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HomeMy WebLinkAboutOrdinance 2013-413 • NATURAL GAS FRANCHISE AGREEMENT ORDINANCE NO.2013-q 13 AN ORDINANCE OF THE CITY OF SUNNY ISLES BEACH, FLORIDA GRANTING TO PEOPLES GAS SYSTEM, A DIVISION OF TAMPA ELECTRIC COMPANY,A FLORIDA CORPORATION ITS SUCCESSORS AND ASSIGNS, A NON-EXCLUSIVE NATURAL GAS FRANCHISE AGREEMENT TO USE THE PUBLIC RIGHTS OF WAY OF THE CITY OF SUNNY ISLES BEACH,FLORIDA,AND PRESCRIBING THE TERMS AND CONDITIONS UNDER WHICH SAID FRANCHISE MAY BE EXERCISED; MAKING FINDINGS; PROVIDING FOR ACCEPTANCE; PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE; AND REPEALING PRIOR ORDINANCE. WHEREAS, Peoples Gas System and the City of Sunny Isles Beach desire to enter into a franchise agreement for a period of ten(10) years commencing from the date provided herein; and WHEREAS, the City Commission finds that it is in the public interest of its citizens to enter into a new franchise agreement with Peoples Gas System. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS: SECTION 1: DEFINITIONS For the purposes of this Ordinance, the following terms shall have the meaning given herein. A. "Customer" shall mean any Person served by the Company within the corporate limits of the City. B. "City" shall mean the City of Sunny Isles Beach, Miami-Dade County, Florida, its successor and assigns. C. "Company" shall mean Peoples Gas System, a division of Tampa Electric Company, a Florida corporation, its successors and assigns. D. "Distribution System" shall mean any and all transmission pipe lines, main pipe lines and service lines, together with all tubes, traps, vents, vaults, manholes, meters, gauges, regulators, valves, conduits, attachments, structures and other appurtenances, as are used or useful in the sale, distribution, transportation or delivery of Natural Gas and as are situated within the corporate limits of the City. 1 E. "Effective Date" shall mean the date this Franchise becomes Effective as described in Section 20 below. F. "Franchise"or"Franchise Agreement"shall mean this agreement,as passed and adopted by the City and accepted by the Company, as provided in Section 20 below. G. "FPSC"shall mean the Florida Public Service Commission or any successor agency. H. "Gross Revenues" shall mean all revenues(as defined by the Florida Public Service Commission) received by the Company from any Customer from the sale of Gas. I. "Person" shall mean any individual, firm, partnership, estate, corporation, company or other entity, including, but not limited to, any government entity or municipally-owned utility. J. "Natural Gas" of "Gas" shall mean natural gas and/or manufactured gas and/or a mixture of gases which is distributed in pipes and measured by meter on the Customer's premise. It shall not mean propane gas or liquefied petroleum gas (commonly referred to as "bottled gas"). K. "Right-of-way" means any street, road, lane, highway, avenue, boulevard, alley, waterway, bridge, easement,public place or other right-of-way that is owned by the City. SECTION 2: GRANT The City hereby grants to the Company the non-exclusive right,privilege, and franchise to lay, erect, construct, operate and maintain in, on or under any and all Rights-of-way, as they now exist or may be hereafter constructed, opened, laid out or extended within the present incorporated limits of the City, or in such territory as may be hereafter added or annexed to, or consolidated with, the City, a Distribution System subject to the terms and conditions herein contained. SECTION 3: TERM Except as provided in Section 16, the Franchise hereby granted shall be for a period of ten (10) years from the effective date of this ordinance; provided, however, that the Franchise will automatically renew for one (1) ten (10) year renewal term until such time as one of the parties 2 notifies the other, with no less than one hundred and eighty(180) days' written notice,prior to the expiration of the initial term, that i p it does not want the Franchise to automatically renew. If either party elects not to renew the Franchise, then the Franchise shall expire upon the conclusion of the initial term. SECTION 4: ASSIGNMENT A. The Franchise hereby granted shall not be leased, assigned or otherwise alienated or disposed of except with the prior express written consent of the City, which shall not be unreasonably withheld or unduly delayed. No assignment shall be allowed without the assignee assuming the terms of the Franchise Agreement with the City . B. Notwithstanding the foregoing, the Company may, without the consent of the City, lease, assign or otherwise alienate and transfer this Franchise to one of its affiliates. SECTION 5: CITY COVENANT As a further consideration for this Franchise Agreement,the City covenants and agrees that it will not, during the term of this Franchise Agreement or any extension thereof, en a e in the business of distributing or selling Natural Gas within the corporate limits of the City, as modified, during the term of this Franchise Agreement. SECTION 6: USE OF STREETS The Distribution System shall be erected, placed, or laid in such manner as will, consistent with necessity, least interfere with other public uses of the Rights-of-way, and said Rights-of-way shall not be unnecessarily obstructed, and before, except in an emergency situation, the Company makes any excavation or disturbs the surface of any of the Rights-of-way, it shall make application for a permit to the appropriate City authority. The City shall issue, or if applicable deny, permits within a reasonable time frame of application by the Company. In consideration of the franchise fees contemplated in this agreement, the City shall not charge the Company any fees for the issuance of such permits. The Company shall, with due diligence and dispatch,place such Rights- 3 of-way in as good a condition as before such excavation or disturbance was made; provided, however, that should the Company fail, within ten (10) days of its receipt of written notice from the City, to restore such Rights-of-way, then the City may undertake such restoration (other than any restoration work on the Distribution System) and charge the reasonable cost thereof to the Company. SECTION 7: MAINTENANCE All such components of the Distribution System of the Company located within the City shall be installed and maintained in accordance with accepted good practice and in accordance with the orders, rules, and regulations of the Florida Public Service Commission. SECTION 8: LAYING OF PIPE All components of the Distribution System shall be laid consistent with all applicable codes, rules, regulations and laws, including, to the extent consistent with all applicable codes, rules, regulations and laws, specifications contained in City permits. SECTION 9: CONSTRUCTION WORK The City reserves the right to permit to be laid Company's facilities in, across, along, or under any Right—of-way. For purposes of this section, the term "Company's facilities" refers to the assets of the Company used in connection with the transmission and distribution of natural gas (including, without limitation, pipelines, compressor stations, valves, storage facilities and terminals). For the avoidance of doubt, the term "Company's facilities" excludes electric conduits and electric lines. Whenever, by reason of establishing a grade or by reason of changes in the grade of any Right-of-way, or by reason of the widening, grading,paving, or otherwise improving present or future Rights-of-way, or in the location or manner of construction of any water pipes, electric conduits, sewers, or other underground structure located within the Rights-of-way, it shall be deemed necessary by the City to remove, relocate or disconnect any portion of the Distribution System of the Company hereto for such public purpose, such removal,relocation or disconnection 4 shall be made by the Company as ordered in writing by the City without claim for reimbursement. If the City shall require the Company to remove, relocate or disconnect any portion of its Distribution System or in any way to alter the placement or location of the Distribution System,to enable any other Person to use said Rights-of-way of the City, as part of its permitting or approval process, the City shall require the Person desiring or occasioning such removal, relocation, disconnection or alteration to reimburse the Company for any loss, cost or expense caused by or arising out of such removal, relocation, disconnection or alteration of any portion of the Distribution System. The Company further agrees that it will not intentionally interfere with, change, or injure any water pipes, drains, or sewers of said City unless it has received specific permission from the City or its duly authorized representative. SECTION 10: FRANCHISE FEE Subject to Section 11 below, within thirty (30) days after the close of the first full billing month following the effective date of this Franchise Agreement, and each month thereafter during the term of this Franchise Agreement,the Company, its successors or assigns, shall pay to the City, or its successors, a sum of money equal to six percent(6%)of the Company's Gross Revenue, less any adjustments for uncollectable accounts, from the sale of Natural Gas to Customers within the corporate limits of the City. The franchise fee payment shall be deemed paid on time if post- marked within thirty (30) days of the close of the preceding billing month. SECTION 11: IDENTIFICATION OF CITY RESIDENTS If the City adds,annexes, acquires or consolidates new territory,the City shall provide such geographic boundary information(including City limit streets and block numbers) as is needed by the Company to determine which of its customers are located within the City limits no less than thirty (30) days prior to the effectiveness of any change in said geographic boundaries of the City, whether by addition, annexation, acquisition or consolidation. The Company shall be relieved of any obligation to pay franchise fees to the extent the City has failed to provide the geographic 5 boundary information. This foregoing sentence shall not apply if the City does not add, annex, acquire or consolidate any new territory. SECTION 12: ACCOUNTS AND RECORDS The Company shall maintain accounting, maintenance, and construction records as prescribed by the FPSC. The Company shall establish and maintain appropriate accounts and records in such detail that revenues within the corporate limits of the City are consistently declared separately from all other revenues,and such records shall be maintained within the State of Florida. Upon request by the City, or its designated representative, and execution of a confidentiality agreement reasonably satisfactory to the Company(which agreement shall be subject to applicable law, including, without limitation, public records laws), the Company shall make available said records within thirty (30) days to the City for the determination of the accuracy of the Gross Revenues upon which the Company's franchise fee is based. The Company shall maintain its billing records only for the period of time required by the FPSC and any examination conducted after such period shall be confined to the billing records then available. SECTION 13: INSURANCE During the term of this Franchise, the Company shall file with the City Manager and shall keep in full force and effect at all times during the effective period hereof, insurance certificates evidencing a general liability insurance policy or policies or evidence of self-insurance within the corporate limits of the City, as they currently exist or may exist in the future. Each such policy shall be in the minimum sum of$5,000,000.00, and said minimum sum shall remain in full force and shall be undiminished during the effective period of this Ordinance. The coverage requirements set forth in this Section 13 may be satisfied, in whole or in part, with self-insurance. Every such insurance policy shall contain a provision whereby every company executing the same shall obligate itself to notify the City Manager, in writing, at least thirty (30) days before any material alteration, modification, or cancellation of such policy is to become effective. 6 1 SECTION 14: INDEMNIFICATION In consideration of the permissions granted to the Company by this Franchise Agreement, the Company hereby agrees to indemnify and hold harmless the City, its officers, agents and employees from and against claims, suits, actions, and causes of action, to the extent caused by any negligence, act or omission of the Company, its employees, agents, contractor, licensees, or sublessees in connection with the Distribution System within the City during the term of this Franchise and resulting in personal injury, loss of life or damage to property sustained by any person or entity, through or as a result of the doing of any work herein authorized or the failure to do work herein required or the use of the public streets for the purposes authorized herein, and including all reasonable costs, attorney's fees, expenses and liabilities incurred by the City in connection with any such claim, suit or cause of action, including the investigation thereof, and the defense of any action or proceeding brought thereon and any order,judgment or decree which may be entered in any such action or proceeding or as a result thereof; provided, however, that neither the Company nor any of its employees, agents, contractor, licensees, or sublessees shall be liable under this section for any claims, demands, suits, actions, losses, damages, or expenses, including attorney's fees, arising out of the negligence, strict liability, intentional torts, criminal acts, or error of the City, its officers, agents, or employees. The provisions of this section shall survive the expiration or earlier termination of this Franchise Agreement. SECTION 15: PARITY In the event the Company enters into a franchise agreement with another Florida governmental entity in Miami-Dade,Broward or Palm Beach Counties,under which franchise fees are based upon a percentage of gross revenue that is higher than six percent (6%) of Company's sales of natural gas to customers under such franchise, then the percentage basis of the Franchise Fee used in this Franchise shall be adjusted to provide for a Franchise Fee that equals the value of 7 L franchise fees that would result in the event that the percentage used in such other franchise agreement were applied to the Gross Revenues less any adjustments for uncollectible accounts, from the sale, transportation, distribution or delivery of natural gas to customers in the City and such adjustment shall be effective as of the first day of the month following the commencement date of the franchise for such other Florida governmental entity. If, during the term of this Franchise Agreement, the City, by franchise agreement or ordinance, allows other gas providers, gas consumers or gas transporters ("Alternate Gas Providers") the right, privilege or franchise to construct, maintain, operate or use gas facilities in, under, upon, over or across the present or future streets, alleys, bridges, easements or other public rights of way of the City for the purpose of supplying or delivering Natural Gas to customers located within the corporate limits of the City or receiving such gas from a person other than the Company within such corporate limits, and imposes a franchise compensation obligation or an equivalent on such Alternate Gas Provider for any customer or class of customers that is less than that imposed with respect to the same Customer or class of Customers under this Franchise Agreement,the franchise compensation rate and/or base to which such rate is applied with respect to the same class of customers shall be reduced under this Franchise Agreement so that the franchise compensation paid hereunder for such Customer class is no greater than the franchise compensation payable by such Alternate Gas Provider under the franchise agreement or ordinance applicable to it,when compared on a dollars-per-therm basis. In the event that the City determines not to impose any franchise compensation by agreement, ordinance or otherwise on any such Alternate Gas Provider, the Company's obligation to pay a franchise fee under this Franchise Agreement with respect to revenues derived from the provision of service by the Company to the comparable class of customers served by such Alternate Gas Provider thereafter shall be extinguished. 8 SECTION 16: TERMINATION BY CITY Violation by the Company of any of the covenants, terms, and conditions hereof, or default by the Company in observing or carrying into effect any of said covenants, terms and conditions, shall authorize and empower the City to declare a termination of this Franchise Agreement; provided, however, that before such action by the City shall become operative and effective, the Company shall have been served by the City with a written notice setting forth all matters pertinent to such violation or default, and describing the action of the City with respect thereto, and the Company shall have had a period of sixty (60) days after service of such notice, or, in the event such cure reasonably requires a period of more than sixty (60) days, sixty (60) days to present a plan,reasonably satisfactory to the City,to effect such cure;and provided further that any violation or default resulting from a strike, a lockout, an act of God, or any other cause beyond the control of the Company shall not constitute grounds for termination. SECTION 17: CHANGES IN PROVISIONS HEREOF Changes in the terms and conditions hereof may be made by written agreement between the City and the Company. SECTION 18: SEVERABILITY; CHANGE IN LAW (A) If any section, part of a section, paragraph, sentence, or clause of this Ordinance shall be adjudged by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of any other portion hereof,but shall be restricted and limited in its operation and effect to that specific portion hereof involved in the controversy in which such decision shall have been rendered; provided, however, that should elimination of the specific portion of the Franchise Agreement adjudged to be invalid result in significant adverse consequences to a party, then that party may terminate this Franchise Agreement by providing thirty (30) days written notice to the other party. 9 I (B) Upon the issuance by a court of competent jurisdiction of an order, ruling, or decision, or the enactment or adoption by the Florida Legislature, the City or any other governmental or regulatory body,of a law,rule,regulation or ordinance,that materially diminishes a municipality's ability to exact franchise fees from a utility, or that effectively does away with the ability of a municipality to grant a franchise altogether, then the Company or City may terminate this Franchise Agreement by providing ninety(90)days written notice to the other party. SECTION 19: GOVERNING LAW AND VENUE This Franchise shall be governed by the laws of the State of Florida and applicable federal law. Venue for litigation concerning any controversy or dispute under this Agreement shall be held in Miami-Dade County, Florida. SECTION 20: EFFECTIVE DATE 1 This Franchise Agreement shall become effective upon its acceptance by the Company, which acceptance must be evidenced in writing within sixty (60) days of the City's passage and adoption hereof. PASSED AND ADOPTED on First Reading the 19 day of Si C. , 2013. PASSED AND ADOPTED on Second Reading this itday of ©c* , 2013. ,, ---24>)1474"7/ii 4/ N'rman S. Edelcup AYOR ,�., • 1 _ ATTE , ��`__ Jane A. Hines, CMC CITY CLERK APPROVED AS TO FORM AND LEGA SU ENCY '/ . 1` -/ S IP in. , sq. • TY ATTORNEY 10 I `/ I Motion on second reading by: Y I CA trilp,rc,t-(o,3 Second on second reading by: Ci c _____ VOTE AS FOLLOWS: 5-C) Mayor Edelcup V(Yes) (No) Vice Mayor Aelion ✓(Yes) (No) Commissioner Gatto V (Yes) (No) Commissioner Levin V(Yes) (No) Commissioner Scholl ✓(Yes) (No) ACCEPTANCE: Peoples Gas System, a division of Tampa Electric Company confirms the acceptance of the Franchise Agreement with the City of Sunny Isles Beach this 3 day of va-rh bz.r , 2013 PEOPLES GAS SYSTEM, A DIVISION OF TAMPA ELECTRIC COMPANY BY: (,,trik L . Title: 'v-q t .)) 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N ro-o ca 44) _ y?, c iZO V 0 0 ZUy0 U 2'3.7°Nu E owa m D m c o N 9m . o m w ° 6 <' w oQ w N E o d Q y LL C) = 2 E V ° m--n_ m D °,- >a n oc. m c c f 0 > ` '7” U . c > 0 3 c . nf E o, 00" =.a •E nY �a o2 La as m .6.Z im ° >EE nn >, - EaE¢ i n aU o°v£ o _a N f--an n,0N an ° o acv2 a QO Q r M 1 I Commission SJNNY Este City of Sunny Isles Beach Norman S.Edelku p, ayor 18070 Collins Avenue Isaac Aelion,Vice Mayor n Jeanette Gatto,Commissioner i Sunny Isles Beach,Florida 33160 Jennifer Levin,Commissioner _ (305)947-0606 City Hall George"Bud"Scholl,Commissioner (305)949-3113 Fax 99' \O eP (305)947-2150 Building Department Christopher J.Russo,City Manager * F t.o a 5 (305)947-5107 Fax Hans Ottinot,City Attorney o F s u N ° Jane A.Hines,CMC,City Clerk MEMORANDUM TO: Honorable Mayor and City Commission FROM: Hans Ottinot,City Attorney DATE: September 19, 2013 RE: Ordinance granting to Peoples Gas System a new Franchise Agreement RECOMMENDATION It is recommended that the City of Sunny Isles Beach (the "City") adopt the proposed Ordinance granting Peoples Gas System a non-exclusive natural gas franchise agreement. REASONS In 1998, the City previously granted to Peoples Gas System, a non-exclusive franchise agreement for a period of fifteen (15) years to construct, operate and maintain a gas system facilities in the City. The agreement has expired and the City now wishes to enter into a renewed franchise agreement with Peoples Gas System. There are no major changes between this proposed renewed franchise agreement and the original agreement from 1998. The salient features of the renewed agreement are as follows: 1. The initial term of the renewed franchise agreement shall be for ten (10) years with an additional renewal term of ten (10)years; 2. The City is granting a non-exclusive right for Peoples Gas System to use the public rights of way of the City to construct, operate and maintain a gas distribution system; 3. Peoples Gas System agrees to keep in full force during the term of this renewed franchise agreement $5,000,000.00 (five million dollars)in insurance to protect the City's interests; 4. Peoples Gas agrees to pay to the City a franchise fee equal to six percent (6%) of its gross revenue from the sale of natural gas to customers located within the City; and 5. Peoples Gas System agrees to provide a "most favored nation/parity" clause that ensures the City will receive the same percentage basis of franchise fees used in similar franchise agreements with other municipalities in Miami-Dade, Broward or Palm Beach. Agenda Item_ Date (d-n- 13