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HomeMy WebLinkAbout2012-009 Council Ordinancesls` Reading: November 13, 2012 Publication: nPcPmhPr 4, 701 2 2°d Reading: November 26 . 201 2 Effective: January 3 , 201 3 Circle Pines/Centennial Utilities Gas Franchise Ordinance CITY OF LINO LAKES, ANOKA COUNTY, MINNESOTA ORDINANCE NO. 09-12 AN ORDINANCE GRANTING TO CIRCLE PINES UTILITES, DBA CENTENNIAL UTILITIES, A MINNESOTA MUNICIPAL CORPORATION, ITS PERMITTED SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIVATE USE AND TO USE THE PUBLIC WAYS AND PUBLIC GROUND OF THE CITY OF LINO LAKES, MINNESOTA, FOR SUCH PURPOSE; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF LINO LAKES ORDAINS: SECTION 1. DEFINITIONS For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Lino Lakes, County of Anoka, State of Minnesota. City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals, but excluding facilities for providing heating, lighting, or other forms of energy. Commission. The Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government, which preempts all or part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission. Company. Circle Pines Utilities DBA Centennial Utilities, a Municipal corporation, its successors and assigns permitted by the City including all successors or assigns that own or operate any part or parts of the Gas Facilities or system subject to this Franchise. Franchise or Ordinance. This Ordinance, which grants the Franchise to the Company to provide retail natural gas service to customers in the City under the terms and conditions herein. Gas Facilities or System. Gas transmission and distribution pipes, lines, ducts, fixtures, and all necessary equipment and appurtenances owned or operated by the Company for the purpose of providing gas energy for public or private use in the City. 1 Notice. A writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to Administrator, 200 Civic Heights Circle, Circle Pines, Minnesota 55014. Notice to the City shall be mailed to City Administrator, City of Lino Lakes, 600 Town Center Pkwy, Lino Lakes, MN 55014. Either party may change its respective address for the purpose of this Ordinance by Notice to the other parties. Public Ground. Land owned or otherwise controlled by the City for park, open space or similar public purpose, which is not a Public Way but is held for use in common by the public. Public Way. Any public right-of-way within the City as defined by Minnesota Statutes, Section 237.162, subd. 3. SECTION 2. ADOPTION OF FRANCHISE 2.1. Grant and Acceptance of Franchise. City hereby grants Company, for a period of twenty (20) years from the date this Ordinance is passed and approved by the City, the nonexclusive right to import, manufacture, distribute and sell gas for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. This right includes the provision of Gas that is (i) manufactured by the Company or its affiliates and delivered by the Company, (ii) purchased and delivered by the Company or (iii) purchased from another source by the retail customer and delivered by the Company. For these purposes, Company may construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to such lawful regulations as may be adopted by separate ordinance. The Company accepts the grant and agrees to comply with this Ordinance. 2.2 Effective Date: Written Acceptance. This franchise agreement shall be in force and effect from and after approval of this Ordinance, its acceptance by Company, and its publication as required by law. The City by Council resolution may revoke this franchise agreement if Company does not file a written acceptance with the City within 90 days after publication. 2.3. Publication Expense. Company shall pay the expense of a summary publication of this Ordinance. 2.4. Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder or is otherwise in breach of the Franchise, the complaining party shall notify the other party in writing of the default and the desired remedy. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within thirty (30) days of the Notice, the parties may mediate by jointly selecting a mediator to facilitate further discussion. The parties will equally share the fees and expenses of the mediator. If either party objects to use of a mediator or a mutually acceptable mediator cannot be obtained, either party may commence an action in Anoka County District Court to interpret and enforce this Franchise and/or seek such other relief as permitted by law or equity. 2.5 Continuation of Franchise. If the City and the Company are unable to agree on the 2 terms of the new franchise by the expiration of the term set forth in Section 2.1, the Franchise shall automatically continue based on the same terms for a period of no more than one year but may be terminated with or without cause by either party upon ninety (90) days written notice. SECTION 3. LOCATION, OTHER REGULATIONS 3.1. Location of Facilities. Gas Facilities shall be located, constructed, and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt the operation of any City Utility System. Gas Facilities may be located on or in Public Grounds as determined by the City and as they presently exist on the date of the adoption of this ordinance. Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Gas Facilities shall be subject to other reasonable regulations of the City consistent with authority granted to the City to manage its Public Ways and Public Grounds under state law, and to the extent not inconsistent with a specific term of this Franchise. 3.2. Public Ground, Public Way Openings. Company shall not open or disturb the surface of any Public Way or Public Ground for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee. Company may, however, open and disturb the surface of any Public Way or Public Ground without a permit if (i) an emergency exists requiring the immediate repair of Gas Facilities and (ii) Company gives telephone, email or similar notice to the City before commencement of the emergency repair, if reasonably possible. Within two (2) business days after commencing the repair, Company shall apply for any required permits and pay any required fees. 3.3. Restoration. After undertaking any work requiring the opening of any Public Way, the Company shall restore the Public Way in accordance with Minnesota Rules, Part 7819.1100 and applicable City ordinances. Company shall restore the Public Ground to a condition as good as formerly existed, and shall maintain the restoration in good condition for two years thereafter. All work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in the said condition, the City shall have the right, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, to make the restoration of the Public Ground at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.3. 3.4. Avoid Damage to Gas Facilities. The Company must take reasonable measures to prevent Gas Facilities from causing damage to persons or property. The Company must take reasonable measures to protect the Gas Facilities from damage that could be inflicted on the Gas Facilities by persons, property, or the elements. The Company must take protective measures when the City performs work near the Gas Facilities, if given reasonable notice by the City of such work prior to its commencement. The City must take reasonable measures to prevent damage to the Gas Facilities or system during any work performed by the City; its staff or its agents. 3.5. Notice of Improvements to Streets. The City will give Company reasonable 3 L Notice of plans for improvements to Public Ways where the City has reason to believe that Gas Facilities may affect or be affected by the improvement. The Notice shall contain: (i) the nature and character of the improvements, (ii) the Public Ways upon which the improvements are to be made, (iii) the extent of the improvements, (iv) time when the City will start the work, and (v) if more than one Public Way is involved, the order in which the work is to proceed. The Notice will be given to Company a sufficient length of time, considering seasonal working conditions, in advance of the actual commencement of the work to permit Company to make any additions, alterations or repairs to its Gas Facilities the Company deems necessary. 3.6. Mapping Information. The Company must promptly provide complete and accurate mapping information for any of its Gas Facilities in accordance with the requirements of Minnesota Rules, Parts 7819.4000 and 7819.4100. 3.7. Relocation in Public Ways. The Company shall comply with Minnesota Rules, Part 7819.3100 and applicable City ordinances consistent with law. SECTION 4. INDEMNIFICATION 4.1. Indemnity of City. Company shall indemnify and hold the City harmless from any and all liability, on account of injury to persons or damage to property occasioned by the unsafe construction, maintenance, repair, inspection, the issuance of permits, or the negligent operation of the Gas Facilities located in the Public Ways and Public Grounds. The City shall not be indemnified for losses or claims occasioned through its own negligence, or otherwise wrongful act or omission, except that the Company shall indemnify and defend the City for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans or work. This franchise agreement shall not be interpreted to constitute a waiver by the Company of any of its defenses of immunity or limitations on liability under Minnesota Statutes, Chapter 466. 4.2. Defense of City. In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if Notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such Notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City. The Company, in defending any action on behalf of the City, shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. This franchise agreement shall not be interpreted to constitute a waiver by the City of any of its defenses of immunity or limitations on liability under Minnesota Statutes, Chapter 466. SECTION 5. VACATION OF PUBLIC WAYS The City shall give Company at least two (2) weeks prior Notice of a proposed vacation of a Public Way. The City and the Company shall comply with Minnesota Rules, Part 7819.3200 and applicable ordinances consistent with law. 4 SECTION 6. CHANGE IN FORM OF GOVERNMENT Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. SECTION 7. FRANCHISE FEE 7.1. Right and Form. A franchise fee shall be imposed by the City upon adoption of this ordinance in an amount equal to two percent of the Company's gross revenue within the City for interruptible customers and four percent of the Company's gross revenue for non - interruptible customers ("Franchise Fee"). The Franchise Fee may be based on the following methods: (i) a percentage of gross revenues received by the Company for its operations within the City, or (ii) a flat fee per customer based on metered service to retail customers within the City or on some other similar basis, or (iii) a fee based on units of energy delivered to any class of retail customers within the corporate limits of the City, or (iv) a fee based on a customer meter charge or other rate design, but not to exceed the percentages specified above. The Franchise Fee shall be effective as of October 1, 2012, and shall apply to all gross revenue earned on or after that date. In the event that all other natural gas providers in the City are required to pay a franchise fee of one percent or more, the City may increase the Franchise Fee paid by the Company by one percent for non -interruptible customers, but in no case will the franchise fee exceed five percent of the Company's gross revenue within the City for non -interruptible customers. 7.2. Collection of Fee. The City acknowledges that the Company may collect the Franchise Fee from customers in the City. The City reserves the right to establish and modify from time to time, the rate design of the fee collected from customers of different classes. Fees shall be payable not less than quarterly during complete billing months of the period for which payment are to be made. The Franchise Fee formula may be changed from time to time; however, the change shall meet the same notice requirements and the fee may not be changed more often than annually, and must comply with the terms of this Ordinance. The Company agrees to make available for inspection by the City at reasonable times all records necessary to audit the Company's Franchise Fee records. 7.3. Continuation of Franchise Fee. If the City and the Company are unable to agree on the terms of a new franchise by the expiration of the term set forth in Section 2.1, the Franchise Fee shall automatically continue based on the same terms for a period of no more than one year unless the Franchise is terminated earlier pursuant to Section 2.5 of this Franchise. SECTION 8. ABANDONED FACILITIES The Company shall comply with City ordinances, Minnesota Statutes, Sections 216D.01 et seq. and Minnesota Rules, Part 7819.3300, as they may be amended from time to time. The Company shall maintain records describing the exact location of all abandoned and retired Facilities within the City, produce such records at the City's request, and comply with the location requirements of Minnesota Statutes, Section 216D.04 with respect to all Gas Facilities, including abandoned and retired Gas Facilities. 5 SECTION 9. ADDITIONAL PROVISIONS OF ORDINANCE 9.1. Severability. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 9.2. Limitation on Applicability. This Ordinance shall not in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of this Franchise or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. 9.3. No Waiver. The Company shall not be excused from performing the terms of this Ordinance due to the City's failure to enforce its rights hereunder. 9.4. Data. All "data" provided to the City in connection with this Franchise shall be governed by the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13. SECTION 10. AMENDMENT PROCEDURE This Ordinance may be amended at any time by the mutual consent of the City and Company by City adoption of an amendatory ordinance, which shall become effective upon Company consent filed with the City within 60 days after the effective date of the amendatory ordinance. SECTION 11. PREVIOUS FRANCHISES SUPERSEDED. This franchise supersedes any previous franchise granted to Company or its predecessor. Adopted by the City of Lino Lakes City Council this 26th day of November 2012. The motion for the adoption of the forgoing ordinance was introduced by Councilmember O' Donnell and duly seconded by Councilmember Roeser and upon vote being taken thereof, the following voted in favor thereof: O'Donnell, Roeser, Rafferty, Stoesz The following voted against same: none Attest: Jeff Reinert, May Juli, nne Bartell, City 6 CITY COUNCIL AGENDA ITEM 3A STAFF ORIGINATOR: Jeff Karlson MEETING DATE: November 26, 2012 TOPIC: Consider 2nd Reading of Ordinance No. 09-12, Granting a Nonexclusive Gas Franchise to Circle Pines/Centennial Utilities VOTE REQIURED: 3/5 INTRODUCTION The City Council is being asked to consider the adoption of Ordinance No. 09-12, granting a nonexclusive gas franchise to Circle Pines/Centennial Utilities for a 20 -year period. The Council approved the first reading of the ordinance on November 13, 2012. BACKGROUND The City's 25 -year franchise agreement with Centennial Utilities expired on March 31, 2012. After several months of negotiations, we were able to reach a settlement with Circle Pines/Centennial Utilities. The new terms include a four percent franchise fee for non -interruptible customers, retroactive to October 1, 2012, which can be increased to a maximum of five percent if Lino Lakes imposes a franchise fee of one percent or more for the other natural gas providers. The previous franchise fee was seven percent. RECOMMENDATION Staff is recommending approval of the 2nd reading of Ordinance No. 09-12, granting a nonexclusive franchise to Circle Pines/Centennial Utilities. ATTACHMENTS Ordinance No. 09-12