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HomeMy WebLinkAboutO-2405-5-05ORDINANCE NO. 2405-5-05 ' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY TEXAS, GRANTING TO ATMOS ENERGY CORPORATION, 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 SEVERABILITY CLAUSE, A SAVINGS CLAUSE AND AN EFFECTIVE DATE. WHEREAS, on December 24, 1953, the City Council of the City of Allen ("City") granted a gas franchise to Lone Star Gas Company to own, operate, and maintain a gas distribution system in City; and, WHEREAS, Atmos Energy Corporation, ("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 August 1, 2003, 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 establishing the conditions under which Atmos 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 "Atmos Energy" shall mean Atmos Energy Corporation, its successors and permitted assigns. 1.3 "Contributions in Aid of Construction" or "CIRC" means monies received for construction of new facilities and facility removal/relocation reimbursements and does not include donated property or reimbursements received for damages to Atmos Energy'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 Atmos Energy to use the Public Rights -of -Way for its Gas Distribution System. 1.6 "Franchise Fee" shall mean the total franchise fees due from Atmos Energy as set forth in Section 8, herein. 1.7 "Gas Distribution System" or "System" shall mean Atmos Energy'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 Fight -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 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; (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 Atmos Energy's monthly Weighted Average Cost of Gas charged to industrial customers in the Mid -Tex division formerly (mown as TXU 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. cbarges 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) gross receipts fees; and (d) revenues from the lease, license or use of Company's facilities in the City Right -of - Way as set forth in Sections 2.9 of this Ordinance. Ordinance No. 2405-5-05, Page 2 (5) "Gross revenues" shall not include: I(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; (c) any interest income earned by the Company; and (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 `Periodic Payment Date" shall mean the following calendar dates of each year during the term hereof, commencing with calendar year 2006: February 15, May 15, August 15 and November 15. If a Periodic Payment Date occurs on a Saturday, Sunday or City holiday, then it shall be deemed to occur on the next weekday on which the City's offices are open for business. 1.10 "Preceding Quarter" means the three-month calendar quarter immediately preceding a Periodic Payment Date and as shown in the following table: Periodic Payment Date Preceding Quarter February 15 October I through December 31 May 15 January 1 through Match 31 August 15 April 1 through June 30 ' November 15 July 1 through September 30 1.11 "Privilege Quarter" means the three-month calendar quarter during which a Periodic Payment Date occurs and as shown in the following table: Periodic Payment Date Privilege Quarter February 15 January 1 through Match 31 May 15 April 1 through June 30 August 15 July 1 through September 30 November 15 October I through December 31 1.12 "Public Right -of -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 tern applies regardless of whether the Public Right -of -Way is paved or unpaved. 1.13 "Railroad Commission of Texas" or "RRC" shall mean the Railroad Commission of the State of Texas or its successor agency. 1.14 "Right -of -Way Management Ordinance" shall mean Ordinance No. 1950-6-01 codified as Article ' 3, Chapter 13 of Code of Ordinances as amended. 1.15 "Transport Customer" means any person or entity for which Atmos Energy transports gas through Ordinance No. 2405-5-05, Page 3 the System of Atmos Energy 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 Authori 2.1 Permission. Subject to the terms and conditions herein, City hereby grants Atmos Energy non- exclusive permission to use and occupy, subject to the terms hereof, the present and future Public Right -of -Way of the City for the purpose of laying, maintaining, constructing, protecting, operating and replacing Atmos Energy's equipment needed and necessary to deliver, transport and distribute gas in, out of, and through said City. Subject to Section 2.9, Atmos Energy shall not use the Public Right -of -Way for any use or purpose other than its use of 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 Atmos Energy 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. 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. Atmos Energy acknowledges that by this Franchise it obtains no rights to, or further use, of the Public Right -of -Way other than those expressly granted herein. Atmos Energy 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 Rigbtof-Way in which Atmos Energy's Gas Distribution System is located in a manner inconsistent with Atmos Energy's use of such Public Rights -of -Way. 2.5 Compliance with Law. Atmos Energy, during the term of this Franchise, 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. 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. 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 Atmos Energy with reasonable notice and opportunity to review and comment upon any new City ordinances that impact Atmos Energy's use of the Public Right -of -Way. In constructing, maintaining and operating the Gas Distribution System, Atmos Energy shall act in a good and workmanlike manner, observing high standards of engineering and workmanship and using materials of good and durable quality. Atmos Energy shall comply in all respects with applicable codes and industry standards. 2.6 Continued Obligations. This Franchise does not relieve Atmos Energy 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 Atmos Energy be Ordinance No. 2405-5-05, Page 4 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 Atmos Energy. 2.8 Fees. Subject to Section 8.1, nothing in this Franchise shall be construed to limit the authority of the City to impose a tax, fee, or other assessment of any kind on any person. Atmos Energy 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 Eease of Facilities Within City's Rights -of -Way. Atmos Energy shall have the right to lease, license or otherwise grant to a party other than Atmos Energy the use of its facilities within the City's public rights-of-way provided: (i) Atmos Energy first notifies the City of the time 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) Atmos Energy Corporation 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) Atmos Energy receives compensation and/or revenue for such license or lease for which Atmos Energy pays a franchise fee to the City. This authority to Lease Facilities within City's Rights -of -Way shall not affect any such lessee, licensee or user's 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 17. This Franchise 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. Atmos Energy'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 Right -of -Way and transmits final plans and notice to make the altemtions. 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 Ordinance No. 2405-5.05, Page 5 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 by City without reimbursement from City, Company shall have the right to seek recovery of relocation costs as provided for in applicable state and/or federal Law. 5.2 Abandonment. If City abandons any Public Right -of -Way in which Atmos Energy has facilities, the abandonment and quitclaim 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 Right -of -Way. Atmos Energy 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 Atmos Energy to remove or relocate its facilities, such removal or relocation shall be done within a 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 Atmos Energy 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 Atmos Energy 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 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 five hundred thousand dollars ($500,000) Coverage B employers' liability is required. Ordinance No. 2405-5-05, Page 6 D. Atmos Energy shall require their contractors and subcontractors to carry insurance consistent with provisions 6. LA and 6. LB and naming Atmos Energy and City as additional insureds. 6.2 The Company will provide proof of insurance in accordance with this franchise within 30 days of the effective date of the franchise. Company will not be required to famish separate proof when applying for permits. SECTION 7. Indemnification And Liability For Damaees. 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 "Indemnities") 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 jurisdiction to have resulted from the sole negligence or intentional acts or omissions of the City, its officers, agents and employces. 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, Atmos Energy shall have the right to select defense counsel, subject to City's approval, which will not be unreasonably withheld. Atmos Energy 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 Atmos Energy fails to retain Counsel within such time period, City shall have the right to retain defense counsel on its own behalf, and Armes Energy 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 Right -of -Way for Armes Energy'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 right-of-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, Atmos Energy shall pay to the City throughout the term of this Franchise Agreement the following: A. On or before July 1, 2005, and as compensation to the City for the rights and privileges granted hereunder for the calendar year 2005, Atmos Energy shall pay a franchise fee to the City in an amount equal to four percent (4%) of Atmos Energy's calendar year 2004 Gross Revenues. Commencing on February 15, 2006, and on each Periodic Payment Date thereafter during the tern of this franchise, Armes Energy will pay a franchise fee to the Ordinance No. 2405-5-05, Page 7 City in an amount equal to four percent (4%) of Atmos Energy's Gross Revenues for the Preceding Quarter as specified in Section 1.10 hereof. A payment made to the City ' hereunder on a Periodic Payment Date is compensation for the rights and privileges granted hereunder for the corresponding Privilege Quarter noted in Section 1.11 hereof. B. Calculation and Payment of Franchise Fees Based on CIAC (1) The franchise fee amounts based on "Contributions in aid of Construction" ("CIAC") shall be calculated on an annual calendar year basis, i.e., from January 1 through December 31 of each calendar year. (2) The franchise fee amounts that are due based on CIRC shall be paid at least once annually on or before April 30 each year based on the total CIRC recorded during the preceding calendar year. 8.2 With each payment of compensation, Atmos Energy shall furnish to the City a statement, executed by an authorized officer of Atmos Energy 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. Atmos Energy shall also provide the total amount of gross revenues received by Atmos Energy from persons or entities leasing facilities or delivering any service other than gas directly to retail customers through Atmos Energy's Gas Distribution System that is located in the Public Right -of -Way for the period covered by the payment. 8.3 If either party discovers that Atmos Energy 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 Atmos Energy 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 Atmos Energy. Acceptance by the City of any payment due under this Franchise shall not be deemed to be a waiver by the City of any breach of this Franchise 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 shall be calculated in accordance with the interest rate for customer deposits established by the PUC 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 Atmos Energy to the City, including, but not limited to, ad valorem taxes, shall reduce the Franchise Fees payable to City hereunder. Nothing in this Franchise 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 Ordinance No. 24055-05, Page 8 Energy adequate time to pursue available remedies for protection. If the City receives a request under the Texas Public Information Act that includes Atmos Energy's proprietary information, City will Ordinance No. 24055-05, Page 9 other franchise ordinance applied to City. The provisions of this Section 8.6 apply only to the amount of the franchise fee to be paid 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 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 Atmos Energy. 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. Atmos Energy shall keep accurate books of account at its principal office in Dallas, Texas, for the purpose of determining the amount due to the City under this Franchise. 9.2 Audit The City may conduct an audit or other inquiry in relation to a payment made by Atmos Energy. As a part of the audit process, the City or City's designee may inspect Atmos Energy'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 far any additional service distributed directly to customers through Atmos Energy's Gas Distribution ' System that is located in the City's Public Rights f --Way and for which Atmos Energy 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 Atmos Energy at Atmos Energy's corporate office in the City of Dallas. Atmos Energy 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 Atmos Energy. A. If as the result of any City audit, Atmos Energy 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 Atmos Energy making a payment to the City due to an underpayment of the Franchise Fee of more than 5%, Atmos Energy makes another payment to the City due to an underpayment of the Franchise Fee of more than 5%, the City may immediately treat this underpayment as an Uncured Event of Default and exercise the remedies provided for in Section 11.1.A -D. 9.4 The City agrees to maintain the confidentiality of any non-public information obtained from Atmos Energy to the extent allowed by law. City shall not be liable to Atmos Energy for the release of any information the City is required to release by law. City shall provide notice to Atmos Energy of any request for release of non-public information prior to releasing the information so as to allow Atmos Energy adequate time to pursue available remedies for protection. If the City receives a request under the Texas Public Information Act that includes Atmos Energy's proprietary information, City will Ordinance No. 24055-05, Page 9 notify the Texas Attorney General of the proprietary nature of the document(s). The City also will provide Atmos Energy with a copy of this notification, and thereafter Atmos Energy is responsible for establishing that an exception under the 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 Atmos Energy 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. Atmos Energy may require, before furnishing service, the execution of a contract for such service. Atmos Energy 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 Atmos Energy. 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 Atmos Energy customer meter to the point of connection with customer's house piping. 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. Said deposit shall be retained and refunded in accordance with such Quality of Service Rules and shall bear interest, as provided in ' Chapter III 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 Atmos Energy shall be required to extend distribution mains in any Public Rights -of -Way up to one hundred feet (100') for any one residential customer, only if such customer, at a minimum, uses gas for unsupplemented space heating and water heating. Atmos Energy 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 Atmos Energy agrees to such extension by a written agreement between Atmos Energy and a customer. 10.4 Atmos Energy shall fumish reasonably adequate service to the public at reasonable rates and charges therefore; and Atmos Energy shall install, repair, maintain and replace its System in a good and workmanlike manner. 10.5 Quality of Service. Atmos Energy shall comply with Quality of Service Regulations on file with the Railroad Commission as amended from time to time. SECTION 11. Riebt Of Reneeotiation. 11.1 Should either Atmos Energy or the City have cause to believe that a change in circumstances relating to the terms of this franchise 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, then the other party agrees to enter into Ordinance No. 2405-5-05, Page 10 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 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 Atmos Energy 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 Atmos Energy. SECTION 12. Defaults. 12.1 Events of Default. The occurrence, at any time during the term of the Franchise, of any one or more of the following events, shall constitute an Event of Default by Atmos Energy under this Franchise: A. The failure of Atmos Energy to pay the Franchise Fee on or before the due dates specified herein. B. Atmos Energy's substantial breach or violation of any of the material terms contained herein. 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, Atmos Energy 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 Atmos Energy which cannot be cured by the immediate payment of money to City or a third party, Atmos Energy 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 cure 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 Atmos Energy 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 Atmos Energy set forth in this Franchise shall be in addition to, and not in limitation of, any other rights and remedies provided by Ordinance No. 2405-5-05, Page 11 law or in equity. City and Atmos Energy 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, 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. 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 Alums Energy. Such notice must (i) fairly and fully set forth in detail each of the alleged acts or omissions of Atmos Energy that the City contends constitutes a substantial breach of any material provision hereof, (ii) designate which of the terms and conditions hereof the City contends Atmos Energy 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. Atmos Energy shall have the right to appear before the City Council in person or by counsel and raise any objections or defenses Atmos Energy may have that are relevant to the proposed forfeiture or termination. Within ten (10) days following the adjournment of the public hearing, the City must deliver to Atmos Energy, by certified or registered mail, a certified copy of the Ordinance setting forth the acts and omissions of Atmos Energy described in the fast 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 Atmos Energy. The final decision of the City Council may be appealed to any court or regulatory authority ' having jurisdiction. Upon timely appeal by Atmos Energy of the City Council's decision terminating the franchise, 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 shall remain in effect for all purposes. SECTION 15. Assignment. The rights granted by this Franchise Agreement inure to the benefit of Atmos Energy 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 Armes Energy hereunder and is bound to the same extent as Atmos Energy hereunder. Atmos Energy shall give the City written notice of any such assignment to a parent, subsidiary, or affiliate. In the event Atmos Energy 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. Alums Energy 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: Ordinance No. 2405-5-05, Page 12 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 Attn: City Attorney's Office 1800 Lincoln Playa 500 North Akard Street Dallas, TX 75201 If to Atmos Enerev: Atmos Energy Corporation Atm: Contracts Administration 5430 LBJ Freeway, Suite 106 Dallas, TX 75240 With a Copy to: Atmos Energy Corporation Atm: General Counsel 5430 LBJ Freeway Suite 1800 Dallas, TX 75240 ' 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 Atmos Energy. 17.2 Goveraing 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 and any addenda, attachments, and schedules ' which may from time to time be referred to in any duly executed amendment to this Franchise are by such reference incorporated in this Franchise and shall be deemed a part of this Franchise. Ordinance No. 2405-5-05, Page 13 17.5 Successors and Assigns. This Franchise 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, 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 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. 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, Atmos Energy shall provide written notification to the City indicating acceptance of this Ordinance contingent upon no amendments or changes to the document as submitted. Prior to July 31, 2005, Atmos Energy shall file with the City Secretary its final written acceptance of this Ordinance. Ordinance No. 2405-5-05, Page 14 DULY PASSED AND APPROVED ON THE FIRST READING BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE jJrM DAY OF /l%a..r. , 2005. `� DULY PASSED AND APPROVED ON THE SECOND READING BY THE CITY COUNCIL OF TjW CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE ,IY&- DAY OF C h4m 0 2005. DULY PASSED AND APPROVED ON THE THIRD READING BY THE CITY CO OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE S� DAY OF k i 2005. APPROVED AS TO FORM: �F"— Peter G. Smith, CITY ATTORNEY APPROVED: /' O—Q p StepheATerrell, MAYOR I:YOY3139 Shelley B. Georg C, CITY SYCRETARY Ordinance No. 2305-5-05, Page I5