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ORD 2013-10 Montgomery Gas Transmission System Repairs ORDINANCE NO. 2013-10 AN ORDINANCE GRANTING MONTGOMERY GAS TRANSMISSION, INC., ITS SUCCESSORS AND ASSIGNS, THE RIGHTS, PRIVILEGE AND FRANCHISE FOR A PERIOD OF TEN YEARS (10) YEARS TO CONSTRUCT, LAY, MAINTAIN, OPERATE, EXTEND, REMOVE, REPLACE AND REPAIR A SYSTEM OF PIPELINES, GAS MAINS, LATERALS AND ATTACHMENTS AND ALL DESIRABLE INSTRUMENTALITIES IN, UNDER, OVER, ACROSS AND ALONG ANY AND ALL STREETS, AVENUES, PARKWAYS, SQUARES, ALLEYS AND ALL OTHER PUBLIC PLACES IN THE CITY OF HUNTSVILLE, WALKER COUNTY, TEXAS, FOR THE PURPOSE OF TRANSPORTING, DISTRIBUTING, SUPPLYING AND SELLING GAS (NATURAL AND/OR ARTIFICIAL AND/OR MIXED) FOR HEATING, LIGHTING, POWER, AND FOR ALL OTHER PURPOSES FOR WHICH GAS MAY BE USED, TO THE MUNICIPALITY OF SAID CITY OF HUNTSVILLE, TEXAS, AND ITS INHABITANTS AND OTHERS; PROVIDING CONDITIONS CONTROLLING THE USE OF PUBLIC THOROUGHFARES AND EXTENSIONS THEREIN; ESTABLISHING STANDARDS OF SERVICE; PROVIDING FOR PAYMENT OF FOUR PERCENT (4%) OF THE GROSS RECEIPTS FROM THE SALE OF GAS WITHIN THE CITY OF HUNTSVILLE AND SEVEN CENTS (7¢) PER MCF FOR THE TRANSPORTATION OF GAS TO TRANSPORTATION CUSTOMERS; PROVIDING FOR ACCEPTANCE; PROVIDING A SEVERABILITY CLAUSE; MAKING MISCELLANEOUS PROVISIONS; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH. BE IT ORDAINED BY THE CITY OF HUNTSVILLE: Section 1. The City of Huntsville, Walker County, Texas, (hereinafter referred to as "Grantor" or "City") does hereby grant unto Montgomery Gas Transmission, Inc., its successors and assigns (hereinafter referred to as"Grantee")the right,privilege and franchise to construct, install, lay, maintain, operate, use, extend, remove, replace and repair in, under, over, across and along any and all of the present and future streets, avenues, parkways, squares, alleys, thoroughfares, roads, highways, sidewalks, viaducts, bridges, streams, public grounds, public properties (including City building sites) and other public places in the City of Huntsville, and in all tracts, territories and areas hereafter annexed to or acquired by and placed within the corporate boundaries of said municipality, a system of pipes, pipelines, gas mains, laterals, conduits, feeders, regulators, meters, fixtures, connections, attachments and other desirable instrumentalities and appurtenances necessary or proper for the purpose of transporting, distributing, supplying and selling gas (natural and/or artificial and/or mixed) for heating, lighting, power and for any other purpose for which gas may now or hereafter be used in and to said municipality and its inhabitants or any other person or persons within or without the corporate boundaries of said municipality. Section 2. All facilities installed by Grantee shall be of sound material and good quality, and shall be laid so that they will not interfere with the artificial drainage of the Grantor or its underground fixtures, or with navigation in or the natural drainage of any stream. All facilities shall be installed in accordance with applicable Federal, State and City regulations and in the absence of such regulations in accordance with accepted industry practice. Within the public rights-of-way, the location and route of the facilities by the Grantee shall be subject to the reasonable and proper regulation, direction and control of the Grantor or the City official to whom such duties have been delegated. Such regulation shall include, but not be limited to, the right to require in writing to the extent provided in Section 13 the relocation of Grantee's facilities at Grantee's cost within the public rights-of-way of the Grantor whenever such relocation shall be reasonably necessary to accommodate the widening, change of grade, or relocation by Grantor of streets or public rights-of-way, or construction or relocation by Grantor of City utility lines or drainage facilities or other construction projects. The Grantee and the Grantor shall work together to develop a procedure under which Grantee shall make available to the Grantor maps showing the location of Grantee's facilities within the corporate limits of the City. Section 3. Except as provided herein, Grantee expressly agrees that it shall not undertake major replacements or extensions of pipe, mains or other facilities within the boundaries of city parks currently owned or later established by Grantor without the prior written consent of the City of Huntsville. Grantee, however, shall not be required to remove or relocate its existing facilities in City parks established as of the date of this ordinance nor shall Grantee be required to remove or relocate existing facilities from land declared to be a City park subsequent to the date of this ordinance. Provided further, that Grantee shall not be required to obtain such prior written consent to perform routine maintenance or repairs of its facilities within city parks or when failure to repair, replace or extend such facilities would, in the good faith opinion of Grantee,pose a danger to public health or safety. Section 4. This Franchise shall extend to and include any and all territory that is annexed by the Grantor during the term of this Franchise. Within sixty (60) days from the receipt of notice from the Grantor of any such annexation,the Grantee shall assure that any and all customers within such annexed territory are included and shown on its accounting system as being within the corporate limits of the City of Huntsville. After such sixty (60) day period the payment provisions specified in Section 8 of this Franchise shall apply to gross receipts received by the Grantee from customers located within such annexed territory. Grantee shall true-up its map of City boundaries to the Grantor's map on an annual basis. Section 5. Grantee and its contractors shall give Grantor reasonable advance notice, of the dates, location and nature of all work to be performed on its facilities within the public rights-of-way.. While Grantee and Grantee's contractors must secure all permits that may be required, Grantee or Grantee's contractor shall not be required to pay any fee in addition to the franchise fee in order to perform work on Grantee's facilities within the parks, the streets and other public rights-of-way. Grantee's property shall be so constructed and maintained as not to interfere unreasonably with traffic over the public thoroughfares of said municipality and the same shall be laid in accordance with the lines, grades, and conditions established by Grantor. Following completion of work in the public rights-of-way, Grantee shall repair the affected public rights-of-way as soon as possible, but in all cases Grantee shall comply with all City ordinances governing time periods and standards relating to excavating in the public rights-of-way. No street, alley, highway or public place shall be encumbered for a longer period than shall be necessary to execute the work. Section 6. Grantee shall not be required to run or extend any pipe a distance exceeding one hundred (100) feet, not to exceed a diameter of two (2) inches, in order to bring gas service to the property line of each additional customer. Section 7. The service furnished hereunder by Grantee to the Grantor and its inhabitants shall be in accordance with the quality of service rules of the Railroad Commission of Texas and all other applicable local, state and federal regulations. Grantee shall furnish the grade of service to its customers as provided by its rate schedules and shall maintain its system in reasonable operating condition during the continuance of this Franchise. An exception to this requirement is automatically in effect, but only for so i long as is necessary, when caused by a shortage in materials, supplies and equipment beyond the control of the Grantee as a result of fires, strikes, riots, storms, floods and other casualties, governmental regulations, limitations and restrictions as to the use and availability of materials, supplies and equipment and as to the use of the services, and unforeseeable and unusual demands for service. In any of such events the Grantee shall do all things reasonably within its power to restore normal service as quickly as practicable. Section 8. In consideration of the rights and privileges herein granted, after the effective date of this ordinance, Grantee agrees to pay to Grantor quarterly during the continuance of this ordinance a franchise fee equal to four percent (4%) of the Grantee's gross receipts for the preceding calendar quarter received by the Grantee from the sale of gas within the corporate limits of the City of Huntsville plus seven cents (7¢) per Mcf for natural gas transported by Grantee for its Transport Customers during such quarter. "Transport Customer" means any person or entity for whom Grantee transports gas through the distribution or transportation system of Grantee within the corporate limits of City for consumption within the corporate limits of City. The franchise fees hereunder shall be calculated for the calendar quarters ending March 31,June 30, September 30, and December 31 and shall be payable on or before the fifteenth day of May, August, November, and February following the quarter for which payment is made, beginning with the first such date following the Effective Date of this Franchise and each August 15th, November 15th, February 15th, and May 15th thereafter; provided, however, the first such payment shall be prorated as necessary to reflect only those gross receipts received and transportation volumes delivered by Grantee after the Effective Date of this Franchise. If any payment due date required therein falls on a weekend or bank holiday, payment shall be made on or before the close of business of the first working day after the payment due date. All payments to Grantor shall be accompanied by a certified statement of Grantee in a form prescribed by Grantor. Upon receipt of such payments, the City Finance Officer shall deliver to the Grantee a receipt for such amount. In the event that Grantee does not provide gas service to customers within the corporate limits of the City of Huntsville or transport gas for consumption within the corporate limits of the City of Huntsville, then Grantee agrees to pay an annual franchise fee equal to $0.50 per foot of pipe occupying the municipal right-of-way during the year ("Annual Franchise Fee"). Such Annual Franchise Fee shall reimburse the municipality for administering, supervising, inspecting, and otherwise regulating the location of the gas pipeline facility, including maintaining records and maps of the location of the pipeline facility and the first annual payment shall payable within 30 days after the effective of date of this ordinance and thereafter each annual payment shall be payable on or before December 31s` for the upcoming calendar year. Should Grantee fail to tender payment to Grantor within ten (10) days following the date such payment is due, Grantee shall pay to Grantor, as a late payment penalty, an additional amount equal to three percent (3%) of the amount otherwise payable to Grantor on such due date. The consideration hereinabove set forth shall be paid and received in lieu of any license, charge, fee, street or alley rental, or other character of charge for the use and occupancy for the streets, alleys and public places within the city, and in lieu of any pipe tax or inspection fee or tax, but shall not in any way increase or diminish Grantee's obligation to pay Grantor ad valorem taxes or in any way interfere with the collection thereof. Any special taxes, rentals or other charges accruing after the effective date of this ordinance, under the terms of any preexisting ordinance, or imposed upon Grantee by subsequent action of Grantor shall, when paid to Grantor, be applied as a credit to the amount owed to Grantor under the terms of this franchise agreement. Section 9. Grantee shall keep complete and accurate books of accounts and records of its business and operations under and in connection with this Franchise. All such books of accounts and records shall be kept at Grantee's principal office in Conroe,Texas. Grantor may conduct an audit or other inquiry or may pursue a cause of action in relation to the payment of the franchise fee. Each party shall bear its own costs of any such audit or inquiry. Upon receipt of a written request from Grantor, all books and records related to Grantee's operations under this Franchise shall be made available for inspection and copying no later than thirty(30) days from receipt of such request. Section 10. If the Legislature of the State of Texas amends the ceiling on utility gross receipts payments to municipalities established by Tex. Tax Code §182.025, then Grantor may prospectively change the percentage of Grantee's gross receipts payable to Grantor under Section 8 of this Franchise to the level established by such amendment. Section 11. GRANTEE, ITS SUCCESSORS AND ASSIGNS SHALL PROTECT AND HOLD GRANTOR AND ITS OFFICERS, AGENTS AND EMPLOYEES HARMLESS AGAINST ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO ANY PERSON OR PROPERTY BY REASON OF THE CONSTRUCTION AND MAINTENANCE OF GRANTEE'S NATURAL GAS DISTRIBUTION OR TRANSPORTATION SYSTEM, OR IN ANY WAY GROWING OUT OF THE RIGHTS GRANTED BY THIS FRANCHISE ORDINANCE, EITHER DIRECTLY OR INDIRECTLY, OR BY REASON OF ANY ACT, NEGLIGENCE OR NONFEASANCE OF GRANTEE OR THE CONTRACTORS, AGENTS OR EMPLOYEES OF GRANTEE, ITS SUCCESSORS AND ASSIGNS, AND SHALL REFUND TO GRANTOR ALL SUMS WHICH GRANTOR MAY BE ADJUDGED TO PAY ON ANY SUCH CLAIM, OR WHICH MAY ARISE OR GROW OUT OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED, OR BY THE ABUSE THEREOF, AND GRANTEE, ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY AND HOLD GRANTOR, ITS OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM AND ON ACCOUNT OF ALL DAMAGES, COSTS, EXPENSES, ACTIONS AND CAUSES OF ACTION THAT MAY ACCRUE TO OR BE BROUGHT BY A PERSON, PERSONS, COMPANY OR COMPANIES AT ANY TIME THEREAFTER BY REASON OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED,OR OF THE ABUSE THEREOF. Section 12. Grantee shall not prosecute or maintain any claims against Grantor or its employees for any damage or injury to Grantee's pipelines or facilities resulting from Grantor's performance of work or repairs upon city streets; provided, however, that the provisions hereof shall in no way limit Grantee's right to prosecute or maintain any such claim against any person, association, or corporation other than Grantor or its employees. Section 13. The Grantee shall, upon written request of the Grantor, relocate its facilities within public rights-of-way at Grantee's own expense whenever such shall be reasonably necessary on account of the widening, change of grade, or relocation by Grantor of streets or public rights-of-way, or construction or relocation by Grantor of City utility lines or drainage facilities or other construction projects. Section 14. Grantor, by granting of this ordinance, does not surrender or to any extent lose, waive, impair or lessen the lawful powers, claims and rights now or hereafter vested in Grantor under the Constitution and statutes of the State of Texas and under the Charter of the City of Huntsville to regulate public utilities within Grantor's city limits, to regulate the rates of public utilities within Grantor's city limits and to regulate the use of the streets by Grantee; and Grantee, by its acceptance of this ordinance, agrees that all lawful powers and rights,whether regulatory or otherwise, as are or as may be from time to time vested in i or reserved to Grantor, shall be in full force and effect and subject to the exercise thereof by Grantor at any time and from time to time. All of the regulations and activities required by this Franchise are hereby declared to be governmental and for the health, safety and welfare of the general public. Section 15. In the event Grantee, by act or omission, violates any term, condition or provision of this ordinance, Grantor shall notify Grantee in writing of such violation. Grantee shall correct any such violation within thirty(30)days of receipt of such notice. Should Grantee fail or refuse to correct any such violation within such thirty (30) day period, Grantor may terminate this agreement by ordinance adopted by the City Council of the City of Huntsville; provided, however, before any such ordinance is adopted, Grantee must be given at least sixty (60) days advance written notice, which notice shall set forth the causes and reasons for the proposed termination and cancellation, and shall advise the Grantee that it will be provided an opportunity to be heard by the City Council of the City of Huntsville regarding such proposed action before any such action is taken and shall set forth the time,date and place of the hearing. Other than its failure, refusal or inability to pay its debts and obligations, including, specifically, the payments to Grantor required by this ordinance, Grantee shall not be declared in default or be subject to any sanction under any provision of this ordinance in those cases in which performance of such provision is prevented by reasons beyond its control; provided, however, that such performance shall not be excused when based solely upon financial limitations of Grantee. Section 16. Subject to the terms, conditions and restrictions stated herein, within five(5) years of,but not less than twelve(12) months before,the expiration of the term of this Franchise, Grantor shall have the option to purchase Grantee's distribution or transportation system within the corporate limits of Grantor. Grantor must present Grantee with written notice of Grantor's intent to exercise its option to purchase the franchised property. Within thirty (30) days of receipt of notice, Grantee shall make a written offer (the "Offer") stating the cash price for the purchase and sale of said distribution or transportation system. Within twenty (20) days of Grantor's receipt of the Offer, Grantor will submit written notice rejecting or accepting the Offer. Should Grantor reject the Offer, Grantor and Grantee shall enter into good faith negotiations to determine a cash price to be paid by Grantor for said distribution or transportation system. Failure of Grantor and Grantee to agree on a cash price for Grantee's distribution or transportation system shall not constitute grounds for termination or cancellation under Section 15 of this ordinance. Should Grantor accept the Offer or should Grantee and Grantor reach an agreement on a cash purchase price after good faith negotiations, Grantee shall not be required to sell or transfer said distribution or transportation system to Grantor until the expiration of the term of this Franchise or such earlier time as may be mutually agreeable to Grantee and Grantor. The foregoing notwithstanding, Grantor shall not purchase Grantee's distribution or transportation system until the matter of the acquisition of such property has been submitted at a municipal election to be determined by a majority vote of the qualified taxpayers voting therein. Nothing in this Franchise shall be construed as limiting or otherwise affecting Grantor's authority to acquire franchised property under Grantor's powers of eminent domain. Section 17. Nothing herein contained shall ever be held or considered as conferring upon Grantee and its successors and assigns any exclusive rights or privileges of any nature whatsoever. Section 18. This ordinance shall not be assigned by Grantee without the authorization and approval of Grantor. Section 19. All ordinances and parts of ordinances in conflict herewith are hereby repealed. Section 20. Grantor and Grantee hereby acknowledge that all of the provisions hereof are the result of negotiations between Grantor and Grantee. The provisions of this ordinance shall be constructed fairly and reasonably and not more strictly against the party drafting such provisions than against the non- drafting ply. Section 21. This ordinance shall take effect and continue and remain in effect for a period of ten (10)years from and after the date which is sixty(60)days after the adoption and passage of this franchise ordinance; provided Grantee files a written acceptance of this franchise ordinance with Grantor within thirty (30) days after final passage of this franchise ordinance. Section 22. If any provision, section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be unconstitutional,void or invalid(or for any reason unenforceable),the validity of the remaining portions of this ordinance shall not be affected thereby, it being the intent of Grantor in adopting this ordinance that no portion hereof or provision or regulation contained herein shall become inoperative or fail by reason of any unconstitutionality or invalidity of any other portion, provision or regulation, and to this end,all provisions of this ordinance are declared to be severable. Presented to the City Council at a regular meeting of the City Council of the City of Huntsville,Texas,on the 8'h day of January 2013. Presented, passed and adopted at a regular meeting of the City Council of the City of Huntsville,Texas,on this 22nd day of January 2013,and approved by the Mayor. APPROVED: '3� a"'4'z'/ Mac Woodw d, May City of Huntsville, Teta ATTEST: APPROVED AS TO FORM: Lei yJ oo ward,City Secre d Schnei er,City Attorney ty of Huntsville,Texas it of Huntsville, Texas TO THE CITY OF HUNTSVILLE,TEXAS: Montgomery Gas Transmission, Inc. itself, its successors and assigns, hereby accepts the above and foregoing ordinance and agrees to be bound by all of its terms and provisions. Dated this the day of 2013. MONTGOMERY GAS TRANSMISSION, INC. {Name and Title of Authorized gent} Psi de�`� NOTE TO THE CITY SECRETARY: Please do not complete the certificate below until an officer of Montgomery Gas Transmission, Inc., has executed the Acceptance above. THE STATE OF TEXAS § COUNTY OF WALKER § 1, the duly appointed, qualified and acting City Secretary of Huntsville, Texas, hereby certify that the above and foregoing Acceptance was received and filed in the office of the City Secretary of Huntsville, Texas, on the day of Q , 2013. i Lee W/odward, Cit etary of Huntsville, Texas [SEAL] I ORDINANCE NO.2013-10 AN ORDINANCE GRANTING MONTGOMERY GAS TRANSMISSION, INC., ITS SUCCESSORS AND ASSIGNS, THE RIGHTS, PRIVILEGE AND FRANCHISE FOR A PERIOD OF TEN YEARS (10) YEARS TO CONSTRUCT, LAY, MAINTAIN, OPERATE, EXTEND, REMOVE, REPLACE AND REPAIR A SYSTEM OF PIPELINES, GAS MAINS, LATERALS AND ATTACHMENTS AND ALL DESIRABLE INSTRUMENTALITIES IN, UNDER, OVER, ACROSS AND ALONG ANY AND ALL STREETS, AVENUES, PARKWAYS, SQUARES, ALLEYS AND ALL OTHER PUBLIC PLACES IN THE CITY OF HUNTSVILLE, WALKER COUNTY, TEXAS, FOR THE PURPOSE OF TRANSPORTING, DISTRIBUTING, SUPPLYING AND SELLING GAS (NATURAL AND/OR ARTIFICIAL AND/OR MIXED) FOR HEATING, LIGHTING, POWER, AND FOR ALL OTHER PURPOSES FOR WHICH GAS MAY BE USED, TO THE MUNICIPALITY OF SAID CITY OF HUNTSVILLE, TEXAS, AND ITS INHABITANTS AND OTHERS; PROVIDING CONDITIONS CONTROLLING THE USE OF PUBLIC THOROUGHFARES AND EXTENSIONS THEREIN; ESTABLISHING STANDARDS OF SERVICE; PROVIDING FOR PAYMENT OF FOUR PERCENT (4%) OF THE GROSS RECEIPTS FROM THE SALE OF GAS WITHIN THE CITY OF HUNTSVILLE AND SEVEN CENTS (7¢) PER MCF FOR THE TRANSPORTATION OF GAS TO TRANSPORTATION CUSTOMERS; PROVIDING FOR ACCEPTANCE; PROVIDING A SEVERABILITY CLAUSE; MAKING MISCELLANEOUS PROVISIONS; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH. BE IT ORDAINED BY THE CITY OF HUNTSVILLE: Section 1. The City of Huntsville, Walker County, Texas, (hereinafter referred to as "Grantor" or "City") does hereby grant unto Montgomery Gas Transmission, Inc., its successors and assigns (hereinafter referred to as "Grantee")the right,privilege and franchise to construct, install,lay, maintain, operate,use, extend, remove, replace and repair in,under, over, across and along any and all of the present and future streets, avenues,parkways, squares, alleys, thoroughfares, roads, highways, sidewalks,viaducts, bridges, streams, public grounds, public properties (including City building sites) and other public places in the City of Huntsville, and in all tracts, territories and areas hereafter annexed to or acquired by and placed within the corporate boundaries of said municipality, a system of pipes, pipelines, gas mains, laterals, conduits, feeders, regulators, meters, fixtures, connections, attachments and other desirable instrumentalities and appurtenances necessary or proper for the purpose of transporting, distributing, supplying and selling gas (natural and/or artificial and/or mixed) for heating, lighting, power and for any other purpose for which gas may now or hereafter be used in and to said municipality and its inhabitants or any other person or persons within or without the corporate boundaries of said municipality. Section 2. All facilities installed by Grantee shall be of sound material and good quality, and shall be laid so that they will not interfere with the artificial drainage of the Grantor or its underground fixtures, or with navigation in or the natural drainage of any stream. All facilities shall be installed in accordance with applicable Federal, State and City regulations and in the absence of such regulations in accordance with accepted industry practice. Within the public rights-of-way, the location and route of the facilities by the Grantee shall be subject to the reasonable and proper regulation, direction and control of the Grantor or the City official to whom such duties have been delegated. Such regulation shall include, but not be limited to, the right to require in writing to the extent provided in Section 13 the relocation of Grantees facilities at Grantee's cost within the public rights-of-way of the Grantor whenever such relocation shall be reasonably necessary to accommodate the widening, change of grade, or relocation by Grantor of -8- PAVERS SUPPLY COMPANY "Quality Road Building Materials Since 1978" P.O. BOX 2671 CONROE, TEXAS 77305 PAVERS SUPPLY CO. PHONE (936) 523-3278 FAX(936) 756-6903 PLANT LOCATIONS: CONROE(936)756-2722 HUNTSVILLE(936)291-6169 MONTGOMERY(936)597-6669 CLEVELAND(281)432-2722 November 27, 2012 Mr. Tom Weger City of Huntsville Public Works Department 448 State Hwy. 75 North Huntsville, Texas 77320 Subject: Construction of Natural Gas Service Line Dear Mr.Weger: Pavers Supply Company(PSC) is a producer of hot mix asphalt paving material. The PSC plant located at 1118 US 190 East, Huntsville, Texas 77340 is one of four plants operated by our company. The process used to make hot mix burns fuel to dry aggregates. Natural gas is the most plentiful and economic fuel available. The Huntsville plant is the only one of four plants not currently using natural gas for drying. An 18 month effort to secure natural gas supply from Centerpoint Natural Gas Services has resulted in an over budget installation price with a delayed construction schedule. Accordingly,Pavers Supply Company has entered into contract with Montgomery Gas Transmission, Inc., (MGTI)of Conroe, to provide the installation of the pipeline service and ongoing natural gas supply. MGTI supplies a second PSC plant and installed the gas line for a third PSC plant. The schedule for the Huntsville plant is to have the installation completed and operational by February 1,2013. This letter is to request every effort be made by the City of Huntsville to assist MGTI in the installation of this critical gas line service for our Huntsville plant. It is imperative that this project go forward quickly to enable continued economic production of our product. Your assistance is appreciated. Sinc rely, Gene Smith Secretary—Treasurer GS/gs Cc: Mr. Larry Corely, MGTI -7- streets or public rights-of-way, or construction or relocation by Grantor of City utility lines or drainage facilities or other construction projects. The Grantee and the Grantor shall work together to develop a procedure under which Grantee shall make available to the Grantor maps showing the location of Grantee's facilities within the corporate limits of the City. Section 3. Except as provided herein, Grantee expressly agrees that it shall not undertake major replacements or extensions of pipe, mains or other facilities within the boundaries of city parks currently owned or later established by Grantor without the prior written consent of the City of Huntsville. Grantee, however, shall not be required to remove or relocate its existing facilities in City parks established as of the date of this ordinance nor shall Grantee be required to remove or relocate existing facilities from land declared to be a City park subsequent to the date of this ordinance. Provided further, that Grantee shall not be required to obtain such prior written consent to perform routine maintenance or repairs of its facilities within city parks or when failure to repair, replace or extend such facilities would, in the good faith opinion of Grantee,pose a danger to public health or safety. Section 4. This Franchise shall extend to and include any and all territory that is annexed by the Grantor during the term of this Franchise. Within sixty (60) days from the receipt of notice from the Grantor of any such annexation,the Grantee shall assure that any and all customers within such annexed territory are included and shown on its accounting system as being within the corporate limits of the City of Huntsville. After such sixty (60) day period the payment provisions specified in Section 8 of this Franchise shall apply to gross receipts received by the Grantee from customers located within such annexed territory. Grantee shall true-up its map of City boundaries to the Grantor's map on an annual basis. Section 5. Grantee and its contractors shall give Grantor reasonable advance notice, of the dates, location and nature of all work to be performed on its facilities within the public rights-of-way.. While Grantee and Grantee's contractors must secure all permits that may be required, Grantee or Grantee's contractor shall not be required to pay any fee in addition to the franchise fee in order to perform work on Grantee's facilities within the parks, the streets and other public rights-of-way. Grantee's property shall be so constructed and maintained as not to interfere unreasonably with traffic over the public thoroughfares of said municipality and the same shall be laid in accordance with the lines, grades, and conditions established by Grantor. Following completion of work in the public rights-of-way, Grantee shall repair the affected public rights-of-way as soon as possible, but in all cases Grantee shall comply with all City ordinances governing time periods and standards relating to excavating in the public rights-of-way. No street, alley, highway or public place shall be encumbered for a longer period than shall be necessary to execute the work. Section 6. Grantee shall not be required to run or extend any pipe a distance exceeding one hundred (100) feet,not to exceed a diameter of two(2) inches, in order to bring gas service to the property line of each additional customer. Section 7. The service furnished hereunder by Grantee to the Grantor and its inhabitants shall be in accordance with the quality of service rules of the Railroad Commission of Texas and all other applicable local, state and federal regulations. Grantee shall furnish the grade of service to its customers as provided by its rate schedules and shall maintain its system in reasonable operating condition during the continuance of this Franchise. An exception to this requirement is automatically in effect,but only for so -9- long as is necessary, when caused by a shortage in materials, supplies and equipment beyond the control of the Grantee as a result of fires, strikes, riots, storms, floods and other casualties, governmental regulations, limitations and restrictions as to the use and availability of materials, supplies and equipment and as to the use of the services, and unforeseeable and unusual demands for service. In any of such events the Grantee shall do all things reasonably within its power to restore normal service as quickly as practicable. Section 8. In consideration of the rights and privileges herein granted, after the effective date of this ordinance, Grantee agrees to pay to Grantor quarterly during the continuance of this ordinance a franchise fee equal to four percent (4%) of the Grantee's gross receipts for the preceding calendar quarter received by the Grantee from the sale of gas within the corporate limits of the City of Huntsville plus seven cents (7¢) per Mcf for natural gas transported by Grantee for its Transport Customers during such quarter. "Transport Customer" means any person or entity for whom Grantee transports gas through the distribution or transportation system of Grantee within the corporate limits of City for consumption within the corporate limits of City. The franchise fees hereunder shall be calculated for the calendar quarters ending March 31,June 30, September 30,and December 31 and shall be payable on or before the fifteenth day of May, August,November, and February following the quarter for which payment is made, beginning with the first such date following the Effective Date of this Franchise and each August 15th, November 15th, February 15th, and May 15th thereafter; provided, however, the first such payment shall be prorated as necessary to reflect only those gross receipts received and transportation volumes delivered by Grantee after the Effective Date of this Franchise. If any payment due date required therein falls on a weekend or bank holiday, payment shall be made on or before the close of business of the first working day after the payment due date. All payments to Grantor shall be accompanied by a certified statement of Grantee in a form prescribed by Grantor. Upon receipt of such payments, the City Finance Officer shall deliver to the Grantee a receipt for such amount. In the event that Grantee does not provide gas service to customers within the corporate limits of the City of Huntsville or transport gas for consumption within the corporate limits of the City of Huntsville, then Grantee agrees to pay an annual franchise fee equal to $0.50 per foot of pipe occupying the municipal right-of-way during the year ("Annual Franchise Fee"). Such Annual Franchise Fee shall reimburse the municipality for administering, supervising, inspecting, and otherwise regulating the location of the gas pipeline facility,including maintaining records and maps of the location of the pipeline facility and the first annual payment shall payable within 30 days after the effective of date of this ordinance and thereafter each annual payment shall be payable on or before December 31" for the upcoming calendar year. Should Grantee fail to tender payment to Grantor within ten (10) days following the date such payment is due, Grantee shall pay to Grantor, as a late payment penalty, an additional amount equal to three percent (3%) of the amount otherwise payable to Grantor on such due date. The consideration hereinabove set forth shall be paid and received in lieu of any license,charge, fee,street or alley rental,or other character of charge for the use and occupancy for the streets, alleys and public places within the city, and in lieu of any pipe tax or inspection fee or tax, but shall not in any way increase or diminish Grantee's obligation to pay Grantor ad valorem taxes or in any way interfere with the collection thereof. Any special taxes, rentals or other charges accruing after the effective date of this ordinance, under the terms of any preexisting ordinance, or imposed upon Grantee by subsequent action of Grantor shall, when paid to Grantor, be applied as a credit to the amount owed to Grantor under the terms of this franchise agreement. Section 9. Grantee shall keep complete and accurate books of accounts and records of its business and operations under and in connection with this Franchise. All such books of accounts and records shall be kept at Grantee's principal office in Conroe,Texas. Grantor may conduct an audit or other inquiry or may pursue a cause of action in relation to the payment of the franchise fee. Each party shall bear its own costs of any such audit or inquiry. Upon - 10- receipt of a written request from Grantor, all books and records related to Grantee's operations under this Franchise shall be made available for inspection and copying no later than thirty(30) days from receipt of such request. Section 10. If the Legislature of the State of Texas amends the ceiling on utility gross receipts payments to municipalities established by Tex. Tax Code §182.025, then Grantor may prospectively change the percentage of Grantee's gross receipts payable to Grantor under Section 8 of this Franchise to the level established by such amendment. Section 11. GRANTEE, ITS SUCCESSORS AND ASSIGNS SHALL PROTECT AND HOLD GRANTOR AND ITS OFFICERS, AGENTS AND EMPLOYEES HARMLESS AGAINST ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO ANY PERSON OR PROPERTY BY REASON OF THE CONSTRUCTION AND MAINTENANCE OF GRANTEE'S NATURAL GAS DISTRIBUTION OR TRANSPORTATION SYSTEM, OR IN ANY WAY GROWING OUT OF THE RIGHTS GRANTED BY THIS FRANCHISE ORDINANCE, EITHER DIRECTLY OR INDIRECTLY, OR BY REASON OF ANY ACT, NEGLIGENCE OR NONFEASANCE OF GRANTEE OR THE CONTRACTORS, AGENTS OR EMPLOYEES OF GRANTEE, ITS SUCCESSORS AND ASSIGNS, AND SHALL REFUND TO GRANTOR ALL SUMS WHICH GRANTOR MAY BE ADJUDGED TO PAY ON ANY SUCH CLAIM, OR WHICH MAY ARISE OR GROW OUT OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED, OR BY THE ABUSE THEREOF, AND GRANTEE, ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY AND HOLD GRANTOR, ITS OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM AND ON ACCOUNT OF ALL DAMAGES, COSTS, EXPENSES, ACTIONS AND CAUSES OF ACTION THAT MAY ACCRUE TO OR BE BROUGHT BY A PERSON, PERSONS, COMPANY OR COMPANIES AT ANY TIME THEREAFTER BY REASON OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED,OR OF THE ABUSE THEREOF. Section 12. Grantee shall not prosecute or maintain any claims against Grantor or its employees for any damage or injury to Grantee's pipelines or facilities resulting from Grantor's performance of work or repairs upon city streets; provided, however, that the provisions hereof shall in no way limit Grantee's right to prosecute or maintain any such claim against any person, association, or corporation other than Grantor or its employees. Section 13. The Grantee shall, upon written request of the Grantor, relocate its. facilities within public rights-of-way at Grantee's own expense whenever such shall be reasonably necessary on account of the widening, change of grade, or relocation by Grantor of streets or public rights-of-way, or construction or relocation by Grantor of City utility lines or drainage facilities or other construction projects. Section 14. Grantor, by granting of this ordinance, does not surrender or to any extent lose, waive, impair or lessen the lawful powers,claims and rights now or hereafter vested in Grantor under the Constitution and statutes of the State of Texas and under the Charter of the City of Huntsville to regulate public utilities within Grantor's city limits, to regulate the rates of public utilities within Grantor's city limits and to regulate the use of the streets by Grantee; and Grantee,by its acceptance of this ordinance, agrees that all lawful powers and rights,whether regulatory or otherwise, as are or as may be from time to time vested in - 11 - or reserved to Grantor, shall be in full force and effect and subject to the exercise thereof by Grantor at any time and from time to time. All of the regulations and activities required by this Franchise are hereby declared to be governmental and for the health, safety and welfare of the general public. Section 15. In the event Grantee, by act or omission, violates any term, condition or provision of this ordinance, Grantor shall notify Grantee in writing of such violation. Grantee shall correct any such violation within thirty(30)days of receipt of such notice. Should Grantee fail or refuse to correct any such violation within such thirty (30) day period, Grantor may terminate this agreement by ordinance adopted by the City Council of the City of Huntsville; provided, however, before any such ordinance is adopted, Grantee must be given at least sixty (60) days advance written notice, which notice shall set forth the causes and reasons for the proposed termination and cancellation, and shall advise the Grantee that it will be provided an opportunity to be heard by the City Council of the City of Huntsville regarding such proposed action before any such action is taken and shall set forth the time, date and place of the hearing. Other than its failure, refusal or inability to pay its debts and obligations, including, specifically, the payments to Grantor required by this ordinance, Grantee shall not be declared in default or be subject to any sanction under any provision of this ordinance in those cases in which performance of such provision is prevented by reasons beyond its control; provided, however, that such performance shall not be excused when based solely upon financial limitations of Grantee. Section 16. Subject to the terms, conditions and restrictions stated herein,within five(5)years of,but not less than twelve(12)months before,the expiration of the term of this Franchise, Grantor shall have the option to purchase Grantee's distribution or transportation system within the corporate limits of Grantor. Grantor must present Grantee with written notice of Grantor's intent to exercise its option to purchase the franchised property. Within thirty (30) days of receipt of notice, Grantee shall make a written offer(the "Offer") stating the cash price for the purchase and sale of said distribution or transportation system. Within twenty (20) days of Grantor's receipt of the Offer, Grantor will submit written notice rejecting or accepting the Offer. Should Grantor reject the Offer, Grantor and Grantee shall enter into good faith negotiations to determine a cash price to be paid by Grantor for said distribution or transportation system. Failure of Grantor and Grantee to agree on a cash price for Grantee's distribution or transportation system shall not constitute grounds for termination or cancellation under Section 15 of this ordinance. Should Grantor accept the Offer or should Grantee and Grantor reach an agreement on a cash purchase price after good faith negotiations, Grantee shall not be required to sell or transfer said distribution or transportation system to Grantor until the expiration of the term of this Franchise or such earlier time as may be mutually agreeable to Grantee and Grantor. The foregoing notwithstanding, Grantor shall not purchase Grantee's distribution or transportation system until the matter of the acquisition of such property has been submitted at a municipal election to be determined by a majority vote of the qualified taxpayers voting therein. Nothing in this Franchise shall be construed as limiting or otherwise affecting Grantor's authority to acquire franchised property under Grantor's powers of eminent domain. Section 17. Nothing herein contained shall ever be held or considered as conferring upon Grantee and its successors and assigns any exclusive rights or privileges of any nature whatsoever. Section 18. This ordinance shall not be assigned by Grantee without the authorization and approval of Grantor. - 12- Section 19. All ordinances and parts of ordinances in conflict herewith are hereby repealed. Section 20. Grantor and Grantee hereby acknowledge that all of the provisions hereof are the result of negotiations between Grantor and Grantee. The provisions of this ordinance shall be constructed fairly and reasonably and not more strictly against the party drafting such provisions than against the non- drafting party. Section 21. This ordinance shall take effect and continue and remain in effect for a period of ten (10) years from and after the date which is sixty(60) days after the adoption and passage of this franchise ordinance; provided Grantee files a written acceptance of this franchise ordinance with Grantor within thirty (30) days after final passage of this franchise ordinance. Section 22. If any provision, section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be unconstitutional,void or invalid(or for any reason unenforceable),the validity of the remaining portions of this ordinance shall not be affected thereby, it being the intent of Grantor in adopting this ordinance that no portion hereof or provision or regulation contained herein shall become inoperative or fail by reason of any unconstitutionality or invalidity of any other portion,provision or regulation, and to this end,all provisions of this ordinance are declared to be severable. � I j Presented to the City Council at a regular meeting of the City Council of the City of j Huntsville,Texas, on this day of—­Witcnr" 2013. I Presented, passed and adopted at a regular meeting of the City Council of the City of Huntsville, Texas, on this day of � 2013, and approved by the Mayor. APPROVED: Mac Woodwar , May r City of Huntsville, Texas ATTEST: APPROVEP AS TO FORM: City Secreta Leo Schneider, City Attorney (.jLeeoodiward, of Huntsville,Texas Ci Huntsville, Texas i i I - 13- TO THE CITY OF HUNTSVILLE,TEXAS: Montgomery Gas Transmission, Inc. itself, its successors and assigns, hereby accepts the above and foregoing ordinance and agrees to be bound by all of its terms and provisions. Dated this the day of 2013. MONTGOMERY GAS TRANSMISSION, INC. {Name and Title of Authorized Agent} NOTE TO THE CITYE S CRETARY: Please do not complete the certificate below until an officer of Montgomery Gas Transmission, Inc., has executed the Acceptance above. THE STATE OF TEXAS § COUNTY OF WALKER § I, the duly appointed, qualified and acting City Secretary of Huntsville, Texas, hereby certify that the above and foregoing Acceptance was received and filed in the office of the City Secretary of Huntsville,Texas, on the day of , 2013. Lee Woodward, City Secretary of Huntsville, Texas [SEAL] - 14- City Council Meeting Agenda Item Item Title Date: Agenda Item No . ._ .__ . .. . _------- _-- _ ;Montgomery Gas Transmission Franchise Requested By Dept/Div Dept Approval Finance approval Mont omer Gas Transmission Inc. f700 AK 9 __.Y _.... __ _._.__ 1 _m _ i City Attorney Review Purchasing Approval City Manager Approval `M B Issue/Item Description: Consider an ordinance granting the request of Montgomery Gas Inc. for a gas franchise to lay a gas line within the city limits and right-of-way to serve Paver's Supply.. Strategic Initiative Reference: !Huntsville is a well-managed, sustainable community that values its natural resources and ;provides exceptional public services. .._ _.........................................------ ,.-. _......... Background: In December of 2012 staff received a request from Montgomery Gasc. �...d 6 q g ry s Inc. and Paver's Supply for permission to use a City utility easement along Highway 190 in order to !supply natural gasfor Pavers Supply's operations. Montgomery Gas is proposing to construct ;approximately 10,000 feet of 6" gas line beginning at an existing Gulf South pipeline located just €north of Old Colony Road at Highway 19, south along Highway 19 to Highway 190, and then i!east along the south side of Highway 190 in a City of Huntsville easement to its termination point at Paver's Supply. The section of pipe within the City's easement will be approximately 3,500 feet in length. The attached map shows a graphic depiction of the proposed location of the ' Iline. i £In order to run utility lines through the city limits and potentially serve future customers within 'Huntsville, the City must grant a franchise. The granting of the franchise must be done in accordance with state law and the City Charter. The attached ordinance grants the franchise land sets payment amounts for serving customers as well as an annual administrative fee for `using the City's rights-of-way. Since none of the customers served by this gas line are within the corporate limits of Huntsville, the only fee charged at this time is the $0.50 per foot of gas !line through the utility easement. This administrative fee was calculated at a rate similar to the permit fees required for a developer for the installation of public improvements. The City (charges a fee of 3% of the total cost of improvements for the permit; in the case of this request Ithe amount resulted in approximately $0.50 per foot. i The attached letters from Paver's Supply and Montgomery Gas Transmission Inc. provide further i background on the request. Facts to Consider: -3- • Montgomery Gas Transmission, Inc. is requesting permission to use a city utility easement along Highway 190 to construct a gas line to serve Paver's Supply. . Approximately 10,000 feet of gas line will be constructed within Huntsville with about 3,500 feet within a City utility easement. . The City will grant a franchise to Montgomery Gas Transmission, Inc. for a period of ten (10) years to allow them to use the City's rights-of-way by ordinance. . The annual franchise fee is based upon permit fees required for construction of public improvements. Fiscal I_m_pact/Funding Source(s): 'Annual revenue at this time of $1,750 peryearto the Street Fund for franchise fee. Future `revenue source if additional customers are added within the City limits. Attachment(s): • Letter from Montgomery Gas Transmission, Inc. . Letter from Paver's Supply Company . Ordinance 2013-10 • Location Map Re_c_o_m_m_e_nded_motion(s): ;Second reading - Adopt ordinance LLas submitted MOTION: I " SECOND: F VOTE: PRESENTED APPROVED I- DECLINED ACTION F TABLED i C OTHER ._ . .._. ._. ...�w_._ ..___ -4- MONTGOMERY GAS TRANSMISSION, Inc. 620 Longmire Road Conroe,Texas 77304 PHONE:936-539-1800 FAX 936-539-1801 November 30, 2012 City of Huntsville Mr. Tom Weger 448 State Hwy 75 North Huntsville, Texas 77320 Dear Mr. Weger, Montgomery Gas Transmission, Inc. (MGT) is a Public Utility established in 2003 and is regulated by the Texas Railroad Commission. MGT plans to construct approximately 10,000 feet of 6" HDPE (yellow strip) poly pipe to deliver Natural Gas to Pavers Supply Company located at 1118 US 190 East. A contract to construct the 6" pipeline to Pavers Supply Company was executed on October 18, 2012. The proposed pipeline route will begin at a new tap and interconnect point with Gulf South Pipeline Company's existing 6" pipeline located just north of Old Colony Road (approximately 830 ft.) and on the east side of Hwy 19. The new 6" pipeline will traverse just inside the eastern rights-of-way line of Hwy 19 headed in a southerly direction until reaching Hwy 190. The pipeline will then turn east at Hwy 190 and generally be installed on the south side of Hwy 190. MGT is requesting permission to utilize the City's existing waterline easement for a e a portion of the Hwy 190 route. The distance approximately 3,500 feet along p y pipeline is planned to operate at approximate 55 psig. MGT will agree to relocate this proposed pipeline at its sole costs and expense should the City determine the pipeline is in anyway in conflict with its future construction plans. As a Public Utility, MGT can transport and/or sell Natural Gas to other third party companies should such a third party request service. At this time MGT have no other plans to transport and/or sell Natural Gas to any other customer(s). The current status of this project as of November 30 is as follows: • An Interconnect Agreement with Gulf South Pipeline was requested on October 25"' and the Meter and Regulating Station design is being finalized and fabrication to begin soon. - 5- • The site for the Meter and Regulation Station has been purchased. • The TXDOT permit(s) to allow the proposed pipeline to be located within Hwy 19 and Hwy 190 rights-of-way have been filed and are being processed. • The formal survey of the pipeline route has been completed and drawings are being prepared. • The beginning of construction is tentatively scheduled for on or about January 15, with an in-service date of February 1st. i I If you have any questions or need additional information, please do not hesitate to contact us. Sincerely, Larry D. Corley Operations -6- cn CONROE GAS MAIN / PAVERS SUPPLY PROPOSED GAS ROUTE w E 1 inch = 1,000 feet s City Council Meeting Agenda Item Item Title: Date: Agenda Item No.: =Presentation-Downtown ROW Encroachm...1 1/22/2013 Requested By: Dept./Div: Dept. Approval: Finance approval: 'Bert Lyle, owner of the Facemaker W 700 AK .,.«F a...............................................................,..�... �.... ..moi City Attorney Review Purchasing Approval City Manager Approval IMB i Issue/Item Description: _ ............. lPresentation in regards to enclosing an existing balcony located at 1105 12th Street in the Downtown district. .__ Strategic Initiative Reference: :Huntsville is a well-managed, sustainable community that values its natural resources and ;provides exceptional public services Background:_ ;The owner of the Facemaker, Bert Lyle, located at 12th street downtown, approached city staff An regards to enclosing the balcony of his building. The existing balcony and its foundation are !located in the Right-of-Way of 12th street and were constructed quite some time ago. The ;owner indicated that he simply wishes to enclose the balcony with windows and to make it a ;heated and cooled space. All necessary permits will be obtained and the project will be required oto meet all applicable building codes. !None of the City's utilities servicing the south side of this block will be impacted by the construction of the enclosure. Staff has also contacted other utilities that provide service to the ' downtown area, and the enclosure of the balcony will have no impact on their ability to provide service greater than the existing conditions. I =The City, by charter, has the right to regulate the use of the ROW. In this case, the owner is tasking permission to change his use for the portion of the structure already within the ROW. Should the Council believe that this is a feasible project, staff will draft the appropriate 'documents for an encroachment easement outlining the details of the encroachment for future =Council consideration. I Facts to Consider: . The owner of the Facemaker wishes to enclose his balcony to increase occupancy space . The existing balcony encroaches the ROW for 12th Street . The enclosing of the balcony will not impact any utilities greater than the current impact of the balcony and similar awnings located nearby . Staff will prepare the appropriate documents based upon direction of the Council - 16-