Discussion of LDC gas surcharge, annexation of land: 4 takeaways from the Montgomery City Council meeting on Feb. 13


Montgomery City Council members gathered on Tuesday evening to take action on various agenda items, including annexation of 3.22 acres of land, an interlocal agreement and an alcohol beverage permit for a new business. All council members were in attendance.

Here are four takeaways from the Montgomery City Council meeting on Feb. 13:

  1. Interlocal agreement between Montgomery and ESD No. 2 approved

Council members unanimously voted to approve an interlocal agreement between the city of Montgomery and Montgomery County Emergency Services District No. 2, which provides fire protection, fire prevention, rescue and first responder services to unincorporated areas surrounding Montgomery.
The contract ensures that the city of Montgomery and ESD No. 2 equally share two percent of sales tax—one percent per entity. City Administrator Jack Yates said the agreement makes for a “stronger and more fiscally sound city.”

2. City annexed 3.22 acres of land off Hwy. 105

Council members approved the annexation of a 3.22-acre tract of land, or the property owned by Peter Hill, on the east Montgomery’s east extraterritorial jurisdiction on the south side of Hwy. 105.
Council members agreed that annexing the land would allow the city to extend any city ordinances to retain control of the Montgomery’s growth. With the interlocal agreement between the city and MCESD No. 2 approved, both entities will split 2 percent of future sales tax revenue from the annexed 3.22 acres.

3. Alcohol beverage permit for Uncle Bob’s BBQ approved

Council members approved a mixed alcohol beverage permit for the Uncle Bob’s BBQ, the new tenant of 20873 Eva. St., Ste. G, Montgomery—which was formally occupied by Pizza Shack. The restaurant was already licensed for beer and wine, and with the approval of an alcoholic beverage permit the restaurant will feature a full-service bar. Uncle Bob’s BBQ offers sandwiches, burgers and homemade smoked barbecue items, like sliced brisket and smoked sausage, served with Uncle Bob’s signature sauces, seasonings and rubs.

4. Local gas distribution company’s surcharge evaluated

In recent city council meetings, residents of west Montgomery have expressed frustration about a $20,527 utility surcharge on customers by Local Distribution Company, the natural gas distributor for the Montgomery area. LDC has said the $20,527 surcharge is reimbursement for relocating gas lines that were laid in anticipation of the Villas of Mia Lago subdivision being built near Lone Star Bend Street, Yates said. When the Lone Star Bend Street had to be realigned, the LDC had to move the gas lines, Yates said.

In January 2017 and June 2017, LDC twice requested the city provide a letter of support that LDC could give to its regulating body, the Texas Railroad Commission, to gain permission to implement a surcharge to recover lost costs, according to Montgomery City Council meeting minutes.

Although council members denied the request both times, the surcharge was ultimately approved by the Railroad Commission because of a technicality requiring council members to state the reason for denying the request in the meeting’s official motion, City Attorney Larry Foerster said.

However, Foerster said he believes from his preliminary evaluations that an initial ruling from the Railroad Commission stated the LDC could implement relocation cost recovery in the unincorporated areas of Montgomery but are not entitled to collect a surcharge from residents in incorporated areas.

If further investigation proves this to be correct, Foerster said residents in incorporated areas of Montgomery could potentially be refunded any surcharge amount paid in recent months.

“Overall, our experience with LDC is that they have repeatedly asked us to impede competition, which raises rates for customers,” Position 4 Councilmember Rebecca Huss said. “They’ve asked us to provide reimbursements for business failures, and that’s just unacceptable. They’re hiding behind … procedures that they control; they think their access to the Railroad Commission and interpretation of what the Railroad Commission says determines what their customers get charged and I think that’s totally unacceptable.”

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Kelly Schafler
Kelly Schafler is the editor for the Lake Houston, Humble and Kingwood edition of Community Impact Newspaper, covering public education, city government, development, businesses, local events and all things community-related. Before she became editor, she was the reporter for the Conroe and Montgomery edition for a year and a half.
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