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ORD 2013-10 - Montgomery Gas Transmission 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 ftumish 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 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 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 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 wider 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 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. Presented to the City Council at a regular meeting of the City Council of the City of Huntsville,Texas,on the 8's day of January 2013. Presented, passed and adopted at a regular meeting of the City Council of the City of Huntsville,Texas,on this 22"" day of January 2013,and approved by the Mayor. APPROVED: Mac Woodw d, May City of Huntsville, Te as ATTEST: APPROVED AS TO FORM: 4Le ward,City Secre Schnei er, City Attorney untsville,Texas 641d 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. 19a'--j 'J _ {Name and Title of Authorized gent) p esederit- 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 § 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 W C dwar , Cit cretary of Huntsville, Texas [SEAL]