704-4915 Nederland,Texas 77627 Ms.Roxann Cotroneo Mr.Ronald Burton City Attorney—City of Port Arthur City Manager—City of Port Arthur P.O.Box 1089 P.O.Box 1089 Port Arthur,Texas 77641 Port Arthur,Texas 77641 Mr.Lance Bradley Mr.Andre'Wimer City Attorney—City of Port Neches City Manager—City of Port Neches P.O.Box 1148 P.O.Box 758 Port Neches,Texas 77651 Port Neches,Texas 77651 Re: 2025 Statement of Intent of Texas Gas Service Company,a Division of ONE Gas, Inc. ("TGS" or "Company") to Change Gas Utility Rates within the Central-Gulf,West North,and Rio Grande Valley Service Areas Dear Cities: This letter is to update you on the status of TGS's statement of intent to increase rates in its Central-Gulf,West North,and Rio Grande Valley Service Areas,which is still pending with the Railroad Commission("Commission")and at the municipal level. CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION The parties have reached a settlement in principle in the rate case before the Commission, which we recommend that the Cities approve.As we will describe further below,we believe the settlement represents a reasonable outcome given the potential expense and risk of litigating contested issues. We are providing a proposed settlement approval ordinance for your consideration.If your City takes no action,we will assume your City is unopposed to the settlement. Our Review and Analysis of the Statement of Intent TGS requested a total rate increase of $41.1 million annually, representing a 9.83% increase in non-gas revenues. TGS also requested to consolidate its three existing service areas into one statewide service area. The Company's proposed rate increase would have a widely disparate impact between residential and non-residential customer classes as well as within the residential classes depending on their current service area. The proposed increase would go entirely to residential customers, whereas commercial, industrial, and other non-residential rate classes would receive rate decreases.In addition,residential customers in the West North Service Area would see increases of 24.5% to 27% over current rates, whereas residential customers in the Rio Grande Valley Service Area would see decreases of 5.8%to 21.9%.The impact on customers in the Central-Gulf Service Area,which includes all the cities in our coalition, is mixed. If approved,the average increase for Central-Gulf small residential customers would be $3.98 for usage of 17 Ccf per month, or an 8.9% increase over current rates. Large residential customers in the Central-Gulf Service Area using 46 Ccf per month would see an average decrease of$2.89 per month,which is a 3.7%decrease from current rates. Railroad Commission rules require similarly situated cities to coordinate efforts;therefore, we worked with the Cities Served by Texas Gas Service Company("TGS Cities"),I the Alliance of Texas Gas Service Municipalities ("ATGM"),2 and the City of El Paso in reviewing TGS's request. The combined recommended adjustments of all the city groups would reduce the Company's$41.1 million request by$52.2 million,resulting in a rate reduction of approximately $11.1 million from current rates.Commission Staff recommended adjustments that would reduce the Company's request by about$2.7 million. Although we either support or do not oppose the adjustments of Commission Staff and the other city groups, our focus in this case was on allocation and rate design issues such as those The TGS Cities include the Cities of Alton,Austin,Bayou Vista,Bee Cave,Brownsville,Cedar Park,Cuero, Donna,Dripping Springs,Edinburg,Elsa,Galveston,Georgetown,Gonzales,Harlingen,Hidalgo,Hutto,Kyle, Lakeway,Lockhart,Los Fresnos,Luling,Marble Falls,McAllen,Mission,Palm Valley,Pflugerville,Pharr,Port Isabel,Rancho Viejo,Raymondville,Rnllingwood,San Benito,Shiner,Weslaco,West Lake Hills,and Yoakum. 2 The ATGM includes the Cities of Andrews,Anthony,Borger,Bryson,Clint,Horizon City,Graham,and San Elizario. CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION 2 mentioned above.We also objected to a pilot program TGS proposed that would create a separate residential rate class for low-income customers.These customers would receive a 25%discount on their rates and the revenue shortfall of$3 million would then be collected from the rest of the residential customers.While we do not have a problem with helping low-income customers,we argued that it is unfair and contrary to basic ratemaking principles for one group of customers to subsidize a program that solely benefits a different group of customers.The other city groups and Commission Staff raised similar concerns with this program. Settlement The partial settlement in principle resolves all contested issues except the question of consolidating service areas.The parties are still litigating the consolidation issue,which will be decided by the Commission in January 2026.The Commission has a long-standing policy favoring consolidation of service areas,so we expect the Company's consolidation request to be granted. Key terms of the proposed settlement include: • A revenue requirement increase of$15 million,which is approximately 64%lower than the Company's requested revenue requirement increase of$41.1 million. • Both small and large residential customers in the current Central-Gulf Service Area are expected to have rate decreases if the Company's consolidation request is approved. • A 9.8%return on equity rather than the Company's requested 10.4%return on equity. • Revenue allocation such that no customer class will receive a rate decrease while other classes receive a rate increase. • The pilot program for low-income customers will be withdrawn.The Company's existing Share the Warmth program will be expanded to provide more assistance for low-income customers.The cost of this program will be shared between the Company,residential customers,and commercial customers. CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION 3 The rates resulting from the proposed settlement are shown below: Customer Class Customer Commodity Charge Charge/Ccf Residential—Sma113 $19.50 $0.92290 Residential-Large4 $35.00 $0.35926 Commercial—Small $75.00 $0.49457 Commercial-Large $150.00 $0.19457 Industrial $1,250.00 $0.18947 Public Authority $200.00 $0.17511 Transportation $500.00 $0.09470 Electric Generation Transportation $1,000.00 Demand Charges $0.72542 Usage $0.02000 Compressed Natural Gas $380.00 $0.09470 Unmetered Gas Light-Residential $0.00 $0.92290 Unmetered Gas Light-Commercial $0.00 $0.49457 Unmetered Gas Light-Industrial $0.00 $0.18947 Unmetered Gas Light—Public Authority $0.00 $0.17511 Assuming the Company's consolidation request is approved,Central-Gulf customers in the Small Residential Class with average usage of 15 Ccf per month will see a$1.82 decrease to their monthly bills.Customers in the Large Residential Class with average usage of 43 Ccf per month will see a$4.89 decrease to their monthly bills. Consolidation is expected to benefit residential customers in the Central-Gulf Service Area, so if the Company's consolidation request is not approved,they may experience increases rather than decreases.As stated earlier,however,we do not expect the Commission to go against its long-standing policy supporting consolidation of service areas. Recommendation We recommend that Cities approve the partial settlement.As we balanced the costs and benefits of settlement versus continued litigation risk,we evaluated the strength of TGS's revenue increase request compared to the litigation issues and proposed adjustments raised by the various city groups.Based on precedent,we expected significant downward adjustments to the Company's request. This downward assessment is supported by TGS's agreement to settle for$15 million versus the requested $41.1 million request. However, given the uncertainty of successfully 3 Applies to residential customers with annual normalized volume less than 331 Ccf. 4 Applies to residential customers with annual normalized volume of 331 Ccf or greater. CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION 4 litigating each issue and litigation cost,a settlement of$15 million annual increase that will result in a rate decrease to Central-Gulf residential customers—is reasonable. We areattaching for your consideration a proposed ordinance approving the settlement.In terms of timeline,we are asking each City to make a final decision at its next available meeting.The deadline for Cities to pass a Final Rate Ordinance is November 17,2025, but the proposed ordinance approving the settlement can be passed after this deadline. After November 17,the Company will move to consolidate all municipal actions with the proceedings at the Railroad Commission,including Cities who do not act before the November 17 deadline.If your City does not take action regarding the proposed settlement,we will assume your City is unopposed to the settlement. Please forward copies of passed ordinances to danlawtonlawfirmc igmail.com and mollvna mavhallvandervoort.com. If you have any questions or concerns,please do not hesitate to call. Sincerely, /s/Daniel J.Lawton CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION 5