City Of Kyle Continues Negotiations In Settlement With Kinder Morgan On Ordinance Lawsuit

Staff Reports

The City of Kyle authorized finalizing an agreement with Kinder Morgan on Tuesday that would require the pipeline company to pay $2.7 M to be exempted from the new pipeline development ordinance.

The first hearing on the company’s lawsuit against the city was slated to take place Tuesday, September 17, but the council held an executive session Monday to consult with attorneys before convening in open court to vote.

“The city of Kyle has been in the process of discussing a potential settlement with Kinder Morgan in regards to the ongoing litigation we are involved in with them,” Mayor Travis Mitchell said.

Council passed the ordinance in July, which placed restrictions and regulations on companies building pipelines in the Kyle City Limits as well as any future developer building near a pipeline.

Last week, the City of Kyle amended the ordinance’s language. 

William Christian of Graves, Dougherty, Hearon and Moody, an Austin-based firm hired to defend the city in the lawsuit, provided the council with the details of the settlement terms.

Christian said in addition to the $2.7 M payment, the proposed settlement would require a right-of-way use agreement between the two parties; the right of way agreement would state that the city of Kyle would not subject the company to additional delays or costs “above and beyond what is spelled out in state or federal statutes.”

The city would also issue Kinder Morgan a road-crossing permit within 14 days of the execution of the settlement.

Councilmember Daphne Tenorio said the settlement wasn’t a done deal yet; the council was granting legal counsel and Kinder Morgan two more weeks to continue the negotiations in the hopes of finding a resolution. 

The Mayor of Kyle, Travis Mitchell released the following statement regarding the settlement negotiations:

The City of Kyle is pursuing multiple avenues to eliminate or reduce the adverse impact that the Kinder Morgan Pipeline presents to our community, our environment, and our future. 

Over the last year, the Kyle City Council has demonstrated extraordinary solidarity and resolve in the face of long odds and a complex political environment. They are committed to achieving the best outcome possible to ensure our continued ability to regulate our developments, protect our environment, and ensure public safety. 

 The reality is, lawsuits are expensive. Kinder Morgan made more profits in the second quarter of this year than Kyle’s entire operating budget for the last decade.  The city firmly believes in their ability to regulate pipelines on the basis of infrastructure planning, but at this time the council is trying to determine what is in the best interest of the city as we face multiple lawsuits that could easily cost millions. 

Ultimately, this could have been avoided if we would have had been given the opportunity to work hand-in-hand with Kinder Morgan prior to the pipeline’s route being finalized by the company. That is not our present situation.

As the council has stated many times, our opposition has not been against oil and gas pipelines in general, but rather the manner in which this particular pipeline was proposed to be installed through our city. We were not consulted, and state law is not on the side of cities in this regard. 

We appreciate the patience and understanding of our community as we tackle this very difficult issue. No decisions have been finally made. 

The City of Kyle would like to ask any and all residents of Texas to engage our state legislature and encourage them to give communities a better say in the pipeline routing process, better protection of landowner property rights, publicly and independently produced environmental impact studies, and the preservation of local jurisdiction’s ability to regulate these projects within their incorporated boundaries.