A dispute between the city of Denton and Charter Communications over how to interpret federal franchise fee law may wind up in court.

The City Council on Tuesday voted to allow city attorneys to start litigation against Charter, which holds a franchise agreement with the city and runs a public access channel and studio. But city officials later said they were still negotiating with the cable company and no lawsuit was imminent.

Kevin Allen, Charter’s director of government relations, said he was “taken aback” by the city’s action because talks were under way to resolve the dispute.

“I really felt that with our agreement to not take any action to impact the studio or the PEG [public, educational and government] channels, that the city would not take any action, particularly public action, such as they did,” Allen said.

Allen said he still hoped to avoid a lawsuit.

The dispute revolves around the interpretation of the federal Cable Act. The law allows cities to charge cable companies a franchise fee of up to 5 percent of gross revenue in exchange for the use of public rights of way.

Denton officials believe the law allows them to charge the 5 percent fee and still require Charter to incur the costs of running the public access channel (Channel 25) and studio, city spokesman John Cabrales said.

Charter officials disagree, saying operational expenses should be counted toward the 5 percent cap.

The council voted without discussion to approve the legal action Tuesday night. Members had discussed the dispute earlier behind closed doors.

Also Tuesday, the council again postponed a zoning change for the 3,331-acre Inspiration mixed-use development in far south Denton, angering the developer.

The move came after council member Chris Watts, whose district includes the area, said the developer had not met all the criteria for approval. Watts said the developer’s application was incomplete because it did not show how public infrastructure would be funded.

Gary Lane, senior project manager for Aperion, the developer, said he was “quite distressed” by another delay and questioned the council’s right to hold up approval again.

Council members postponed the case June 17 after residents from the neighboring Robson Ranch retirement community filled council chambers to oppose it. The council asked developers of Robson Ranch and Inspiration to meet and consider the best way to buffer the projects’ shared border.

Lane said the parties agreed to a solution that would include an 8-foot fence and open space between the developments. The issue of infrastructure funding wasn’t an issue during the June meeting and could be better addressed later when the property is platted, Lane said.

“This is a big surprise and I’m sitting here going, ‘What right does council have when it tabled [the rezoning] on a buffer issue?’” he told the council.

It was unclear Tuesday night exactly what information the developer would have to produce. City Manager George Campbell said the city would study its requirements and offer clarification to the developer within 24 hours.

Inspiration, located along both sides of Interstate 35W in far south Denton, is expected to include up to 11,914 single-family homes and 3,408 multifamily units, along with retail and commercial areas.

Inspiration representatives have discussed creating a public improvement district, which could charge homeowners for roads, water and sewer lines and other infrastructure in the development by taxing their property. The council would have to approve such a district.

The council did approve a deal with Petrus Investments L.P. to buy a 196.5-acre site at the edge of the Inspiration development for a city park to serve Denton’s budding southern sector.

Parks director Emerson Vorel had said the land acquisition would not be affected by the result of the zoning case.

The park site, bought for about $5 million, is at the northwest corner of Bonnie Brae Street and Allred Road, between I-35W and Fort Worth Drive. Plans call for athletic fields, a recreation center and other facilities.

Also Tuesday, the Denton City Council:

• Reappointed Pete Kamp mayor pro tem for another year but abolished the two-year-old position of deputy mayor pro tem, held by Joe Mulroy. Recently elected Mayor Mark Burroughs suggested the change, saying the deputy position was created to add a third member to the council’s agenda committee, and he would rather have only two members: the mayor and mayor pro tem. With three members on the committee, that meant a near-majority of the seven-member council was reviewing all items on an agenda before a council meeting, which he called an “uncomfortable situation.” The committee meetings will continue to be open to the public, Burroughs said. Mulroy said he disagreed with Burroughs’ rationale but voted with the other six members to revoke the deputy position, saying it was the new mayor’s prerogative. Burroughs denied any political motivation; Mulroy backed incumbent Perry McNeill over Burroughs in the recent mayor’s race.

• Bought a 2-acre property at 869 Woodrow St. for $700,000. The site will house the city’s facilities management department, which is moving from its building at 604 E. Hickory St. to make way for the Denton County Transportation Authority’s downtown transit station.

• Approved a three-year, $438,000 contract with Dallas-based Weaver and Tidwell LLP to perform external audits. The city’s three-year contract with its last external auditor, KPMG, expired June 21.

• Approved a five-year, $1.6 million deal for the purchase of an automatic meter reading system. The system will allow Denton Municipal Electric to connect and disconnect electric service from a centralized office and collect meter readings electronically. A first-year pilot project is expected to cost $105,283.72.

• Bought a $241,163.30 interactive voice response system for Denton Municipal Electric. Officials said the technology would prevent the utility’s phone system from being overloaded during periods of heavy call volume, such as when customers call in power outages.

• Adopted a process to approve municipal setting designations, which allow development on polluted properties under less-stringent groundwater cleanup rules. The Texas Legislature established the designation in 2003 for sites where groundwater is contaminated but not needed for drinking, cooking, bathing or crop irrigation. Denton’s ordinance sets up a process for local review and approval of designation applications, bans the use of groundwater from the sites and provides for public notification, among other requirements.

• Updated the city’s impact fees, which are charged to new development to offset their effect on water and wastewater facilities. A new water impact fee will apply to the growing southwest section of the city, and water impact fees will rise about 8 percent in all other areas. Also, wastewater impact fees will fall slightly in most of Denton and decrease by about 33 percent in areas north of Loop 288.

• Rezoned about 38 acres on the west side of Interstate 35E near Brinker Road for a commercial development. To address nearby residents’ concerns, the developer will have to preserve an on-site pond, erect an 8-foot iron fence between the project and the Southridge Estates development to the west, and build structures no higher than 40 feet if they are within 100 feet of houses, among other conditions.

• Amended the development code to require more off-street parking for duplexes with more than three bedrooms, and to allow the regulation of shipping containers and other portable storage units. The changes are meant to address the problems of too much on-street parking near duplexes and of storage containers left in public view for long periods of time, officials said.

—Lowell Brown