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HomeMy WebLinkAbout07-3495 ord43 ORDINANCE NO. 07-3495 AN ORDINANCE GRANTING TO ATMOS ENERGY CORPORATION, WEST TEXAS DIVISION, A TEXAS AND VIRGINIA CORPORATION, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO FURNISH, TRANSPORT AND SUPPLY GAS TO THE GENERAL PUBLIC IN THE CITY OF PLAINVIEW, HALE COUNTY, TEXAS, FOR THE TRANSPORTING, DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID MUNICIPALITY FOR ALL PURPOSES; PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE STREETS, ALLEYS, AND PUBLIC WAYS; REPEALING ALL PREVIOUS ATMOS ENERGY GAS FRANCHISE ORDINANCES; PROVIDING THAT IT SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES; PRESCRIBING THE TERMS, CONDITIONS, OBLIGATIONS AND LIMITATIONS UNDER WHICH SUCH FRANCHISE SHALL BE EXERCISED; A MOST FAVORED NATIONS CLAUSE, AND A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Franchisee asked the City of Plainview, Texas to renew Franchisee's nonexclusive franchise agreement to use and occupy the City's rights- of-way for furnishing, transporting, and supplying gas to the general public of the City, and for transporting, delivering, selling and distributing gas in, out of, and through the City for all purposes stated within this agreement; WHEREAS, the City of Plainview, a home rule municipal corporation, is authorized by state law and the City's Code of Ordinances to adopt one or more nonexclusive franchise ordinances which set reasonable terms and compensation required of utility companies that desire to use public streets, alleys, and rights-of- way for profit; WHEREAS, the construction, installation, maintenance and operation of such a system involves the occupation of and placement of private commercial facilities in the Public Rights-of-Ways with the City; WHEREAS, the City reviewed the Franchisee's performance and quality of service under the prior nonexclusive franchise agreement as well as financial, technical, and legal qualifications of Franchisee in making good faith negotiations to renew the Franchisee's agreement; WHEREAS, the City relied upon and considered the Franchisee's representations and information presented regarding its financial, technical, and legal qualifications as well as its plans for constructing, operating, and maintaining its gas system of transporting, delivering, and selling to the general public as well as in, out of, and through the City for all purposes stated in this agreement; Ordinance No. 07-3495 Atmos Energy Franchise Page 1 of 18 44 WHEREAS, after reviewing and considering such representations and information presented by the Franchisee, the City determined that, subject to the terms and conditions set forth herein, the grant of a new nonexclusive franchise agreement to the Franchisee is in the best interest of the City of Plainview, Texas; and WHEREAS, after review, consideration, and good faith negotiations, the City and Franchisee agreed to abide by the terms and conditions set forth herein. NOW, THEREFORE, The City of Plainview hereby ordains that: SECTION 1. GRANT OF AUTHORITY A. The City of Plainview, Texas, herein after called "City," hereby grants to Atmos Energy Corporation, West Texas Division, hereinafter called "Atmos" or "Company," its successors and assigns, consent to use and occupy the present and future Public Rights-of-Way of the City for the purpose of laying, maintaining, constructing, protecting, operating, and replacing the System needed and necessary to deliver, transport and distribute gas in, out of, and through City and to sell gas to persons, firms, and corporations, including all the general public, within the City's corporate limits. B. Said privilege and license being granted by this Ordinance is for a ten (10) year term commencing on the effective date of this nonexclusive franchise agreement and ending on December 31, 2017. C. The provisions set forth in this Ordinance represent the terms and conditions under which the Company shall construct, operate, and maintain the System within the City, hereinafter sometimes referred to as the "Franchise." In granting this Franchise, the City does not in any manner surrender or waive its regulatory or other rights and powers under and by virtue of the Constitution and statutes of the State of Texas as the same may be amended, nor any of its rights and powers under or by virtue of present or future generally applicable ordinances of the City. Company, by its acceptance of this Franchise, agrees that all such lawful regulatory powers and rights as the same may be from time to time vested in the City shall be in full force and effect and subject to the exercise thereof by the City at any time. SECTION 2. DEFINITIONS For the purposes of this Ordinance, the following terms, phrases, words, and their derivations shall have the meanings given herein. When not inconsistent with the context, words in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is always mandatory and not merely directory. Ordinance No. 07-3495 Atmos Energy Franchise Page 2 of 18 45 A. "Affiliate" shall mean in relation to the Company, a Person that controls, is controlled by, or is under common control with the Company. As used in this definition, the term "control" means, with respect to a Person that is a corporation, the ownership, directly or indirectly, of more than 50% of the voting securities of such Person or, with respect to a Person that is not a corporation, the power to direct the management or policies of such Person, whether by operation of law, by contract or otherwise. B. "City" shall mean the City of Plainview, Texas. C. "City Manager" means City's manager, or his or her designee. D. "Company" shall mean Atmos Energy Corporation, West Texas Division, its successors and assigns, but does not include an Affiliate, which shall have no right or privilege granted hereunder except through succession or assignment in accordance with Section 20. E. "Gross Revenues" shall mean all revenue derived or received, directly or indirectly, from the sale of gas to all classes of customers (excluding gas sold to another gas utility in City for resale to its customers within City) within the corporate limits of City. (1) "Gross revenues" shall include: (a) 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") to the extent these contributions are received by Company and not refunded or credited to customers under the provisions of Company's Quality of Service Regulations; and (b) gross receipts fees; and (c) all revenues derived by Company from the transportation of gas through the System of Company within the City to customers located within the City; and (d) the value of gas transported by Company for Transport Customers through the System of Company located in the City's Public Rights-of-Way ("Third Party Sales") with the value of such gas to be established by utilizing Company's monthly Weighted Average Cost of Gas charged to industrial customers in the West Texas Ordinance No. 07-3495 Atmos Energy Franchise Page 3 of 18 46 division, as reasonably near the time that the transportation service is performed. (2) "Gross revenues" shall not include: (a) the revenue of any Affiliate or other Person, only to the extent that such revenue is also included in Gross Revenues of the Company; and (b) sales taxes; and (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 Public Rights-of-Way. F. "Person" shall mean any natural person, or any association, firm, partnership, joint venture, corporation, or other legally recognized entity, whether for- profit or not-for-profit, but shall not, unless the context clearly intends otherwise, include the City or any employee, agent, servant, representative or official of the City. G. "Public Right-of-Way" shall mean the surface of, and the space above and below public streets, roads, highways, freeways, alleys, courts, boulevards, parkways, drives, curbs, bridges, public easements, public places, public thoroughfares, grounds, and sidewalks of the City, as they now exist or may be hereafter constructed, opened, laid out or extended within the present limits of the City, or in such territory as may hereafter be added to, consolidated or annexed to the City, to which the City holds any property rights in regard to the use for utilities. H. "System" or "System Facilities" shall mean all of the Company's 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 natural gas for heating, lighting, and power, located in the Public Right-of-Way within the corporate limits of the City. I. "Transport Customer" shall mean any Person for which Company transports gas through the System of Company located in the Public Rights-of-Way for delivery within the corporate limits of the City. SECTION 3. CONDITIONS OF OCCUPANCY A. All construction and the work done by Company, and the operation of its business, under and by virtue of this Ordinance, shall be in conformance with the ordinances, rules and regulations now in force and that may hereafter be adopted by the City relating to the use of its Public Rights-of-Way. This Franchise Ordinance 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. Ordinance No. 07-3495 Atmos Energy Franchise Page 4 of 18 47 B. All repair work by the Company in the Public Rights-of-Way shall be warranted by Company for a period of one year from the date the repairs are completed. C. Company shall attempt to utilize the alleys of the City insofar as is reasonably practicable in conducting its work and activities hereunder. Notwithstanding the foregoing, however, Company may, when reasonably necessary, utilize the streets and other Public Rights-of-Way to perform such work and activities. D. Company shall have available for the City of Plainview's use, at any time, a map or maps showing the current locations of all Company's System Facilities located in the City. E. If the City believes that Company has failed to comply with any operational or maintenance standards as required by this Franchise Ordinance, City shall give the Company written notice of such failure to comply. Company shall have the opportunity to cure such failure during a period not to exceed fifteen (15) business days from receipt of the written notice. If the Company fails to cure the alleged failure to comply within the prescribed time period, the Company's alleged failure to comply shall be heard at a public meeting of the City Council. The Company shall be given written notice of the public meeting no later than seventy-two (72) hours prior to the posting date of the agenda for the City Council meeting at which such alleged failure is scheduled to be considered by the Council. The notice to the Company shall include a list of the failures complained of, and Company shall have an opportunity to address the Council at such public meeting. Commencing five (5) calendar days following the adoption of a resolution or an ordinance of the City that finds and determines a failure of Company to comply with operational or maintenance standards as required by this Franchise Ordinance, Company shall pay Five Hundred Dollars ($500.00) per day for each day that such noncompliance continues. In addition, Company's failure to timely comply will entitle the City to take actions it deems necessary to protect the public health, safety, and welfare. Any and all reasonable and necessary expenses so incurred by the City shall be invoiced to Company and Company shall promptly reimburse the City for such expenses. SECTION 4. RELOCATION OF SYSTEM FACILITIES A. Whenever by reason of widening, straightening, reconstructing, installing, or improving streets, drainage, water, sewer, or communication projects, or any other public works projects in which beautification is not a primary purpose of the project, it shall be deemed necessary by City to remove, alter, change, adapt, or conform the underground or aboveground System Facilities of Company to another part of the Public Rights-of-Way, such alterations shall be made by Company at Company's expense (unless provided otherwise by federal and state law). Such relocation shall be completed not later than the deadline set by the Public Works Director or his/her designee working in conjunction with Company, or if no time frame Ordinance No. 07-3495 Atmos Energy Franchise Page 5 of 18 48 can be agreed upon, not later than ninety (90) days after the day the notice was sent to Company to make the alterations. If Company's System Facilities are not moved after ninety (90) days or on or before the approved scheduled completion date, City shall have the right to relocate Company's System Facilities at Company's expense. The Company shall, within thirty (30) days after receiving a bill for such reasonable expenses, pay the actual costs for relocation. B. When Company is required by City to remove or relocate its System Facilities to accommodate construction of streets and alleys by City, 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 City, Company costs and expenses shall be included in any application by City for reimbursement, if Company submits its cost and expense documentation to 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. Notwithstanding anything contained in this Ordinance, if System Facilities are required to be removed or relocated for any reason other than the construction of streets, alleys, water, sewer, or drainage lines by City, Company shall be entitled to reimbursement from City or others of the cost and expense of such removal or relocation. When Company is required to remove or relocate its mains, laterals or other facilities to accommodate construction of a highway, road, street, public way, or other public work by City without reimbursement from City, Company shall have the right to recovery of relocation costs as provided for in applicable state and/or federal law. C. If City abandons, pursuant to City Council action, any Public Right-of- Way in which Company has facilities, such abandonment shall be conditioned on Company's right to maintain its use of the former Public Right-of-Way and on the obligation of the party to whom the Public Right-of-Way is abandoned to reimburse Company for all removal or relocation expenses if Company agrees to the removal or relocation of its facilities following abandonment of the Public Right-of-Way by action of the City Council. If the party to whom the Public Right-of-Way is abandoned requests the Company to remove or relocate its facilities and Company agrees to such removal or relocation, 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 5. LAYING OF LINES IN ADVANCE OF PUBLIC IMPROVEMENTS A. Whenever the City shall decide to make any public improvements in any Public Right-of-Way in which System Facilities already exist or in which Ordinance No. 07-3495 Atmos Energy Franchise Page 6 of 18 49 Company may propose to install its System, the Company will be provided the opportunity, at no expense to the City, in advance of such public improvements, to renew such System Facilities, if defective or inadequate in size, and to lay System Facilities, or renew same, if inadequate in size or defective, to the property lines where buildings are already located. B. At least ninety (90) calendar days prior to the planned paving or repaving of Public Rights-of-Way, City shall give Company written notice of the intention of the City to pave any such Public Right-of-Way. Upon receipt of such notice, Company shall initiate its review process to determine the need to renew its System Facilities, and the need to lay or renew service lines underneath the portions of the Public Rights-of-Way to be paved. If Company determines such a need, Company shall promptly initiate such work and shall thereafter proceed in a good faith and workmanlike manner to completion of the necessary work within ninety (90) calendar days after receipt of the notice from the City. Company's failure to complete the necessary work within the ninety (90) day period may be excused at the City's discretion, if Company has promptly notified the City of the circumstances that have caused the delay, and has requested an extension of the construction period. City shall grant the extension unless withheld for good cause. C. If Company should fail to take advantage of the pre-paving opportunity to undertake new construction or repairs to existing System Facilities in the Rights-of- Way to be paved, and such street or alley is thereafter paved, except in an emergency or in response to a request for initiation of new service, Company shall for three (3) years thereafter not be allowed to cut such pavement or excavate in such paved street or alley. SECTION 6. INSTALLATION OF METERS If a meter is to be installed in or near the Public Rights-of-Way, Company agrees to discuss with the Public Works Director or his/her delegate the aesthetics of the meter placement and to accommodate the request of the City to the maximum extent possible. If the City requires a meter upgrade, the Company will comply so long as the City reimburses the Company for the reasonable costs incurred by the Company in changing meters. In no event, however, shall underground meters be required. SECTION 7. EXTENSIONS FOR CUSTOMERS Company shall, at its expense, extend distribution mains in any Public Right- of-Way up to one hundred (100) feet for any one customer so long as the potential consumption and revenue will be of such amount and permanence as to warrant the capital expenditures involved to make the investment economically feasible. 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 Ordinance No. 07-3495 Atmos Energy Franchise Page 7 of 18 50 Company agrees to such extension by a written agreement between Company and a customer. SECTION 8. DUTY TO SERVE A. The Company shall not discriminate against any person, corporation, firm, or association in the charge for gas service or in the services rendered under like circumstances to customers of the same classification. The Company shall not directly or indirectly grant any discount, or rebate, or use any other device to circumvent the applicable rate schedule. The Company shall not arbitrarily refuse to provide service to any Person that it is economically feasible for the Company to serve. In the event that a Person believes that the Company is not complying with this Section, said Person may request a hearing before the City Council of the City or its designee, said hearing to be held within forty-five (45) days from the date of the request for hearing. The Council may order the Company to provide service or take any other action necessary to bring the Company into compliance with the intent of the Council in granting this Franchise, including the adoption of an ordinance or resolution in accordance with Section 8.B. or termination or forfeiture of the Franchise in accordance with Section 17. The Council shall render its opinion at its next regular meeting but in no event shall it be required to act in less than seven (7) days. B. Commencing five (5) calendar days following the adoption of a resolution or an ordinance of the City that finds and determines a failure of Company to comply with operational or maintenance standards as required by this Franchise Ordinance, Company shall pay Five Hundred Dollars ($500.00) per day for each day that such noncompliance continues. SECTION 9. CUSTOMER SERVICE STANDARDS: LOCAL OFFICE A. Company shall maintain a local or toll-free telephone access line which will be available to its customers 24 hours a day, seven days a week. B. Company shall make reasonable efforts to maintain, either directly or through third-party contractors, within City one or more conveniently located bill payment offices where customers can pay their bills. In no circumstances shall the absence of such a bill payment office be considered violation of a material provision of this Franchise as outline in Section 17. SECTION 10. RATES Company shall furnish high quality service to the public at reasonable rates and charges therefor; and Company shall maintain its System in good order and condition. Such rates shall be established in accordance with all applicable statutes and ordinances. Company shall maintain on file with the City copies of its current tariffs, schedules or rates and charges, customer service provisions, and line extension policies. The rates and charges collected from its customers in the City Ordinance No. 07-3495 Atmos Energy Franchise Page 8 of 18 51 shall be subject to revision and change by either the City or Company in the manner provided by law. SECTION 11. PAYMENTS TO THE CITY A. In consideration of the privilege and license granted by City to Company to use and occupy the Public Rights-of-Way in the City for the conduct of its business, Company, its successors and assigns, agrees to pay and City agrees to accept such franchise fees in the amount and manner described herein. Except as provided for in Section 11.B., such payment shall be made on a quarterly basis, on or before the forty-fifth (45th) day following the end of each calendar quarter. The initial payment provided under this Franchise shall be due on February 15, 2008 for the period of October 1 through December 31, 2007 and shall be paid in accordance with the terms of the previous Franchise Agreement. Thereafter, the franchise fee shall be a sum of money that shall be equivalent to five percent (5%) of the quarterly Gross Revenues, as defined in Section 2.E., for the preceding calendar quarter. The initial payment provided at a rate of five percent (5%) under this Franchise shall be due on or before May 15, 2008 based on the preceding calendar quarter (January- March, 2008). Subsequent payments shall be made as follows during the term of the Franchise: Payment Due Based Upon and For Calendar Quarter Aug. 15 April 1 -June 30 Nov. 15 July 1 -Sept. 30 Feb. 15 Oct. 1 -Dec. 31 May 15 Jan. 1 -March 31 The final payment under this Franchise will be due on or before February 15, 2018 and will be for the calendar quarter October 1 to December 31, 2017. B. The franchise fee amounts based on "Contributions in Aid of Construction" ("CIAC") shall be calculated on an annual calendar year basis of each calendar year. The franchise fee amounts that are due based on CIAC shall be paid at least once annually on or before April 30 each year based on the total CIAC recorded during the preceding calendar year. The initial CIAC franchise fee payment will be due on or before April 30, 2009 and will be based on CIAC received from January 1, 2008 through December 31, 2008. The final payment of franchise fee amounts based on CIAC will be April 30, 2018, for the calendar year ending December 31, 2017. C. It is also expressly agreed that the franchise fee payments shall be in lieu of any and all other and additional occupation taxes, easement, franchise taxes or charges (whether levied as a special or other character of tax or charge), bonds, street taxes, and street or alley rentals or charges, and all other and additional municipal taxes, charges, levies, fees, and rentals of whatsoever kind and character that City may now impose or hereafter levy and collect from Company or Company's agents, excepting only the usual general or special ad valorem taxes that City is Ordinance No. 07-3495 Atmos Energy Franchise Page 9 of 18 52 authorized to levy and impose upon real and personal property. Except however, Company's separate obligation to reimburse the City for City's reasonable rate case expenses and for street repairs in accordance with City's ordinances, and requirements for municipal license and building construction permits, are not affected by Company's payment of franchise fees hereunder. Should City not have the legal power to agree that the payment of the foregoing sums of money shall be in lieu of occupation taxes, licenses, fees, street or alley rentals or charges, easements or franchise taxes, then City agrees that it will apply so much of said sums of money paid as may be necessary to satisfy Company's obligations, if any, to pay such occupation taxes, licenses, charges, fees or rentals. D. If the Company fails to pay when due (as provided in Section 11.A.) any payment provided for in this Section, Company shall pay such amount plus interest at the then current prime rate plus 2% per annum from such due date until payment is received by City. E. City shall within thirty (30) days of final approval, give Company notice of annexations and disannexations of territory by the City, which notice shall include a map and addresses, if known. Upon receipt of said notice, Company shall promptly initiate a process to reclassify affected customers into the city limits no later than sixty (60) days after receipt of notice from the City. The annexed areas added to the city limits will be included in future franchise fee payments in accordance with the effective date of the annexation if notice was timely received from City. Upon request from City, Company will provide documentation to verify that affected customers were appropriately reclassified and included for purposes of calculating franchise fee payments. F. At any time during the term of this Franchise, the City may increase the franchise fee payable hereunder so long as the franchise fee, as so increased, constitutes a charge for the Company's use of the Public Rights-of-Way, which is reasonable and lawful. Such increase must be adopted by the governing body of the City at a public meeting that is held no earlier than thirty (30) days following notice by the City to the Company, stating the reason for, and the date, time, and place of, such meeting. Notwithstanding the forgoing, the franchise fee may not be increased hereunder: (i) more than once in any five year period during the term of this franchise; and (ii) by an amount exceeding one-half of one percent (1/2 of 1%) of Company's Gross Revenue; and, (iii) the total franchise fee payable after any increase may not exceed the highest franchise fee payable to any other municipality in the Company's West Texas division service area. Company may add aline-item surcharge to the monthly bills of Company's customers located within the City in an amount sufficient to recover any increased franchise fees paid to City under this subparagraph. Ordinance No. 07-3495 Atmos Energy Franchise Page 10 of 18 53 SECTION 12. EFFECT OF OTHER MUNICIPAL FRANCHISE ORDINANCE FEES ACCEPTED AND PAID BY COMPANY A. 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 in the Company's West Texas division service area, 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. B. The provisions of this Section 12 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. SECTION 13. BOOKS AND RECORDS A. Company agrees that at the time of each quarterly payment, Company shall also submit to the City a statement showing its Gross Revenues for the preceding calendar quarter as defined in Section 2.E. City shall be entitled to treat such statement as though it were sworn and signed by an officer of Company. B. City may, if it sees fit, upon reasonable notice to the Company, have the books and records of Company examined by a representative of City to ascertain the correctness of the reports agreed to be filed herein. The Company shall make available to the auditor such personnel and records as the City may in its reasonable discretion request in order to complete such audit, and shall make no charge to the City therefor. The Company shall assist the City in its review by providing all requested information no later than fifteen (15) days after receipt of a request. The cost of the audit shall be borne by the City unless the audit discloses that the Company has underpaid the franchise fee by 7%% or more, in which case the reasonable costs of the audit shall be reimbursed to the City by the Company. If such an examination reveals that Company has underpaid the City, then upon receipt of written notification from City regarding the existence of such underpayment, Company shall undertake a review of the City's claim and if said underpayment is confirmed, remit the amount of underpayment to City, including any interest calculated in accordance with Section 11.D. Should Company determine through examination of its books and records that City has been overpaid, upon receipt of written notification from Company regarding the existence of such overpayment, City shall review Company's claim and if said overpayment is confirmed, either remit the amount of overpayment to Company or apply the overpayment as a credit against the next scheduled payment of fees by the Company. C. If, after receiving reasonable notice from the City of the City's intent to perform an audit as provided herein, the Company fails to provide data, documents, Ordinance No. 07-3495 Atmos Energy Franchise Page 11 of 18 54 reports, or information required to be furnished hereunder to the City, or fails to reasonably cooperate with the City during an audit conducted under the terms hereunder, the Company shall be liable for payment of City's reasonable and necessary expenses (including reasonable attorney's fees) incurred in obtaining such data, documents, reports or information. D. Company must retain all records pertaining to the calculation and payment of franchise fees for a period of time not less than the current fiscal year, plus the preceding two (2) fiscal years. If Company should possess relevant records for a longer period, then City will be allowed access to those records to the same extent and manner as records maintained during the period specified in the preceding sentence. SECTION 14. RESERVATION OF RIGHTS: GENERAL A. The City reserves to itself the right and power at all times to exercise, in the interest of the public and in accordance with state law, regulation and control of Company's use of the Public Rights-of-Way to ensure the rendering of efficient public service, and the maintenance of Company's System in good repair throughout the term of this Franchise. B. The rights, privileges, and Franchise granted by this Ordinance are not to be considered exclusive, and City hereby expressly reserves the right to grant, at any time, like privileges, rights, and franchises as it may see fit to any other Person for the purpose of furnishing gas for light, heat, and power for City and the inhabitants thereof. C. City expressly reserves the right to own and/or operate its own system for the purpose of transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof. D. Nothing herein shall impair the right of the City to fix, within constitutional and statutory limits, a reasonable price to be charged for natural gas utility services, or to provide and fix a scale of prices for natural gas utility services, and other charges, to be charged by Company to residential consumers, commercial consumers, industrial consumers, or to any combination of such consumers, within the territorial limits of the City as same now exists or as such limits may be extended from time to time hereafter. SECTION 15 RIGHT TO INDEMNIFICATION, LEGAL DEFENSE AND TO BE HELD HARMLESS A. In consideration of the granting of this Franchise, Company agrees to indemnify, defend and hold harmless the City, its officers, agents, and employees (City and such other persons and entities being collectively referred to herein as "Indemnitees"), from and against all suits, actions or claims of injury to any person or Ordinance No. 07-3495 Atmos Energy Franchise Page 12 of 18 55 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. B. The Company's obligation to indemnify Indemnitees under this Franchise Ordinance shall not extend to claims, losses, and other matters covered hereunder that are caused or contributed to by the negligence of one or more Indemnitees. In such case the obligation to indemnify shall be reduced in proportion to the negligence of the Indemnitees. By entering into this Franchise Ordinance, City does not consent to suit, waive any governmental immunity available to the City under Texas law or waive any of the defenses of the parties under Texas law. C. Except for instances of the City's own negligence, City shall not at any time be required to pay from its own funds for injury or damage occurring to any person or property from any cause whatsoever arising out of Company's construction, reconstruction, maintenance, repair, use, operation or dismantling of System or Company's provision of service. D. In the event any action or proceeding shall be brought against the Indemnitees by reason of any matter for which the Indemnitees are indemnified hereunder, Company shall, upon notice from any of the Indemnitees, at Company's sole cost and expense, resist and defend the same with legal counsel selected by Company; provided, however, that Company shall not admit liability in any such matter on behalf of the Indemnitees without their written consent and provided further that Indemnitees shall not admit liability for, nor enter into any compromise or settlement of, any claim for which they are indemnified hereunder, without the prior written consent of Company. Company's obligation to defend shall apply regardless of whether City is solely or concurrently negligent. The Indemnitees shall give Company prompt notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the provisions of this Section 15. Nothing herein shall be deemed to prevent the Indemnitees at their election and at their own expense from cooperating with Company and participating in the defense of any litigation by their own counsel. If Company fails to retain defense counsel within seven (7) business days after receipt of Indemnitee's written notice that Indemnitee is invoking its right to indemnification under this Franchise, Indemnitees shall have the right to retain defense counsel on their own behalf, and Company shall be liable for all reasonable defense costs incurred by Indemnitees. SECTION 16. INSURANCE The Company will maintain an appropriate level of insurance in consideration of the Company's obligations and risks undertaken pursuant to this Franchise, unless a specific amount of insurance is required by City ordinance, in which case said ordinance will control. Such insurance may be in the form of self-insurance to the extent permitted by applicable law, under an approved formal plan of self-insurance Ordinance No. 07-3495 Atmos Energy Franchise Page 13 of 18 56 maintained by Company in accordance with sound accounting and risk-management practices. A certificate of insurance shall be provided to the City. The Company will require its self-insurance to respond to the same extent as if an insurance policy had been purchased naming the City as an additional insured. SECTION 17. TERMINATION A. Right to Terminate. In addition to any rights set out elsewhere in this Franchise Ordinance, the City reserves the right to terminate the Franchise and all rights and privileges pertaining thereto, in the event that the Company violates any material provision of the Franchise. B. Procedures for Termination. (1) The City may, at any time, terminate this Franchise for a continuing material violation by the Company of any of the substantial terms hereof. In such event, the City shall give to Company written notice, specifying all grounds on which termination or forfeiture is claimed, by registered mail, addressed and delivered to the Company at the address set forth in Section 24 hereof. The Company shall have sixty (60) days after the receipt of such notice within which to cease such violation and comply with the terms and provisions hereof. In the event Company fails to cease such violation or otherwise comply with the terms hereof, then Company's Franchise is subject to termination under the following provisions. Provided, however, that, if the Company commences work or other efforts to cure such violations within thirty (30) days after receipt of written notice and shall thereafter prosecute such curative work with reasonable diligence until such curative work is completed, then such violations shall cease to exist, and the Franchise will not be terminated. (2) Termination shall be declared only by written decision of the City Council after an appropriate public proceeding whereby the Company is afforded the full opportunity to be heard and to respond to any such notice of violation or failure to comply. The Company shall be provided at least fifteen (15) days prior written notice of any public hearing concerning the termination of the Franchise. In addition, ten (10) days notice by publication shall be given of the date, time and place of any public hearing to interested members of the public, which notice shall be paid for by the Company. (3) The City, after full public hearing, and upon finding material violation or failure to comply, may terminate the Franchise or excuse the violation or failure to comply, upon a showing by the Company of mitigating circumstances or upon a showing of good cause of said violation or failure to comply as may be determined by the City Council. (4) Nothing herein stated shall preclude Company from appealing the final decision of the City Council to a court or regulatory authority having jurisdiction. Ordinance No. 07-3495 Atmos Energy Franchise Page 14 of 18 57 (5) Nothing herein stated shall prevent the City from seeking to compel compliance by suit in any court of competent jurisdiction if the Company fails to comply with the terms of this Franchise after due notice and the providing of adequate time for Company to comply with said terms. SECTION 18. RENEGOTIATION If either City or Company requests renegotiation of any term of this Ordinance, Company and City agree to renegotiate in good faith revisions to any and all terms of this Ordinance. If the parties cannot come to agreement upon any provisions being renegotiated, then the existing provisions of this Ordinance will continue in effect for the remaining term of the Franchise. SECTION 19. NO THIRD PARTY BENEFICIARIES This Franchise is made for the exclusive benefit of the City and the Company, and nothing herein is intended to, or shall confer any right, claim, or benefit in favor of any third party. Nothing in this Franchise shall be construed as a waiver of any right, defense, immunity, or tariff of either party hereto, as to third party claims. SECTION 20. SUCCESSORS AND ASSIGNS No assignment or transfer of this Franchise shall be made, in whole or in part, except in the case of assignment or transfer to an Affiliate without approval of the City Council of the City. Written notice of said transfer or assignment to an Affiliate shall be provided to the City. The City will grant such approval unless withheld for good cause such as: (1) the failure of the proposed Assignee or Transferee to agree to comply with all provisions of this Ordinance and such additional conditions as the Council may prescribe in order to remedy existing conditions of non-compliance, and (2) the failure of the proposed Assignee or Transferee to provide assurances reasonably satisfactory to the Council of its qualifications, character, the effect of the Transfer and such other matters as the Council deems relevant. Upon approval, the rights, privileges, and Franchise herein granted to Company shall extend to and include its successors and assigns. The terms, conditions, provisions, requirements and agreements contained in this Franchise shall be binding upon the successors and assigns of the Company. SECTION 21. COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES This Franchise is granted subject to the laws of the United States of America and its regulatory agencies and commissions and the laws of the State of Texas, the Plainview City Charter, as amended, and all other generally applicable ordinances of the City of Plainview, not inconsistent herewith, including, but not limited to, ordinances regulating the use of Public Rights-of-Way and pertaining to the suspension of natural gas service disconnects during winter months. Ordinance No. 07-3495 Atmos Energy Franchise Page 15 of 18 58 SECTION 22. FORCE MAJEURE Notwithstanding anything expressly or impliedly to the contrary contained herein, in the event the Company is prevented, wholly or partially, from complying with any obligation or undertaking contained herein by reason of any event of force majeure, then, while so prevented, compliance with such obligations or undertakings shall be suspended, and the time during which Company is so prevented shall not be counted against Company for any reason. The term "force majeure" shall mean any cause not reasonably within Company's control and includes, but is not limited to, acts of God, strikes, lock-outs, wars, terrorism, riots, orders or decrees of any lawfully constituted federal, state, or local body, contagions or contaminations hazardous to human life or health, fires, storms, floods, wash-outs, explosions, breakage or accidents to machinery or lines of pipe, inability to obtain or delay in obtaining rights- of-way, materials, supplies, or labor permits, temporary failures of gas supply, or necessary repair, maintenance, or replacement of facilities used in the performance of the obligations contained in this Ordinance. SECTION 23. REPEAL OF PREVIOUS ORDINANCES When this Franchise becomes effective, all gas franchise ordinances and parts of franchise ordinances and any extensions thereof, applicable to the Company or its predecessors in interest granted by the City of Plainview, Texas, are hereby repealed. SECTION 24. NOTICES Any notices required or desired to be given from one party to the other party to this Ordinance shall be in writing and shall be given and shall be deemed to have been served and received if: (i) delivered in person to the address set forth below; (ii) deposited in an official depository under the regular care and custody of the United States Postal Service located within the confines of the United States of America and sent by certified mail, return receipt requested, and addressed to such party at the address hereinafter specified; or (iii) delivered to such party by courier receipted delivery. Either party may designate another address within the confines of the continental United States of America for notice, but until written notice of such change is actually received by the other party, the last address of such party designated for notice shall remain such party's address for notice. CITY City Manager City of Plainview 901 Broadway Plainview, Texas 79072 COMPANY Public Affairs Atmos Energy Corp., West Texas Division 5110 80th Street Lubbock, Texas 79424 Ordinance No. 07-3495 Atmos Energy Franchise Page 16 of 18 59 City Attorney City of Plainview 901 Broadway Plainview, Texas 79072 SECTION 25. PARAGRAPH HEADINGS. CONSTRUCTION The paragraph headings contained in this Ordinance are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs hereof. Both parties have participated in the preparation of this Ordinance and this Ordinance shall not be construed either more or less strongly against or for either party. SECTION 26. SEVERABILITY This Ordinance and every provision hereof, shall be considered severable, and the invalidity or unconstitutionality of any section, clause, provision, or portion of this Ordinance shall not affect the validity or constitutionality of any other portion of this Ordinance. If any term or provision of this Ordinance is held to be illegal, invalid or unenforceable, the legality, validity or unenforceability of the remaining terms or provisions of this Ordinance shall not be affected thereby. SECTION 27. NO WAIVER Either City or the Company shall have the right to waive any requirement contained in this Ordinance, which is intended for the waiving party's benefit, but, except as otherwise provided herein, such waiver shall be effective only if in writing executed by the party for whose benefit such requirement is intended. No waiver of any breach or violation of any term of this Ordinance shall be deemed or construed to constitute a waiver of any other breach or violation, whether concurrent or subsequent, and whether of the same or a different type of breach or violation. SECTION 28. EFFECTIVE DATE This Franchise shall be effective on January 1, 2008 at 12:01 a.m. SECTION 29. ACCEPTANCE OF TERMS OF FRANCHISE The Company shall file with the City Secretary written acceptance of this Ordinance by December 31, 2007 encompassing the final Franchise Agreement between the parties to be presented to the City Council for adoption. If the Company does not file such written acceptance of this Franchise Ordinance, the Franchise Ordinance shall be rendered null and void. The effective date shall be determined in accordance with the requirements of Section 28. PASSED AND APPROVED on first reading this 11th day of December, 2007. Ordinance No. 07-3495 Atmos Energy Franchise Page 17 of 18 60 PASSED AND APPROVED on second reading this 20th day of December, 2007. N C. ANDER$~ON, MAYOR ATTEST: Belinda Hinojosa, City Secreta APPROV~Bi AS TO CityiSllanager AS TO FORM: Leslie Spear Pearc ,City Attorney Ordinance No. 07-3495 Atmos Energy Franchise Page 18 of 18