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3.5. Relocation of facilities in Public Ways. The Company shall promptly and at its own expense, <br />with due regard for seasonal working conditions, permanently remove and relocate its Facilities in the Public <br />Ways when it is necessary to prevent interference, and not merely for the convenience of the City, in connection <br />with: (1) a present or future local government use of the Public Way for a public project, including a City Utility <br />System, (2) the public health or safety; or (3) the safety and convenience of travel over the Public Ways. If such <br />relocation is done without an agreement first being made as to who shall pay the relocation cost, the Company's <br />relocation of the Facilities shall not be considered a waiver of any right to be reimbursed for the relocation cost. If <br />the Company claims that it should be reimbursed for a relocation cost, it shall notify the City within thirty (30) days <br />of receipt of such order. <br />3.6. Relocation of Facilities in Public Ground. The City may require the Company to relocate <br />Facilities within or remove Facilities from Public Ground upon a finding by the City that the Facilities have <br />become or will become a substantial impairment of the public use or enjoyment of current or planned use of the <br />Public Ground The relocation or removal will be at the Company's expense when the City properly exercises its <br />police power. The Company does not waive its rights under an existing easement or prescriptive right in the <br />Public Ground The City will not require the removal of abandoned Gas Facilities in Public Ground, unless those <br />Facilities have become or will become a substantial impairment of the public use or enjoyment of the Public <br />Ground. <br />3.7. Street Improvements, paving or Resurfacing. The City shall give the Company reasonable <br />written Notice ofplans for street improvements where paving orrestufacing of a permanent nature is involved <br />The Notice shall contain the nature and character of the improvements, the streets upon which the improvements <br />are to be made, the extent of the improvements and the time when the City will start the world and, if more than <br />one street is involved, the order in which this work is to proceed. The Notice shall be given to the Company a <br />sufficient length of time, considering seasonal working conditions, in advance of the actual commencement of the <br />work to permit the Company to make any additions, alterations or repairs to its Facilities the Company deems <br />necessary. <br />SECTION 4. FRANCHNE FEE. <br />4.1. Form. During the term of the franchise hereby granted, and in addition to permit fees being <br />imposed or that the City has a right to impose, the City may charge the Company a franchise fee. The fee may be <br />(i) a percentage of gross revenues received by the Company for its operations within the City, or (ii) a flat fee per <br />customer based on metered service to retail customers within the City or on some other similar basis, or (iii) a fee <br />based on units of energy delivered to any class of retail customers within the corporate limits of the City. The <br />formula for a franchise fee based on units of energy delivered may incorporate both commodity and demand units. <br />The method of imposing the franchise fee, the percentage of revenue rate, or the flat rate on the per unit rate may <br />differ for each customer class or combine the methods described in (i) — (iii) above in assessing the fee. The City <br />shall seek to use a formula that provides a stable and predictable amount of fees, without placing the Company at a <br />competitive disadvantage. If the Company claims that the City -required fee formula is discriminatory or otherwise <br />places the Company at a competitive disadvantage, the Company shall provide a formula that will produce a <br />substantially similar fee amount to the City and reimburse the City's reasonable fees and costs in reviewing the <br />formula The City will attempt to accommodate the Company but is under no franchise obligation to adopt the <br />Company- proposed franchise fee formula <br />4.2. Separate Ordinance. The franchise fee shall be imposed by separate ordinance duly adopted by <br />the City Council, which ordinance shall not be adopted until at least 60 days after written notice enclosing such <br />proposed ordinance has been served upon the Company by certified mail. The fee shall not become effective until <br />JMS-162951 <br />MU210-14 <br />