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HomeMy WebLinkAboutO-2404-5-05ORDINANCE NO. 2404-5-05 ' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, GRANTING TO COSERV GAS, LTD., A NON-EXCLUSIVE FRANCHISE TO USE PUBLIC RIGHTS-OF-WAY OF THE CITY OF ALLEN, TEXAS, FOR THE PURPOSES OF CONSTRUCTING, MAINTAINING, AND OPERATING PIPELINES AND EQUIPMENT IN THE CITY OF ALLEN, TEXAS, FOR THE TRANSPORTATION, DELIVERY, SALE AND DISTRIBUTION OF GAS; SETTING FORTH TERMS AND CONDITIONS TO GOVERN THE FRANCHISE; PROVIDING A REPEALING CLAUSE, A SEVERABIBrY CLAUSE, A SAVINGS CLAUSE AND AN EFFECTIVE DATE. WHEREAS, on December 3, 1998, the City Council of the City of Allen ("City") granted a gas franchise to CoSery Gas ("Company") to own, operate, and maintain a gas distribution system in City; and, WHEREAS, Company is the current holder of this gas Franchise in City, and has been engaged in the gas distribution business in the State of Texas and the City of Allen and, in furtherance thereof, has constructed and maintained portions of its physical plant in the City; and, WHEREAS, the original franchise ordinance granted by the Allen City Council expired December 2, 2004, and was extended under the same terms and conditions until June 30, 2005; and, WHEREAS, the City Council of the City of Allen hereby finds that it is to the mutual advantage of both the City and Company to enter into a new franchise ordinance establishing the conditions under which CoSery Gas will operate in the City; and WHEREAS, pursuant to Article 8 of the City's Charter, the City Council hereby determines that a grant of a franchise pursuant to this Ordinance is in the best interest and will inure to the benefit of the City and its citizens. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, THAT: SECTION 1. Definitions. For the purpose of this Ordinance the following terms, phrases, words, abbreviations and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. 1.1 "City" shall mean the City of Allen, Texas, and includes the territory that currently is or may in the future be included within the boundaries of the City. 1.2 "Company" or "CoSery Gas" shall mean CoSery Gas, Ltd. and its successors and permitted assigns. 1.3 "Contributions in Aid of Construction" or "CIRC" means monies received for construction of new facilities and facility removalfrelocation reimbursements and does not include donated property or reimbursements received for damages to Company's System. ' 1.4 "Effective Date" shall be as provided for in Section 18. 1.5 "Franchise" shall mean the non-exclusive permission granted to Company to use the Public Rights - of -Way for its Gas Distribution System. LI "Franchise Fee" shall mean the total franchise fees due from Company as set forth in Section 8, herein. 1.7 "Gas Distribution System" or "System" shall mean Company's system of pipes, pipelines, gas mains, laterals, feeders, regulators, meters, fixtures, connections, and all other appurtenant equipment used in or incident to providing delivery, transportation, distribution, supply and sales of gas for heating, lighting, power, and any other purpose for which gas may now or hereafter be used, located within the Public Right -of -Way of the City. 1.8 "Gross Revenues" shall mean all revenue derived or received, directly or indirectly, by the Company from or in connection with the operation of the System within the corporate limits of the City and including, without limitation: (1) all revenues received by the Company from the sale of gas to all classes of customers within the City excluding gas sold to another gas utility in the City for resale to its customers within City. Any sale of gas to another gas utility where gas is not resold to end users in the City will not be excluded; (2) all revenues received by the Company from the transportation of gas through the pipeline system of Company within the City to customers located within the City excluding the transportation of gas sold to another gas utility in the City for resale to its customers within City. Any revenues from the transportation of gas to another gas utility where gas is not resold to end users in the City will not be excluded; (3) the value of gas transported by Company for Transport Customers through the System of Company within the City ("Third Party Sales") excluding gas sold to another gas utility in the City for resale to its customers within City. Any sale of gas to another gas utility where gas is not sold to end users in the City will not be excluded. The value of such gas to be established by utilizing Company's monthly Weighted Average Cost of Gas charged to industrial customers, or commercial customers if the Company does not have industrial customers on the System at the time it transports gas, as reasonably near the time as the transportation service is performed; and (4) "Gross revenues" shall include: (a) other revenues derived from the following `miscellaneous charges': i. charges to connect, disconnect, or reconnect gas within the City; ii. charges to handle returned checks from consumers within the City; iii. such other service charges and charges as may, from time to time, be authorized in the rates and charges on file with the City; and iv. contributions in aid of construction ("CIAC"); ' (b) revenues billed but not ultimately collected or received by the Company; (c) fees fees; gross receipts and state receipts and Ordinance No. 2404-5-05, Page 2 C 1 (d) revenues from the lease, license or use of Company's facilities in the City Right -of - Way as set forth in Section 2.9 of this Ordinance. (5) "Gross revenues" shall not include: (a) the revenue of any Person including, without limitation, an affiliate, to the extent that such revenue is also included in Gross Revenues of the Company; (b) sales taxes; and (c) any interest income earned by the Company; (d) all monies received from the lease or sale of real or personal property, provided, however, that this exclusion does not apply to the lease of facilities within the City's right -of way. 1.9 "Public Rightof-Way" means the area of land within the City that is acquired by, dedicated to, or claimed by the City in fee simple, by easement, or by prescriptive right and that is expressly or impliedly accepted or used in fact or by operation of law as a public roadway, highway, street, sidewalk, alley, or utility access easement. The term includes the area on, below, and above the surface of the Public Right -of -Way. The term applies regardless of whether the Public Right -of -Way is paved or unpaved. 1.10 "Railroad Commission of Texas" or "RRC" shall mean the Railroad Commission of the State of Texas or its successor agency. 1.11 "Right -of -Way Management Ordinance" shall mean Ordinance No. 1950-6-01 codified as Article 3, Chapter 13 of Code of Ordinances as amended. 1.12 "Transport Customer" means any person or entity for which Company transports gas through the System of Company within the City Public Right -of -Way to customers for delivery or consumption within the City excluding gas sold to another gas utility in the City for resale to its customers within City. Any sale of gas to another gas utility where gas is not resold to end users in the City will not be excluded. SECTION 2. Grant of Authority. 2.1 Permission. Subject to the terms and conditions herein, City hereby grants Company nonexclusive permission to use and occupy, subject to the terns hereof, the present and future Public Right -of - Way of the City for the purpose of laying, maintaining, constructing, protecting, operating and replacing Company's equipment needed and necessary to deliver, transport and distribute gas in, out of, and through said City. Subject to Section 2.9, Company shall not use the Public Right -of -Way for any use or purpose other than its use as a Gas Distribution System, without obtaining a separate, written agreement from the City for the ancillary service. 2.2 Non -Exclusive Use. This Franchise does not provide Company with exclusive use of the Public Right -of -Way and the City reserves the right to grant at any time, like privileges, rights and franchises, as it deems appropriate to any other person, corporation or business entity. Ordinance No. 2404-5-05, Page 3 2.3 Area of the City Affected. This Franchise shall extend to and include any and all territory that is within the corporate limits of the City. Additionally, this Franchise shall extend to any and all ' territory that is annexed by the City during the term of this Franchise. In the event of disannexation, this Franchise shall be reduced to the territory that continues to be in the City. 2.4 City's Rights in Public Rights -of -Way. Company acknowledges that by this Franchise Agreement it obtains no rights to, or further use, of the Public Right -of -Way other than those expressly granted herein. Company acknowledges and accepts at its own risk, provided that the City has the legal authority for the use, or uses in question, that the City may use future Public Right -of -Way in which Company's System is located in a manner inconsistent with Company's use of such Public Rights -of - Way. 2.5 Compliance with Law. Company, during the term of this Franchise Agreement, shall be subject to and comply with all applicable local, state and federal Laws, including the rules and regulations of any and all agencies thereof, whether presently in force or whether enacted or adopted at any time in the future. Notwithstanding anything in this Franchise Agreement to the contrary, this Franchise Agreement shall in no way affect or impair the rights, obligations or remedies of the parties under the Texas Utilities Code, or other state or federal Law, and nothing herein shall be deemed a waiver, release or relinquishment of either party's right to contest, appeal, or file suit with respect to any action or decision of the other party, including ordinances adopted by the City, that it believes is contrary to any federal, state or local Law or regulation. The City will make an effort to provide Company with reasonable notice and opportunity to review and comment upon any new City ordinances that impact Company's use of the Public Right -of -Way. In constructing, maintaining and operating the Gas Distribution System, Company shall act in a good and workmanlike manner, observing high standards of engineering and workmanship and using materials of good and durable quality. Company shall comply in all respects with applicable codes and industry standards. 2.6 Continued Obligations. This Franchise Agreement does not relieve Company of the obligation to comply with applicable municipal codes and ordinances and to obtain permits, licenses and other approvals from City or other units of government, that are required for the construction, repair or maintenance of the Gas Distribution System unless in an emergency, except in no instance shall Company be required to pay permitting fees or bonds related to these City permits, licenses or other approval processes. 2.7 Right of Condemnation Reserved. Nothing in this Franchise Agreement shall limit any right the City may have to acquire by eminent domain any property of Company. 2.8 Fees. Subject to Section 8.1, nothing in this Franchise Agreement shall be construed to limit the authority of the City to impose a tax, fee, or other assessment of any kind on any person. Company shall obtain all applicable local, state, and federal licenses, permits, and authorizations required for the construction, installation, maintenance, or operation of its Gas Distribution System within the Public Right -of -Way. 2.9 Lease of Facilities Within City's Rights -of -Way. Company shall have the right to lease, license or otherwise grant to a party other than Company the use of its facilities within the City's Public Rights - of -Way provided: (i) Company first notifies the City of the name of the lessee, licensee or user; the type of service(s) intended to be provided through the facilities; and the name and telephone number ' of a contact person associated with such lessee, licensee or user; (ii) Company makes the franchise fee payment due on the revenues from such lease or license pursuant to Sections 1.8 and 8 of this Ordinance; and (iii) Company receives compensation and/or revenue for such license or lease for which Company pays a franchise fee to the City. This authority to Lease Facilities within City's Ordinance No. 2404-5-05, Page 4 Public Rights -of -Way shall not affect any such lessee, licensee or users obligation, if any, to pay franchise fees. SECTION 3. Term of Franchise. This Ordinance shall become effective on June 28, 2005, after its final passage, in accordance with the provisions for acceptance contained in Section 18. This Franchise Agreement shall terminate on June 30, 2010, unless earlier terminated by either party in accordance with the provisions herein. Upon mutual agreement of the parties, the term of this Franchise Agreement shall be renewed for two additional terms of five (5) years each on the same terms and conditions as set forth herein or as agreed to by the parties unless either party provides 180 day written notice of intent to renegotiate the Franchise Agreement to the other party. SECTION 4. Public Rights -of -Way and Construction. Company's use of Public Rights -of -Way shall be subject to the Right -of -Way Management Ordinance and subject to the provisions of Section 2.5. SECTION 5. Relocation of Company Facilities. 5.1 The City reserves the right for any reason whatsoever to change the grade of, construct, install, repair, alter, maintain, relocate, modify, close, reduce, or widen (together, "change") any Public Right -of -Way, within the present or future limits of the City, and at the City's request the Company shall at the Company's own cost and expense relocate or remove its pipelines, equipment, mains, laterals, and other facilities located within the Public Right -of -Way to another part of the Public Right -of -Way. The Company shall be responsible for conforming its facilities within mutually agreed upon time limits. If no time limits can be agreed upon, the time limit shall be ninety (90) days from the day the City secures any additional Public Right -of -Way and transmits final plans and ' notice to make the alterations. The Company shall be responsible for any direct costs associated with project delays associated with failure to conform facilities within the mutually agreed upon time limits. Reimbursement for all costs provided for by this paragraph shall be made within thirty (30) calendar days. When the Company is required by City to remove or relocate its pipelines, equipment, mains, laterals, and/or other facilities to accommodate such change of any Public Right - of -Way, and Company is eligible under federal, state, county, local or other programs for reimbursement of costs and expenses incurred by Company as a result of such removal or relocation, and such reimbursement is required to be handled through the City, Company costs and expenses shall be included in any application by the City for reimbursement, if Company submits its cost and expense documentation to the City prior to the filing of the application. City shall provide reasonable notice to Company of the deadline for Company to submit documentation of the costs and expenses of such relocation to City. If the Company is required by the City to remove or relocate its pipelines, equipment, mains, laterals, and/or other facilities for any reason other than such change of or to any Public Right -of -Way, Company shall be entitled to reimbursement from the City or others of the cost and expense of such removal or relocation. When Company is required to remove or relocate its pipelines, equipment, mains, laterals and/or other facilities to accommodate modification of any Public Right -of -Way without reimbursement, Company shall have the right to seek recovery of relocation costs as provided for in applicable state and/or federal Law, including without limitation, Section 104.112 of the Texas Utilities Code, as it may be amended from time to time. 5.2 Abandonment If City abandons any Public Right -of -Way in which Company has facilities, the abandonment and quit claim is without prejudice to any and all improvements, facilities, equipment or lines of any public utility, municipal or otherwise, if any, which are presently located within any ' portion of the Public Rightof-Way. Company shall have the continued right to locate, maintain, repair, reconstruct, preserve or relocate improvements, facilities, equipment or lines in such portion of the Public Right -of -Way. If the party to whom the Public Right -of -Way is abandoned requests Company to remove or relocate its facilities, such removal or relocation shall be done within a Ordinance No. 2404-5-05, Page 5 reasonable time at the expense of the party requesting the removal or relocation. If relocation cannot practically be made to another Public Right -of -Way, the expense of any right-of-way acquisition ' shall be considered a relocation expense to be reimbursed by the party requesting the relocation. SECTION 6. Liability Insurance. 6.1 Company shall obtain, maintain, and provide insurance in the amounts, types and coverages in accordance with the City's Right -of -Way Management Ordinance, as amended; provided, however, that Company may instead meet the insurance requirements of the Right -of -Way Management Ordinance either by a City approved formal plan of self-insurance maintained in accordance with sound accounting and risk -management practices or by obtaining insurance as follows: A. Commercial general or excess liability coverage on a claims made basis with minimum limits of five million dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) aggregate. This coverage shall include the following: (1) Completed operations to be maintained for one (1) year. (2) Personal and advertising injury. (3) Contractual liability. (4) Explosion, collapse, or underground (XCU) hazards. ' B. Automobile liability coverage with a minimum policy limit of one million dollars ($1,000,000) combined single limit. This coverage shall include all owned, hired and non - owned automobiles. C. Workers compensation and employers liability coverage. Statutory coverage limits for Coverage A and at least five hundred thousand dollars ($500,000) Coverage B employers' liability is required. D. Each of Company's contractors and subcontractors applying for a permit shall obtain, maintain, and provide proof of insurance for the same types of insurance coverages outlined in Subsection A above; however, the minimum policy limits under the Commercial General Liability insurance shall be $1,000,000 per occurrence and $2,000,000 aggregate. All other coverage provisions outlined in Subsection A shall apply. 6.2 The Company will provide proof of insurance in accordance with this Franchise Agreement within 30 days of the Effective Date. Company will not be required to furnish separate proof when applying for permits. SECTION 7. Indemnification and Liability for Damages. 7.1 In consideration of the granting of this Franchise, Company agrees to indemnify, defend, and hold harmless the City, its officers, agents and employees (the "hrdemnities") from and against all suits, actions or claims of injury to any person or persons, or damages to any property brought or made for or on account of any death, injuries to, or damages received or sustained by any person or persons or for damage to or loss of property arising out of, or occasioned by Company's intentional and/or negligent acts or omissions in connection with Company's operations; except that the indemnity provided for in this paragraph shall not apply to any liability determined by a court of competent Ordinance No. 2404-5-05, Page 6 jurisdiction to have resulted from the sole negligence or intentional acts or omissions of the City, its officers, agents and employees. In the event of joint and concurrent negligence or fault of both the ' Company and the City, responsibility and indemnity, if any, shall be apportioned comparatively in accordance with the laws of the State of Texas without, however, waiving any governmental immunity available to the City under Texas Law and without waiving any of the defenses of the parties under Texas Law. Further, in the event of joint and concurrent negligence or fault of both the Company and the City, responsibility for all costs of defense shall be apportioned between the City and Company based upon the comparative fault of each. 7.2 In fulfilling its obligation to defend and indemnify City, Company shall have the right to select defense counsel, subject to City's approval, which will not be unreasonably withheld. Company shall retain defense counsel within seven (7) business days of City's written notice that City is invoking its right to indemnification under this Contract. If Company fails to retain Counsel within such time period, City shall have the right to retain defense counsel on its own behalf, and Company shall be liable for all defense costs incurred by City, except as set out in Section 7.1. SECTION 8. Compensation to the City. 8.1 Franchise Fee. In consideration of the grant of this Franchise by the City and as full payment for the right, privilege and franchise of using and occupying the said Public Rightof-Way for Company's Gas Distribution System, and in lieu of any and all occupation taxes, assessments, municipal charges, fees, easement taxes, franchise taxes, license, permit and inspection fees or charges associated only within the Public Rightof--Way; street taxes, street or alley rentals, bonds, and all other taxes, charges, levies, fees and rentals of whatsoever kind and character which the City may impose or hereafter be authorized or empowered to levy and collect, excepting only the usual general or special ad valorem taxes which the City is authorized to levy and impose upon real and personal property, sales and use taxes, and special assessments for public improvements, Company shall pay to the City throughout the term of this Franchise Agreement the following: A. The franchise fee due from Company, including the fees based on CIRC, shall be a sum equal to four percent (4%) of Company's Gross Revenues, as defined in Section 1.8. Payments under this Franchise Agreement shall be made by the following schedule: Period Company Collected Gross Revenues Franchise Payment Due Date January 1 — March 31 April 30 April 1 — June 30 July 31 July 1- September 30 October 31 October 1 —December 31 January 31 B. Fees based on CIRC shall be calculated only on CIAC collected by Company after the Effective Date of this ordinance. 8.2 With each quarterly payment of compensation, Company shall furnish to the City a statement, executed by an authorized officer of Company or designee, providing the amount of Gross Revenues for the period covered by the payment for each category and type of services identified, and any other category of revenue as defined in Sections 1.8, 2.9 and 8. Company shall also provide the total amount of Gross Revenues received by Company from persons or entities leasing facilities or ' delivering any service other than gas directly to retail customers through Company's Gas Distribution System that is located in the Public Rightof--Way for the period covered by the payment. Ordinance No. 2404-5-05, Page 7 ' 8.3 If either party discovers that Company has failed to pay the entire or correct: amount of compensation due, the correct amount shall be determined and the City shall be paid by Company within thirty (30) calendar days of such discovery. Any overpayment to the City through error or otherwise shall be refunded within thirty (30) days of discovery, or at the option of the City, offset against the next payment due from Company. Acceptance by the City of any payment due under this Franchise Agreement shall not be deemed to be a waiver by the City of any breach of this Franchise Agreement occurring prior thereto, nor shall the acceptance by the City of any such payments preclude the City from later establishing that a different amount is due or from collecting any outstanding amount due the City. 8.4 Interest on late or delinquent payments, or on overpayments to the City, shall be calculated in accordance with the interest rate for customer deposits established by the Public Utility Commission of Texas in accordance with Texas Utilities Code Section 183.003 as amended for the time period involved. 8.5 No taxes, fees, or other payments by Company to the City, including, but not limited to, ad valorem taxes, shall reduce the Franchise Fees payable to City hereunder. Nothing in this Franchise Agreement shall be construed to prohibit the City from levying the usual general or special ad valorem taxes which the City is authorized to levy and impose upon real and personal property, general sales and use tax, and assessments for public improvements. 8.6. If Company should at any time after the effective date of this Ordinance agree to a new municipal franchise ordinance, or renew an existing municipal franchise ordinance, with another municipality, which municipal franchise ordinance determines the franchise fee owed to that municipality for the ' use of its public rights-of-way in a manner that, if applied to the City, would result in a franchise fee greater than the amount otherwise due City under this Ordinance, then the franchise fee to be paid by Company to City pursuant to this Ordinance shall be increased so that the amount due and to be paid is equal to the amount that would be due and payable to City were the franchise fee provisions of that other franchise ordinance applied to City. The provisions of this Section 8.6 apply only to the method used to calculate the amount of the franchise fee to be paid (specifically, the calculation based on a percentage of Gross Revenues) and do not apply to other franchise fee payment provisions, including without limitation the timing of such payments. 8.7. Company may file with the City a tariff amendment(s) to provide for the recovery of the franchise fees under this agreement City agrees that (i) as regulatory authority, it will adopt and approve the ordinance, rates or tariff which provide for 100% recovery (or such lesser amount requested by Company) of such franchise fees as part of Company's rates; (ii) if the City intervenes in any regulatory proceeding before a federal or state agency in which the recovery of Company's franchise fees is an issue, the City will take an affirmative position supporting 100% recovery of such franchise fees by Company and; (iii) in the event of an appeal of any such regulatory proceeding in which the City has intervened, the City will take an affirmative position in any such appeals in support of the 100% recovery of such franchise fees by Company. City agrees that it will take no action, nor cause any other person or entity to take any action, to prohibit the recovery of such franchise fees by Company. SECTION 9. Accountine Matters. 9.1 Maintenance of Records. Company shall keep accurate books of account at its principal office ' (currently located in Corinth, Texas), for the purpose of determining the amount due to the City under this Franchise Agreement. Ordinance No. 2404-5-05, Page 8 9.2 Audit. The City may conduct an audit or other inquiry in relation to a payment made by Company. As a part of the audit process, the City or City's designee may inspect Company's books of accounts relative to the City at any time during regular business hours and on ten (10) business days prior written notice. The City or City's designee may also request the amount of the sale of gas service provided to each class of customer in the City and the type of service delivered for any additional service distributed directly to customers through Company's Gas Distribution System that is located in the City's Public Rights -of -Way and for which Company receives compensation. 9.3 Access to Records. All records deemed by City or City's designee to be reasonably necessary for such audit shall be made available by Company at Company's corporate office (currently located in the City of Corinth). Company agrees to give its full cooperation in any audit and shall provide complete responses to inquiries within twenty (20) calendar days of a written request, unless a different schedule is agreed to by the City and Company. A. If as the result of any City audit, Company is refunded/credited for an overpayment, or pays the City for an underpayment, of the Franchise Fee, such refand/credit or payment shall be made pursuant to the terms established in Sections 8.3 and 8.4. B. If as a result of a subsequent audit, initiated within two years of an audit which resulted in Company making a payment to the City due to an underpayment of the Franchise Fee of more than 5%, Company makes another payment to the City due to an underpayment of the Franchise Fee of more than 5%, then Company shall reimburse City for the cost of the subsequent audit. ' 9.4 The City agrees to maintain the confidentiality of any non-public information obtained from Company to the extent allowed by law. City shall not be liable to Company for the release of any information the City is required to release by law. City shall provide notice to Company of any request for release of non-public information prior to releasing the information so as to allow Company adequate time to pursue available remedies for protection. If the City receives a request under the Texas Public Information Act that includes Company's proprietary information, City will notify the Texas Attorney General of the proprietary nature of the document(s). The City also will provide Company with a copy of this notification, and thereafter Company is responsible for establishing that an exception under such Act allows the City to withhold the information. 9.5 The omission by the City to exercise its rights to an audit shall not constitute waiver of such right. SECTION 10. Gas Service. 10.1 Company may make and enforce reasonable charges, rules and regulations for gas supplies and service rendered in the conduct of its business, including a charge for services rendered in the inauguration of gas service. Company may require, before furnishing service, the execution of a contract for such service. Company shall have the right to contract with each customer with reference to the installation of, and payment for, any and all of the gas piping from the connection thereof with the Company's main in the Public Right -of -Way to and throughout the customer's premises. Company shall own, operate and maintain all service lines, which are defined as the supply lines extending from the Company's main to the customer's meter where gas is measured by Company. The customer shall own, operate, and maintain all yard lines and house piping. Yard ' lines are defined as the supply lines extending from the point of connection with Company customer meter to the point of connection with customer's house piping. Ordinance No. 2404-5-05, Page 9 10.2 Company shall be entitled to require from each and every customer of gas, before gas service is commenced or reinstated, a deposit in an amount calculated pursuant to the Company's Quality of ' Service Rules as may be in effect during the term of this Franchise Agreement. Said deposit shall be retained and refunded in accordance with such Quality of Service Rules and shall bear interest, as provided in Chapter 183 of the Texas Utilities Code as it may be amended from time to time. Company shall be entitled to apply said deposit, with accrued interest to any indebtedness owed Company by the customer making the deposit. 10.3 Company shall be required to extend its existing distribution mains in any Public Rights -of -Way up to one hundred feet (100') under normal conditions for any one residential customer, only if such customer, at a minimum, uses gas for ansupplemented space heating and water heating. Company shall not be required to extend transmission mains in any Public Rights -of -Way within City or to make a tap on any transmission main within City unless Company agrees to such extension by a written agreement between Company and a customer. 10.4 Company shall famish reasonably adequate service to the public at reasonable rates and charges therefore; and Company shall install, repair, maintain and replace its System in a good and workmanlike manner. 10.5 Quality of Service. Company shall comply with Quality of Service Regulations on file with the Railroad Commission of Texas, as amended from time to time. SECTION 11. Right of Reneeotiation. 1I, 1 Should either Company or the City have cause to believe that a change in circumstances relating to the terms of this Franchise Agreement may exist, it may request that the other party provide it with a reasonable amount of information to assist in determining whether a change in circumstances has taken place. 11.2 Should either party hereto determine that based on a change in circumstances, it is in the best interest to renegotiate all or some of the provisions of this Franchise Agreement, then the other party agrees to enter into good faith negotiations. Said negotiations shall involve reasonable, diligent, and timely discussions about the pertinent issues and a resolute attempt to settle those issues. The obligation to engage in such negotiations does not obligate either party to agree to an amendment of the Franchise Agreement as a result of such negotiations. A failure to agree does not show a lack of good faith. If, as a result of renegotiation, the City and Company agree to a change in a provision of this Ordinance, the change shall become effective upon passage of an Ordinance by the City in accordance with the City Charter and acceptance of the amendment by Company. SECTION 12. Defaults. 12.1 Events of Default The occurrence, at any time during the tern of the Franchise Agreement, of any one or more of the following events, shall constitute an Event of Default by Company under this Franchise Agreement: A. The failure of Company to pay the Franchise Fee on or before the due dates specified herein. ' B. Company's substantial breach or violation of any of the material terms contained herein. Ordinance No. 2404-505, Page 10 12.2 Uncured Events of Default. ' A. Upon the occurrence of an Event of Default which can be cured by the immediate payment of money to the City or a third party, Company shall have thirty (30) calendar days after written notice from City of an occurrence of such Event of Default to cure same before City may exercise any of its rights or remedies provided in Section 13. B. Upon the occurrence of an Event of Default by Company which cannot be cured by the immediate payment of money to City or a third party, Company shall have ninety (90) calendar days (or such additional time as agreed to by the City) after written notice from City of an occurrence of such Event of Default to core same before City may exercise any of its rights or remedies provided for in Section 13. C. If any Event of Default is not cured within the time period allowed for curing the Event of Default as provided for herein, such Event of Default shall, without additional notice, become an Uncured Event of Default, which shall entitle City to exercise the remedies provided for in Section 13. SECTION 13. Remedies. 13.1 Remedies: Upon the occurrence of any Uncured Event of Default as described in Section 12.2, City shall be entitled to exercise any and all of the following cumulative remedies: A. The commencement of an action against Company for monetary damages. ' B. The commencement of an action in equity seeking injunctive relief or the specific performance of any of the provisions that, as a matter of equity, are specifically enforceable. C. The termination of this Franchise Agreement in accordance with the provisions of Section 14. 13.2 Remedies Not Exclusive: The rights and remedies of City and Company set forth in this Franchise Agreement shall be in addition to, and not in limitation of, any other rights and remedies provided by law or in equity. City and Company understand and intend that such remedies shall be cumulative to the maximum extent permitted by law and the exercise by City of any one or more of such remedies shall not preclude the exercise by City, at the same or different times, of any other such remedies for the same Uncured Event of Default. However, notwithstanding this Section or any other provision of this Franchise Agreement, City shall not recover both liquidated damages and actual damages for the same Uncured Event of Default, either under this Section or under any other provision of this Franchise Agreement. SECTION 14. Termination. In accordance with the provisions of Section 13.1(C), this Franchise Agreement may be terminated upon thirty business days prior written notice to Company. Such notice must (i) fairly and fully set forth in detail each of the alleged acts or omissions of Company that the City contends constitutes a substantial breach of any material provision hereof or any other Event of Default, (ii) designate which of the terms and conditions ' hereof the City contends Company breached, and (iii) specify the date, time, and place at which a public hearing will be held by the governing body of the City for the purpose of determining whether the allegations contained in the notice did in fact occur, provided, however, that the date of such hearing may not be less than thirty (30) days after the date of such notice. Company shall have the right to appear before the City Ordinance No. 24045-05, Page I I Council in person and/or by counsel and raise any objections or defenses Company may have that are ' relevant to the proposed forfeiture or termination. Within ten 11 "1 days following the adjournment of the public hearing, the City must deliver to Company, by certified or registered mail, a certified copy of the Ordinance setting forth the acts and omissions of Company described in the first notice that the governing body of the City determined to have in fact occurred and the specific terms and conditions of this Ordinance listed in the first notice that the governing body of the City determines have in fact been breached by such acts or omissions of Company. The final decision of the City Council may be appealed to any court or regulatory authority having jurisdiction. Upon timely appeal by Company of the City Council's decision terminating the Franchise Agreement, the effective date of such termination shall be either when such appeal is withdrawn or a court order upholding the termination becomes final and unappealable. Until the termination becomes effective the provisions of this Franchise Agreement shall remain in effect for all purposes. SECTION 15. Assignment. The rights granted by this Franchise Agreement inure to the benefit of Company and any parent, subsidiary, affiliate now or hereafter existing. Upon assignment to such parent, subsidiary or affiliate, such parent, subsidiary or affiliate assumes all obligations of Company hereunder and is bound to the same extent as Company hereunder. Company shall give the City written notice of any such assignment to a parent, subsidiary, or affiliate. In the event Company requests assignment to someone other than a parent, subsidiary or affiliate, such required assignment is to be evidenced by an ordinance of the City Council of the City that fully recites the terms and conditions, if any, upon which assignment is given and passage of such ordinance by City shall not be unreasonably delayed or withheld. Company shall give the City sixty (60) days prior written notice of such request for assignment to someone other than a parent, subsidiary or affiliate. ' SECTION 16. Notices. 16.1 All notices required by this Franchise Agreement shall be in writing and delivered personally or transmitted (a) through the United States mail, by registered or certified mail, postage prepaid; (b) by means of prepaid overnight delivery service; or (c) by facsimile or email transmission, if a hard copy of the same is followed by delivery through the U.S. mail or by overnight delivery service as just described, addressed as follows: If to the City: City of Allen Attn: City Manager's Office 305 Century Parkway Allen, TX 75013 With a Coov to: City of Allen Atm: City Attorney's Office 1800 Lincoln Plara 500 North Akard Street Dallas, TX 75201 Ordinance No. 2404-5-05, Page 12 If to Cow : CoSery Gas, Ltd. Atm: Don Leverty 7701 S. Stemmons Corinth, TX 76210 Ordinance No. 2404-5-05, Page 12 ' 16.2 Date of Notices; Changing Notice Address. Notices shall be deemed given: (a) upon receipt in the case of personal delivery; (b) three (3) days after deposit in the mail; or (c) the next day in the case of facsimile or overnight delivery. From time to time, either party may designate another address for this purpose by written notice to the other party delivered in the manner set forth above. SECTION 17. Miscellaneous. 17.1 Amendment of Franchise Agreement This Franchise Agreement may not be amended except pursuant to an Ordinance adopted by the City and agreed to by Company. 17.2 Governing Law. The laws of the State of Texas shall govern the interpretation, validity, performance and enforcement of this Franchise Agreement. 17.3 Force Majeure. In the event that the performance by either party of any of its obligations or undertakings hereunder shall be interrupted or delayed by an act of God or the result of war, riot, civil commotion, sovereign conduct, or the act or conduct of any person or persons not party or privy hereto, then such party shall be excused from performance for a period of time as is reasonably necessary after such occurrence to remedy the effects thereof, and each party shall bear the cost of any expense it may incur due to the occurrence. 17.4 Exhibits. All exhibits referred to in this Franchise Agreement and any addenda, attachments, and schedules which may from time to time be referred to in any duly executed amendment to this Franchise Agreement are by such reference incorporated in this Franchise Agreement and shall be ' deemed a part of this Franchise Agreement. 17.5 Successors and Assigns. This Franchise Agreement is binding upon the successors and permitted assigns of the parties. 17.6 Consent Criteria. In any case where the approval or consent of one party hereto is required, requested or otherwise to be given under this Franchise Agreement, such party shall not unreasonably delay or withhold consent. 17.7 Waiver of Breach. The waiver by either party of any breach or violation of any provision of this Franchise Agreement shall not be deemed to be a waiver or a continuing waiver of any subsequent breach or violation of the same or any other provision of this Franchise Agreement. 17.8 All Ordinances of the City of Allen, Collin County, Texas, in conflict with the provisions of this ordinance be, and the same are hereby, repealed; provided, however, that all other provisions of said ordinances not in conflict with the provisions of this Ordinance shall remain in full force and effect. 17.9 Should any word, sentence, paragraph, subdivision, clause, phrase or section of this Ordinance, as amended hereby, be adjudged or held to be void or unconstitutional, the same shall not affect the validity of the remaining portions of said ordinance, which shall remain in full force and effect. 17.10 An offense committed before the effective date of this Ordinance is governed by prior law and the Code of Ordinances of the City of Allen, as previously amended, in effect when the offense was ' committed and the former law is continued in effect for this purpose. SECTION 18. Effective Date. This Ordinance shall become effective on June 28, 2005, after its final passage. Prior to the first and third reading by the City Council, Company shall provide written notification Ordinance No. 2404-5-05, Page 13 I to the City indicating acceptance of this Ordinance contingent upon no amendments or changes to the document as submitted. Prior to July 31, 2005, Company shall file with the City Secretary its final written acceptance of this Ordinance. DULY PASSED AND APPROVED ON THE FIRST READING BY_fIE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE �'/- DAY OF 2005. DULY PASSED AND APPROVED ON THE SECOND READING BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE /N*' DAY OF —Qk"- , 2005. DULY PASSED AND APPROVED ON THE THIRD READING BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE anDAY OF C ��.�_ ".2005. APPROVED: APPROVED AS TO FORM: 4�� zjyp Peter G. Smith, erry ATTORNEY 'Stepten Terreii, MAYOR ATTEST: Shelley B. Georjr,C, CI'I'1' ACRETARY Ordinance No. 2404-5-05, Page 14