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HomeMy WebLinkAbout9A1 - City Code Sections 312 & 313 MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: ISSUES: 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT March 20, 2005 9 A (1) Ralph Teschner, Finance Director CONSIDER APPROVAL OF ORDINANCES RELATING TO FRANCHISES: ADOPTION OF SECTIONS 312 and 313 OF PRIOR LAKE CITY CODE ESTABLISHING GAS AND ELECTRIC FRANCHISES Introduction The purpose of this agenda item is to adopt a franchise ordinance that would become part of the City Code and be used as a standard franchise agreement contract for all gas and electric utility companies that conduct business within the city. Section 312 relates to gas utilities while Section 313 applies to electric utilities. A separate franchise fee ordinance would also be necessary to implement franchise fees (see item 9A (2). Historv The City Council initially conducted a public hearing on December 19, 2005 for the purpose of soliciting public testimony regarding gas and electric franchises and associated franchise fees. Notice was also placed on the City's website and a brief excerpt regarding the public hearing was also in the December Wavelength. No citizen input was received. Representatives from Xcel Energy, Minnesota Valley Electric, Shakopee Public Utilities and Reliant Energy were present and suggested a number of language revisions. At the conclusion of the public hearing the Council closed the public testimony portion of the hearing and directed Staff to work with the utility companies on their concerns and bring back a final draft of the ordinance. Current Circumstances A number of provisions in the franchise ordinance have been modified to the acceptance of both Staff and the utility companies. The two biggest issues that were resolved was establishing the term of the franchise agreement at 20 years versus our original proposal of 10 years and eliminating the right-or-way permit fee in lieu of the franchise fee. The requirement for the ROW permit will be retained but the administrative cost will be covered by the proposed franchise fee. Both items are incorporated in franchise agreements of most other municipalities surveyed by Staff. As the City Council is aware, we have established standardized agreements including our water tower antenna leases, construction contracts, professional services contracts, developer agreements, private use of public property agreements and the like. In an effort to minimize differences in our franchise agreements and maximize conformance with the franchise ordinances, it would be appropriate for the Council to adopt franchise ordinances which become the basis for standard agreements for both gas and electric companies to operate under. There are a number of reasons why it would be advantageous for the City to consider the implementation of utility franchise ordinances: www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 1.) The franchise agreement itself would establish location requirements and conditions of use for placement of utilities in the City's right of way. Such provisions would not only enhance the safety of the public but would also govern street openings, restoration and provide mapping of facilities. 2.) The City has been approached in the past by both CenterPoint Energy and Xcel Energy to enter into franchise agreements. Their interest is based upon the fact that they wish to have a formal agreement that grants them the expressed authority to install gas and electric service mains on city property. The franchise agreements are non exclusive even though the service territories are. 3.) Standard franchise agreements encourage equity between franchisees. They also assure the agreements are fully compliant with the Prior Lake City Code. FINANCIAL IMPACT: 4.) Finally standardized franchise agreements with a 20 year life span save Staff and City Council time and effort in negotiating and reviewing documents that are individually negotiated. The twenty year life assures utility consistency in municipal requirements. A franchise ordinance is necessary in order for the City to enter into a formal franchise agreement with utility companies. A signed franchise agreement is required to charge a corresponding franchise fee. The following alternatives are available to the City Council: 1. Approve Ordinance Adopting Sections 312 and 313 of Prior Lake City Code Establishing Gas and Electric Franchises. 2. Amend the ordinance per Council direction. 3. Take no action. ALTERNATIVES: RECOMMENDED MOTION: Alternative 1. If approved a second motion authorizing the Mayor and City Manager to sign the franchise agreements would be necessary. Reviewed by: ~HLk 6u Ii Q.'\ /(!M;, Frank BOYI~;:Ci}iMarlage1 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 Gas Franchise Ordinance ORDINANCE NO.1 06. ADOPTING SECTION 312 OF THE PRIOR LAKE CITY CODE AUTHORIZING NONEXCLUSIVE FRANCHISES TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIVATE USE AND TO USE THE PUBLIC GROUND OF THE CITY OF PRIOR LAKE, MINNESOTA, FOR SUCH PURPOSE; AND, PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, SCOTT COUNTY, MINNESOTA, DOES HEREBY ORDAIN THAT: 1. The City Council is hereby authorized to enter into the City's Standard Franchise Agreement as it deems appropriate which reflect the terms and conditions of Section 312 of the Prior lake City Code that establish the Gas Franchise. 2. Section 312 of the Prior lake City Code is hereby adopted as follows: 312.100: DEFINITIONS For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Prior Lake, County of Scott, State of Minnesota. City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals, but excluding facilities for providing heating, lighting, or other forms of energy. Commission. In the case of utilities subject to the regulation by the Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government, which preempts all or part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission. Municipally owned utilities and cooperatives shall be subject to applicable regulations. Company. A partnership or corporation, its successors and assigns including all successors or assigns that own or operate any part or parts of the Gas Facilities subject to this franchise. www.cityofRriorlake.com RlAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 1 Phone 952.447.4230 / Fax 952.447.4245 312.200: 312.201 313.202 312.203 312.204 312.205 Gas Facilities. Gas transmission and distribution pipes, lines, ducts, fixtures, and all necessary equipment and appurtenances owned or operated by the Company for the purpose of providing gas energy for public or private use. Notice. A writing served by any party or parties on any other party or parties. Public Utility. Any company organized for the purpose of providing gas utility service including municipally-owned utilities and gas cooperatives. Public Way. Any street, alley or other public right-of-way within the City including all public utility easements. Public Ground. Land owned or otherwise controlled by the City for park, open space or similar public purpose, which is held for use in common by the public. ADOPTION OF FRANCHISE Grant of Franchise. City hereby grants Company, for a period of 20 years from the date this Ordinance is passed and approved by the City, the right to import, manufacture, distribute and sell gas for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. For these purposes, Company may construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to such reasonable regulations as may be imposed by the City pursuant to ordinance and to the further provisions of this franchise agreement. Effective Date: Written AcceDtance. This franchise shall be in force and effect from and after the passage of this Ordinance and publication as required by law and its acceptance by Company. If Company does not file a written acceptance with the City within 60 days after the date the City Council adopts this Ordinance, the City Council by resolution may revoke this franchise. Service and Gas Rates. The service to be provided and the rates to be charged by Company for gas service in City may be subject to the jurisdiction of the Commission. The area within the City in which Company may provide gas service is subject to the provisions of Minnesota Statutes, Section 2168. 37 - .40. Nonexclusive Franchise. This is not an exclusive franchise. Default. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default, the desired remedy, and the time within which the default or obligation must be remedied. The notification shall be in writing. Representatives of the parties must promptly meet and RlAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 2 312.206 313.300 313.301 313.302 313.303 attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. Continuation of Franchise. If the City and the Company are unable to agree on the terms of a new franchise by the time this franchise expires, this franchise will remain in effect until a new franchise is agreed upon, or until 90 days after the City or the Company serves written Notice to the other party of its intention to allow the franchise to expire. However, in no event shall this franchise continue for more than one year after expiration of the 20 year term set forth in Section 312.201. RIGHT OF WAY MANAGEMENT Location of Facilities. Gas Facilities shall be located, constructed, and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt the normal operation of any City Utility System previously installed therein. Gas Facilities may be located on Public Grounds as determined by the City. Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Gas Facilities shall be subject to permits if required by a separate ordinance and to other reasonable regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this franchise agreement. Field locations. Company shall provide field locations for its underground Gas Facilities within City consistent with the requirements of Minnesota Statutes, Chapter 2160 and Minnesota Rules parts 7819.4000 and 7819.4100. Street ODeninas. Company shall not open or disturb the surface of any Public Way or Public Ground for any purpose without first having obtained a permit from the City, if required by a separate ordinance for which the City may impose a reasonable fee. Permit conditions imposed on Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. Company may, however, open and disturb the surface of any Public Way or Public Ground without permission from the City if (i) an emergency exists requiring the immediate repair of Gas Facilities and (ii) Company gives telephone notice to the City before, if reasonably possible, commencement of the emergency repair. Within two business days after commencing the repair, Company shall apply for any required permits and pay any required fees. R:lAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 3 313.304 313.305 313.306 313.307 313.400 Restoration. After undertaking any work requiring the opening of any Public Way, the Company shall restore the Public Way in accordance with Minnesota Rules, part 7819.1100 and applicable City ordinances consistent with law. Company shall restore Public Ground to as good a condition as formerly existed, and shall maintain the surface in good condition for six (6) months thereafter. All work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration of the Public Ground at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.3. The City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the city, of a person or entity obtaining the City's permission to install, replace or maintain facilities in a Public Way. Avoid Damaae to Gas Facilities. The Company must take reasonable measures to prevent the Gas Facilities from causing damage to persons or property. The Company must take protective measures when the City performs work near the Gas Facilities, if given reasonable notice by the City of such work prior to its commencement. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Gas Facilities while performing any activity. Notice of Imorovements to Streets. The City must give Company reasonable written Notice of plans for improvements to Public Ways or Public Ground where the City has reason to believe that Gas Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and character of the improvements, (ii) the Public Ways or Public Ground upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way is involved, the order in which the work is to proceed. The notice must be given to Company a sufficient length of time, considering seasonal working conditions, in advance of the actual commencement of the work to permit Company to make any additions, alterations or repairs to its Gas Facilities the Company deems necessary. Maooina Information. The Company must promptly provide mapping information for any of its underground Gas Facilities in accordance with Minnesota Rules parts 7819.4000 and 7819.4100. CHANGE IN FORM OF GOVERNMENT. Any change in the form of govemment of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. R:\Agenda ReportslMar 20 2006\Draft 312 gas franchise. doc 4 313.500 313.501 313.502 313.503 313.504 313.600 313.601 FACILITIES RELOCATION Relocation in Public Wavs. The Company shall comply with Minnesota Rules, part 7819.3100 and applicable City ordinances consistent with law. If a relocation is ordered within five years of a prior relocation of the same Gas Facilities, which was made at Company expense, the City shall reimburse Company for non-betterment costs on a time and material basis, provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconstruct at its own expense its Gas Facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. Relocation in Public Grounds. City may require Company at Company's expense to relocate or remove its Gas Facilities from Public Ground upon a finding by City that the Gas Facilities have become or will become a substantial impairment to the existing or proposed public use of the Public Ground. Proiects with Federal Fundinq. Relocation, removal, or rearrangement of any Company Gas Facilities made necessary solely because of the extension into or through City of a federally-aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the right herein granted to Company is a valuable right. City shall not order Company to remove or relocate its Gas Facilities when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non-betterment costs of such relocation and the loss and expense resulting therefrom are first paid to Company, but the City need not pay those portions of such for which reimbursement to it is not available. No Waiver. The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Way or Public Ground was established, or Company's rights under state or county permit. This provision is unrelated to the collection of any franchise fee imposed by the City. FRANCHISE FEE Form. During the term of the franchise hereby granted, and in lieu of any other permit fees being imposed or that the City has a right to impose, the City may charge the R:lAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 5 313.602 313.603 313.604 313.605 Company a franchise fee. The Company shall collect the amounts indicated in a Fee Schedule set forth in a separate ordinance from each customer in the designated Company Customer Class. "Customer Class" shall refer to the classes listed on the Fee Schedule and as defined or determined in Company's gas tariffs on file with the Commission. "Fee Schedule" refers to the schedule below setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Classes added by Company to its gas tariffs after the effective date of this franchise agreement. Seoarate Ordinance. The franchise fee shall be imposed by separate ordinance duly adopted by the City Council and served upon Company by certified mail. The fee shall not become effective until the beginning of a Company billing month at least 60 days after written notice enclosing such adopted ordinance had been served upon Company by certified mail. Condition of Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes a fee of the same or substantially similar amount on the sale of energy within the City by any other energy supplier, provided that, as to such supplier, the City has the authority to require a franchise fee. Collection of Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for gas service in each class. The payment shall be due the last business day of the month following the period for which the payment is made. The franchise fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements to the Company and not occur more often than annually and no change shall require a collection from any customer for gas service in excess of the amounts specifically permitted by the franchise fee ordinance. The time and manner of collecting the franchise fee is subject to the approval of the Commission. No franchise fee shall be payable by Company, if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for gas service, Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to accounts for uncollectibles, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. Eauivalent Fee Reauirement. The separate ordinance imposing the fee shall not be effective against Company unless it lawfully imposes and the City monthly or more often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, R:\Agend. ReportslMar 20 2006\Draft 312 gas franchise. doc 6 313.606 313.700 313.800 313.801 313.802 the City has the authority to require a franchise fee or to impose a tax. The "same or greater equivalent amount" shall be measured, if practicable, by comparing amounts collected as a franchise fee from each similar customer, or by comparing, as to similar customers the percentage of the annual bill represented by the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting, or to run machinery and appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Section, the forgoing conditions will be waived to the extent of such written consent. Continuation of Franchise Fee. If this franchise expires and the City and the Company are unable to agree upon terms of a new franchise, the franchise fee, if any being imposed by the City at the time this franchise expires, will remain in effect for a period not to exceed one year. TREE TRIMMING Unless otherwise provided in any permit or other reasonable regulation required by the City under separate ordinance, Company may trim all trees and shrubs in the Public Ways and Public Grounds of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of any Gas Facilities installed hereunder, provided that Company shall hold the City harmless from any liability arising therefrom. INDEMNIFICATION Indemnitv of City. Company shall indemnify and hold the city harmless from any and all liability, on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Gas Facilities located in the Public Ways and Public Grounds. The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonable deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. Defense of City. In the event a suite is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City, which consent shall not be unreasonable R:lAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 7 313.900 313.1000 313.1100 313.1101 313.1102 313.1200 withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City; and Company, in defending any action on behalf of the City shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. VACATION OF PUBLIC WAYS The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. The City and the Company shall comply with Minnesota Rules, 7819.3200 and applicable ordinances consistent with law. Except where required for a City improvement project, the vacation of any Public Way, after the installation of Gas Facilities, shall not operate to deprive Company of its rights to operate and maintain such Gas Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to Company for failure to specifically preserve a right-of-way under Minnesota Statutes, Section 160.29. ABANDONED FACILITIES Company may abandon underground gas Facilities in pace, provided at the city's request, Company will remove abandoned metal or concrete encased conduit interfering with a City improvement project, but only to the extent such conduit is uncovered by excavation as part of the City improvement project. PROVISIONS OF ORDINANCE. Severabilitv. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part; provided, however, that if the City is unable to enforce its franchise fee provisions for any reason the City will be allowed to amend the franchise agreement to impose a franchise fee pursuant to statute. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. Limitation on Aoolicabilitv. This Ordinance constitutes a franchise agreement between the City and Company as the only parties and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of anyone or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. AMENDMENT PROCEDURE. Either party to this franchise agreement may at any time propose that the agreement be amended. If an amendment is agreed upon by the parties, this Ordinance may be amended R:\Agenda ReportslMar 20 2006\Draft 312 gas franchise. doc 8 at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Manager within 90 days after the effective date of the amendatory ordinance. 3. This ordinance shall become effective upon adoption and publication. Staff is hereby authorized to publish this ordinance in summary. Passed and adopted this 20th day of March 2006. I I Haugen Dornbush Erickson I LeMair I Millar YES NO Haugen Dornbush Erickson LeMair Millar {Seal} City Manager City of Prior Lake R:lAgenda ReportslMar 20 2006\Draft 312 gas franchise. doc 9 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 Electric Franchise Ordinance ORDINANCE NO.10S. AN ORDINANCE ADOPTING SECTION 313 OF THE PRIOR LAKE CITY CODE AUTHORIZING NONEXCLUSIVE FRANCHISES TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF PRIOR LAKE, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES. THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, SCOTT COUNTY, MINNESOTA, ORDAINS: 1. The City Council is hereby authorized to enter into the City's Standard Franchise Agreement as it deems appropriate which reflect the terms and conditions of Section 313 of the Prior Lake City Code that establish the Electric Franchise. 2. Section 313 of the Prior Lake City Code is hereby adopted as follows: 313.100 DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Prior Lake, County of Scott, State of Minnesota. City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals, but excluding facilities for providing heating, lighting, or other forms of energy. Commission. In the case of utilities subject to the regulation by the Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal govemment, which preempts all or part of the authority to regulate electric retail rates now vested in the Minnesota Public Utilities Commission. Municipally owned utilities and cooperatives shall be subject to applicable regulations. Company. A corporation or partnership its successors and assigns including all successors or assignees that own or operate any part or parts of the Electric Facilities subject to this franchise. www.cityofRriorlake.com RlAgenda ReportslMar 20 2006\Draft 313 electric franchise. doc 1 Phone 952.447.4230 / Fax 952.447.4245 313.200 313.201 313.202 313.203 313.204 313.205 Electric Facilities. Electric transmission and distribution towers, poles, lines, guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by Company for the purpose of providing electric energy for public or private use. Notice. A writing served by any party or parties on any other party or parties. Public Utility. Any company organized for the purpose of providing electric utility service including municipally-owned utilities and electric cooperatives. Public Way. Any street, alley or other public right-of-way within the City including all public utility easements. Public Ground. Land owned or otherwise controlled by the City for park, open space or similar public purpose, which is held for use in common by the public. ADOPTION OF FRANCHISE. Grant of Franchise. City hereby grants Company, for a period of 20 years from the date this Ordinance is passed and approved by the City, the right to transmit and furnish electric energy for light, heat and power for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. For these purposes, Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to such reasonable regulations as may be imposed by the City pursuant to ordinance and to the further provisions of this franchise agreement. Effective Date: Written Acceotance. This franchise shall be in force and effect from and after the passage of this Ordinance and publication as required by law and its acceptance by Company. If Company does not file a written acceptance with the City within 60 days after publication, the City Council by resolution may revoke this franchise. Service. Rates and Area. The service to be provided and the rates to be charged by Company for electric service in City may be subject to the jurisdiction of the Commission. The area within the City in which Company may provide electric service is subject to the provisions of Minnesota Statutes, Section 2168. 37 - .40. Nonexclusive Franchise. This is not an exclusive franchise. Default. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default, the desired remedy, and the time within which the default or obligation must be remedied. The notification shall be in writing. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved R:\Agend. ReportslMar 20 2006\Draft 313 electric franchise. doc 2 313.206 313.300 313.301 313.302 313.303 313.304 within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. Continuation of Franchise. If the City and the Company are unable to agree on the terms of a new franchise by the time this franchise expires, this franchise will remain in effect until a new franchise is agreed upon, or until 90 days after the City or the Company serves written Notice to the other party of its intention to allow the franchise to expire. However, in no event shall this franchise continue for more than one year after expiration of the 20 year term set forth in Section 313.201. RIGHT OF WAY MANAGEMENT. Location of Facilities. Electric Facilities shall be located, constructed, and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt the normal operation of any City Utility System previously installed therein. Electric Facilities may be located on Public Grounds as determined by the City. Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Electric Facilities shall be subject to permits if required by a separate ordinance and to other reasonable regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this franchise agreement. Field Locations. Company shall provide field locations for its underground Electric Facilities within City consistent with the requirements of Minnesota Statutes, Chapter 2160 and Minnesota Rules parts 7819.4000 and 7819.4100. Street Ooeninas. Company shall not open or disturb the surface of any Public Way or Public Ground for any purpose without first having obtained a permit from the City, if required by a separate ordinance for which the City may impose a reasonable fee. Permit conditions imposed on Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. Company may, however, open and disturb the surface of any Public Way or Public Ground without permission from the City if (i) an emergency exists requiring the immediate repair of Electric Facilities and (ii) Company gives telephone notice to the City before, if reasonably possible, commencement of the emergency repair. Within two business days after commencing the repair, Company shall apply for any required permits and pay any required fees. Restoration. After undertaking any work requiring the opening of any Public Way, the Company shall restore the Public Way in accordance with Minnesota Rules, part 7819.1100 R:lAgenda ReportslMar 20 2006\Draft 313 electric franchise. doc 3 313.305 313.306 313.307 313.308 and applicable City ordinances consistent with law. Company shall restore Public Ground to as good a condition as formerly existed, and shall maintain the surface in good condition for six (6) months thereafter. All work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration of the Public Ground at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.3. The City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the city, of a person or entity obtaining the City's permission to install, replace or maintain facilities in a Public Way. Shared Use of Poles. Company shall make space available on its poles or towers for City fire, water utility, police or other City facilities whenever such use will not interfere with the use of such poles or towers by Company, by another electric utility, by a telephone utility, or by any cable television company or other form of communication company. In addition, the City shall pay for any added cost incurred by Company because of such use by City. Avoid Damaae to Electric Facilities. The Company must take reasonable measures to prevent the Electric Facilities from causing damage to persons or property. The Company must take protective measures when the City performs work near the Electric Facilities, if given reasonable notice by the City of such work prior to its commencement. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Electric Facilities while performing any activity. Notice of Imorovements to Streets. The City must give Company reasonable written Notice of plans for improvements to Public Ways or Public Ground where the City has reason to believe that Electric Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and character of the improvements, (ii) the Public Ways or Public Ground upon which the improvements are to be made, (Hi) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way is involved, the order in which the work is to proceed. The notice must be given to Company a sufficient length of time, considering seasonal working conditions, in advance of the actual commencement of the work to permit Company to make any additions, alterations or repairs to its Electric Facilities the Company deems necessary. Maooina Information. The Company must promptly provide mapping information for any of its underground Electric Facilities in accordance with Minnesota Rules parts 7819.4000 and 7819.4100. R:lAgenda ReportslMar 20 2006\Draft 313 electric franchise. doc 4 313.400 313.500 313.501 313.502 313.503 313.504 313.600 CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. FACILITIES RELOCATION Relocation in Public Ways. The Company shall comply with Minnesota Rules, part 7819.3100 and applicable City ordinances consistent with law. If a relocation is ordered within five years of a prior relocation of the same Electric Facilities, which was made at Company expense, the City shall reimburse Company for non-betterment costs on a time and material basis, provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconstruct at its own expense its Electric Facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. Relocation in Public Grounds.. City may require Company at Company's expense to relocate or remove its Electric Facilities from Public Ground upon a finding by City that the Electric Facilities have become or will become a substantial impairment to the existing or proposed public use of the Public Ground. Proiects with Federal Fundina. Relocation, removal, or rearrangement of any Company Electric Facilities made necessary solely because of the extension into or through City of a federally-aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the right herein granted to Company is a valuable right. City shall not order Company to remove or relocate its Electric Facilities when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non-betterment costs of such relocation and the loss and expense resulting therefrom are first paid to Company, but the City need not pay those portions of such for which reimbursement to it is not available. No Waiver. The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Way or Public Ground was established, or Company's rights under state or county permit. This provision is unrelated to the collection of any franchise fee imposed by the City. FRANCHISE FE~. R:\Agenda ReportslMar 20 2006\Draft 313 electric franchise. doc 5 313.601 313.602 313.603 313.604 Form. During the term of the franchise hereby granted, and in lieu of any other permit fees being imposed or that the City has a right to impose, the City may charge the Company a franchise fee. The Company shall collect the amounts indicated in a Fee Schedule set forth in a separate ordinance from each customer in the designated Company Customer Class. "Customer Class" shall refer to the classes listed on the Fee Schedule and as defined or determined in Company's electric tariffs on file with the Commission. "Fee Schedule" refers to the schedule below setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Classes added by Company to its electric tariffs after the effective date of this franchise agreement. Seoarate Ordinance. The franchise fee shall be imposed by separate ordinance duly adopted by the City Council and served upon Company by certified mail. The fee shall not become effective until the beginning of a Company billing month at least 60 days after written notice enclosing such adopted ordinance had been served upon Company by certified mail. Condition of Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes a fee of the same or substantially similar amount on the sale of energy within the City by any other energy supplier, provided that, as to such supplier, the City has the authority to require a franchise fee. Collection of Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for electric service in each class. The payment shall be due the last business day of the month following the period for which the payment is made. The franchise fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements to the Company and not occur more often than annually and no change shall require a collection from any customer for electric service in excess of the amounts specifically permitted by the franchise fee ordinance. The time and manner of collecting the franchise fee is subject to the approval of the Commission. No franchise fee shall be payable by Company, if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for electric service, Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to accounts for uncollectibles, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. R:\Agenda ReportslMar 20 2006\Draft 313 electric franchise. doc 6 313.605 313.606 313.700 313.800 313.801 313.802 Eauivalent Fee Reauirement The separate ordinance imposing the fee shall not be effective against Company unless it lawfully imposes and the City monthly or more often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority to require a franchise fee or to impose a tax, The "same or greater equivalent amount" shall be measured, if practicable, by comparing amounts collected as a franchise fee from each similar customer, or by comparing, as to similar customers the percentage of the annual bill represented by the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting, or to run machinery and appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Section, the forgoing conditions will be waived to the extent of such written consent. Continuation of Franchise Fee. If this franchise expires and the City and the Company are unable to agree upon terms of a new franchise, the franchise fee, if any being imposed by the City at the time this franchise expires, will remain in effect for a period not to exceed one year. TREE TRIMMING Unless otherwise provided in any permit or other reasonable regulation required by the City under separate ordinance, Company may trim all trees and shrubs in the Public Ways and Public Grounds of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of any Electric Facilities installed hereunder, provided that Company shall hold the City harmless from any liability arising therefrom. INDEMNIFICATION Indemnity of City. Company shall indemnify and hold the city harmless from any and all liability, on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Electric Facilities located in the Public Ways and Public Grounds. The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonable deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. Defense of City.. In the event a suite is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the R:lAgenda ReportslMar 20 2006\Draft 313 electric franchise. doc 7 313.900 313.1000 313.1100 313.1101 313.1102 City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City, which consent shall not be unreasonable withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City; and Company, in defending any action on behalf of the City shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. VACATION OF PUBLIC WAYS The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. The City and the Company shall comply with Minnesota Rules, 7819.3200 and applicable ordinances consistent with law. Except where required for a City improvement project, the vacation of any Public Way, after the installation of Electric Facilities, shall not operate to deprive Company of its rights to operate and maintain such Electric Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to Company for failure to specifically preserve a right-of-way under Minnesota Statutes, Section 160.29. ABANDONED FACILlTIE& Company may abandon underground electric Facilities in pace, provided at the city's request, Company will remove abandoned metal or concrete encased conduit interfering with a City improvement project, but only to the extent such conduit is uncovered by excavation as part of the City improvement project. PROVISIONS OF ORDINANCE.. Severabilit\(. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part; provided, however, that if the City is unable to enforce its franchise fee provisions for any reason the City will be allowed to amend the franchise agreement to impose a franchise fee pursuant to statute. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. Limitation on Aoolicabilitv. This Ordinance constitutes a franchise agreement between the City and Company as the only parties and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of anyone or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. R\Agenda ReportslMar 20 2006\Draft 313 electric franchise. doc 8 313.1200 AMENDMENT PROCEDUR~. Either party to this franchise agreement may at any time propose that the agreement be amended. If an amendment is agreed upon by the parties, this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Manager within 90 days after the effective date of the amendatory ordinance. 3. This ordinance shall become effective upon adoption and publication. Staff is hereby authorized to publish this ordinance in summary. Passed and adopted this 20th day of March 2006. I YES I NO I Hauqen I Hauqen I Dornbush I Dornbush I Erickson I Erickson I LeMair I LeMair I Millar I Millar {Seal} City Manager City of Prior Lake R:\Agenda ReportslMar 20 2006\Draft 313 electric franchise. doc 9 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 GAS AND ELECTRIC FRANCHISE FEES ORDINANCE ORDINANCE NO. 106. AN ORDINANCE ADOPTING SECTION 314 OF THE PRIOR LAKE CITY CODE IMPLEMENTING GAS AND ELECTRIC FRANCHISE FEES WITHIN THE CITY OF PRIOR LAKE THE CITY OF PRIOR LAKE HEREBY ORDAINS THAT: 1. Section 314 of the Prior Lake City Code is hereby adopted as follows: 314.100 PurDose. The Prior Lake City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City of Prior Lake. 314.200 314.300 314.400 314.500 (a) Pursuant to City Ordinance Sections 312 and 313, and the City's Standard Franchise Agreements for Gas Franchise and for Electric Franchise, the City has the right to impose a franchise fee in an amount and fee design as authorized therein and in the fee schedule incorporated in 314.500 and 314.600 herein. Franchise Fee Statement A franchise fee is hereby imposed under City Code Section 312 and 313 in accordance with the schedule incorporated under Section 314.500 and 314.600 herein. Payment and Fee Desian. Franchise fees shall be paid to the City quarterly, based upon a calendar year, with payment due by the 30th day of the month after the end of each quarter. The franchise fees shall be payable to the City in accordance with the terms set forth in Section 313 of the Franchise Ordinance. This fee is a monthly account-based fee on each premise and not a meter-based fee. In the event that an entity covered by this ordinance has more than one meter at a single premise, but only one account, only one fee shall be assessed to that account. If a premise has two or more meters being billed at different rates, the Company may have an account for each rate classification, which will result in more than one franchise fee assessment for service to that premise. If the Company combines the rate classifications into a single account, the franchise fee assessed to the account will be the largest franchise fee applicable to a single rate classification for energy delivered to that premise. In the event any entities covered by this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premise, the Company's manner of billing for energy used at all similar premises in the city will control. Surcharae. The City recognizes that the Minnesota Public Utilities Commission allows the utility company to add a surcharge to customer rates to reimburse such utility company for the cost of the fee and that the Gas and/or Electric Utilities Company will surcharge its customers in the City the amount of the fee. Electric Fee Schedule. Class Residential Sm C & I - Non-Oem Sm C & 1- Demand Large C & I Month Iv Account Fee $1.50 $5.00 $10.00 $50.00 R:\Agenda ReporlslMar 20 20061Draft 314 franchise fee~%'&:fB&8rlake.com Phone 952.447.4230 / Fax 952.447.4245 Franchise fees are to be collected by the utility in the amounts set forth in the above schedule, and submitted to the City on a quarterly basis as follows: January - March collections due by April 30. April- June collections due by July 31. July - September collections due by October 31. October - December collections due by January 31. 314.600 Gas Fee Schedul~. Class Residential Comm-A Comm/lnd-B Comm/lnd-C SVDF-A SVDF-B LVDF Monthlv Account Fee $1.50 $1.50 $5.00 $10.00 $10.00 $10.00 $10.00 Franchise fees are to be collected by the utility in the amounts set forth in the above schedule, and submitted to the City on a quarterly basis as follows: January - March collections due by April 30. April - June collections due by July 31. July - September collections due by October 31. October - December collections due by January 31. 314.700 Record SUDDort for Payment. The Gas and/or Electric Utilities Company shall make each payment when due and, if requested by the City, shall provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles, refunds or error corrections. 314.800 Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 3.5 the Standard Franchise Agreement. 314.900 Effective Date of Franchise Fe@. The effective date of this ordinance shall be after its publication and sixty (60) days after the sending of written notice enclosing a copy of this adopted Ordinance to the Gas and/or Electric Utility Company by certified mail. Collection of the fee shall commence with the bills for the month of July 2006. 3. This ordinance shall become effective upon adoption and publication. Staff is hereby authorized to publish this ordinance in summary. Passed and adopted this 20th day of March 2006. YES NO Haugen Dornbush Erickson LeMair Millar Haugen Dornbush Erickson LeMair Millar {Seal} City Manager, City of Prior Lake R:lAgenda ReportslMar 20 20061Draft 314 franchise fees March 2006.doc