ORDINANCE
NO. 8237
AN ORDINANCE GRANTING TO
ATMOS ENERGY CORPORATION ITS SUCCESSORS AND ASSIGNS, A NON
EXCLUSIVE NATURAL GAS FRANCHISE AND THE RIGHT AND PRIVILEGE TO CONSTRUCT, USE
AND MAINTAIN NATURAL GAS SERVICE LINES IN THE PUBLIC RIGHT-OF-WAY WITHIN THE
PRESENT OR FUTURE CORPORATE LIMITS OF THE CITY OF LAWRENCE, KANSAS FOR THE
PURPOSE OF SUPPLYING NATURAL GAS SERVICES TO THE CITY OF LAWRENCE, KANSAS AND
ITS INHABITANTS PURSUANT TO K.S.A. 12-2001 ET SEQ.
BE
IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF
(A) The Company shall mean
Atmos Energy Corporation its successors and assigns.
(B) City shall mean the City of
Lawrence, Kansas.
(C) Facilities shall mean all
mains, services, pipes, conduits and appliances and improvements thereto,
either under or above ground, necessary or convenient for the transmission,
transportation, distribution, or sale of natural gas within the city to the
inhabitants thereof for any use, including domestic, commercial, and industrial
purposes.
(D) Gas Service shall mean the
supplying, selling, transmitting, transporting, or distributing of natural gas
within the city through the use of Company facilities.
(E) Public
improvement shall mean any existing or contemplated public facility,
building or capital improvement project, including, without limitations,
streets, alleys, sidewalks, sewer, water, drainage, right-of-way improvement
and public projects, which are supported by public funds.
(F) Public project shall mean
any project planned or undertaken by the City or any governmental entity for
construction, reconstruction, maintenance or repair of public facilities or
public improvements, or any other purpose of a public nature, which is
supported by public funds.
(G) Right-of-way shall mean
present and future streets, alleys, avenues, bridges, public rights-of-way, and
public utility easements, including public utility easements and right-of-way
dedicated in plats to the City.
(H) Gross Rate shall mean gross
receipts derived from the sale or distribution of natural gas, including
customer service charges.
Section 2. Grant of Franchise.
(A) Pursuant to K.S.A. 12-2001 et seq. there
is hereby granted to the Company the right, privilege, franchise, permission
and authority to construct, maintain, extend and operate its facilities, in
through and along the rights-of-way for the purpose of supplying natural gas or
processed gas for all purposes to the City and its inhabitants and consumers in
the vicinity thereof, and for the distribution of natural gas from or through
said City for the full term of this franchise; subject, however, to the terms
and conditions herein set forth. The City further grants the Company the right,
privilege, franchise, permission and authority to lay, install, maintain, and
operate over, across and along all of the rights-of-way of the City all mains,
services, pipes, conduits and appliances necessary or convenient for
transmitting, transporting, distributing and supplying natural gas for all
purposes for which it may be used, and to do all other things necessary and
proper in providing natural gas service to the inhabitants of the City and in
carrying on such business.
(B) Nothing in this franchise ordinance, and
the grant hereof, shall be interpreted as granting to the Company the authority
to provide non-gas regulated utility services, including electric, telephone,
and cable services, without a separate grant of a franchise from the City.
Section 3. Governing Rules and Regulations.
This Ordinance is granted subject to all conditions, limitations and immunities
now provided for, or as hereafter amended, and applicable to the operations of
a public utility, by the laws of the State of
Section 4. Use of Right-of-Way. In the
use of the right-of-way under this Ordinance, the Company shall be subject to
all rules, regulations, policies, resolutions and ordinances now or hereafter
adopted or promulgated by the City in the reasonable exercise of its police
power and is subject to all applicable laws, orders, rules and regulations
adopted by the governmental bodies now or hereafter having jurisdiction. In
addition, the Company shall be subject to all rules, regulations, policies,
resolutions and ordinances now or hereafter adopted or promulgated by the City
relating to permits, sidewalk and pavement cuts, utility location, construction
coordination, beautification, tree care, and other requirements on the use of
the right-of-way and shall comply with the following:
(A) The
Company's use of right-of-way shall in all matters be subordinate to the City's
use of the right-of-way for any public purposes. The Company shall coordinate
the placement of its facilities in a manner that minimizes adverse impact on
public improvements, as reasonably determined by the City. Where placement is not otherwise regulated,
the facilities shall be placed with adequate clearance from such public
improvements so as not to impact or be impacted by such public improvement.
(B) Upon receipt and acceptance of a valid
application for service, the Company shall, subject to its own economic
feasibility criteria, make reasonable extensions of its distribution facilities
to serve customers located within the current or future corporate limits of
City. No obligation shall extend to, or be binding upon, the Company to extend
its facilities if the Company is, for any reason, unable to obtain and deliver
an adequate energy supply.
(C) All earth, materials, sidewalks, paving,
crossings, utilities, public improvements or improvements of any kind injured,
damaged or removed by the Company in its activities under this Ordinance shall
be fully repaired or replaced within a reasonable time by the Company at its
sole expense and to the reasonable satisfaction of the City and the Company.
(D) The Company shall keep and maintain
accurate records and as-built drawings depicting the accurate location of all
facilities constructed, reconstructed, or relocated in the right-of-way after
the date hereof and provide the above information to the City upon request.
Where such information is available electronically, upon request from the City,
Company agrees to provide such information in an electronic format. City agrees
to use information obtained pursuant to this subsection only to locate utility
facilities in connection with municipal projects and further agrees not to
disclose such information to anyone other than City employees requiring such
information to locate utility facilities in connection with municipal projects,
except as required by law. Company and the City agree that such information is
confidential and proprietary and agree that such information shall remain the
sole property of the Company and agree that pursuant to K.S.A. 45-221 (12),
(18), as amended, such information does not constitute public records subject
to K.S.A. 45-218, as amended. In the event that City is required by law to
disclose such information, City shall provide the Company seven (7) days
advance notice of its intended disclosure of such information and shall take
such action as may be reasonably required to cooperate with the Company to
safeguard such information.
The Company agrees to
indemnify and hold the City harmless from any and all penalties or costs,
including attorney's fees, arising from the actions of the Company, or of the
City at the written request of the Company, in seeking to safeguard the
confidentiality of information provided by the Company to the City under this
section.
In the event such
information is required by force of law to be publicly disclosed, the Company
shall have no further obligation under this section to provide the City with
such information
(E) Except
in cases of an emergency, a minimum of fourteen (14) days prior to
construction, reconstruction or relocation of any facilities in the
right-of-way, the Company shall submit to the City Engineer, or her or his
designee, for approval, plans and specifications of the proposed installation.
Such approval shall not be unreasonably withheld, delayed or conditioned. City review shall only concern matters
related to the interests of the City as set forth in this Ordinance.
(F) The
Company shall cooperate promptly and fully with the City and take all
reasonable measures necessary to provide accurate and complete information
regarding the nature and locations of its facilities located within
right-of-way when requested by the City or its authorized agents for a public
project. Such location and identification shall be at the sole expense of the
Company, without expense to the City, its employees, agents, or authorized
contractors. The Company shall designate an agent to provide the City with
timely information when required by this subsection.
(G) As
reasonably necessary, the Company shall remove and relocate or adjust any
facilities located in the right-of-way for a public project within a reasonable
time. Such relocation or adjustment shall be performed by the Company at its
sole expense, without expense to the City, its employees, agents, or authorized
contractors and shall be specifically subject to rules and regulations of the
City not inconsistent with this Ordinance pertaining to such. The City shall
consider reasonable alternatives in designing its public works projects so as
not arbitrarily to cause the Company unreasonable additional expense in
exercising its authority under this section.
(H) It
shall be the sole responsibility of the Company to take adequate measures to
protect and defend its facilities in the right-of-way from harm and damage. If
the Company fails to accurately or timely locate facilities when requested, the
Company has no claim for costs or damages against the City and its authorized
contractors or any other party authorized to be in the right-of-way, except to
the extent such harm or damage is caused by such party's negligent or
intentional conduct. City and its authorized contractors agree to take
reasonable precautionary measures, including, but not limited to, calling for
utility locations and observing marker posts, when working near Company facilities.
(I) Except
in the event of an emergency, the Company shall notify the City not less than
ten (10) days in advance of any construction, reconstruction, repair or
relocation of facilities which would require any street closure which reduces
traffic flow to less than two lanes of moving traffic. The City shall follow
its policies in the grant or denial of such authority, which shall not be
unreasonably delayed. Except in the event of an emergency, no such closure
shall take place without such notice and prior authorization from the City.
In addition, all work
performed in the traveled way or which in any way Impacts vehicular or
pedestrian traffic shall be properly signed, barricaded, and otherwise
protected. For all work within the right-of-way, the Company shall erect and
maintain signs and other devices as required by City ordinances, regulations
and rules.
(J) All technical standards governing
construction, reconstruction, installation, operation, testing, use,
maintenance, and dismantling of the facilities in the right-of-way shall be in
accordance with applicable present and future federal, state and City law and
regulations.
Section 5. Street Tree Ordinance. The
Company shall comply with the provisions of the Street Tree Ordinance (Chapter
18, Article 1, of the Code of the City of Lawrence, Kansas) and amendments
thereto, in the care, pruning, trimming, and removing of trees located in or on
the City right-of-way.
Section 6. Location of Underground
Equipment and Facilities. The Company equipment, other than equipment of
Company which is, within the natural gas industry, customarily placed above
ground or required by law to be located above ground, shall be placed
underground as required by City ordinances, including Chapter 5, Article 4A of
the Code of the City of Lawrence, and amendments thereto. Where underground
construction is made, the equipment and any necessary trenching shall be
installed and maintained or provided by the Company in accordance with the
ordinances of the City without expense to the City.
Section 7. Franchise Fee.
(A) In consideration for the grant of this
franchise, the Company agrees to collect from its customers, but not from the
City, located within the corporate limits of the City, and pay to the City, and
the City agrees to accept as adequate compensation and consideration for the
franchise fee as defined herein an amount equal to five percent (5%) of the
gross receipts derived from the sale, distribution or transportation of natural
gas, including customer service charges.
(B) If at any time during the duration
of this agreement, the Company shall provide gas transportation service to ten
(10) or more locations within the City, the Company and the City shall mutually
agree to amend this ordinance within ninety (90) days of notification of such
situation, to provide that the fee structure in (A) above shall be on a
volumetric basis.
(C) The
Company shall list the local fee collected from consumers within the City as a
separate item on bills for utility service issued to consumers. If at any time
the Kansas Corporation Commission, or other authority having proper
jurisdiction, prohibits such recovery, then the City and Company shall
renegotiate this ordinance.
(D) The franchise fee shall be paid monthly,
by ACH or electronic transfer to the City, or other method approved by the City
and Company. Concurrent with submission of the monthly payment, the Company
shall also submit a report that shall detail revenues from specific
sources. The Company shall pay the
applicable fee to the City within thirty (30) days of the last day of the
applicable calendar quarter for which a fee payment is due and owing. Initial
and final payments shall be prorated for the portions of the periods at the
beginning and end of the term of this Ordinance. Payments received after the
due date shall be subject to a late payment charge of one and one-half percent
(1 ˝ %) per month. Payments due and
owing as the result of an audit of franchise fee payments shall be subject to a
late payment charge of one and one-half percent (1 ˝ %) per month; provided
such late payment charges shall 1) begin to accrue forty-five (45) days after
notice is mailed to the Company; and 2) the late payment charge shall only
apply to audit generated payments agreed to by the City and the Company.
(E) The franchise fee collected and paid by
the Company shall be in lieu of, and the Company shall be exempt from, all
other licenses, charges, excise or right-of-way permit fees or taxes or
impositions (other than the usual general or special ad valorem taxes) which
might be imposed by the City for the privilege of operating a natural gas
system within the City.
(F) The Company agrees to use due diligence
in ascertaining the boundaries of the City, including the annexation of
property into the City. The City shall
provide copies of annexation ordinances to the Company on a timely basis. The Company shall obtain a copy of the annual
boundary resolution adopted by the City, and the Company shall compare the City
boundaries with existing and planned Company services and customers to ensure
appropriate franchise fee collection from customers within the corporate limits
of the City.
Section 8. The City shall have access to and
the right to examine during normal business hours, those of the Company’s
books, receipts, files, records and documents that are necessary to verify the
correctness of payments due hereunder.
If it is determined that a mistake was made in the payment of any
franchise fee required hereunder, such mistake shall be corrected promptly upon
discovery, such that any under-payment by the Company shall be paid within
thirty (30) days of the recalculation and any over-payment by the Company shall
be discounted from the next payment(s) due.
Section 9. Sharing of Space. The City
encourages the conservation of right-of-way by the sharing of space by all
utilities. To the extent required by
federal or state law, the Company shall permit any other franchised entity by
appropriate contract or agreement negotiated by the parties to use any and all
facilities constructed or erected by the Company. All said agreements and installations shall
be subject to all existing and future ordinances and regulations of the City. Company agrees that it will not grant any
entity rights to occupy the rights-of-way without providing notice to the City.
Section 10. Indemnification and
Hold-Harmless. The Company, its successors and assigns, shall at all times
save and hold harmless the City of Lawrence, Kansas, from all liability, costs,
damages, and expenses of any kind, for the payment of which said City may
become liable to any person, firm, or corporation by reason of any claim or
damages to the extent caused by the failure of the Company, its employees,
agents, or servants to exercise due care and diligence in the construction,
installation, maintenance, and operation of gas service facilities within the
City or outside the City.
Section 11. Assignment of Franchise.
Pursuant to the written permission of the City, which shall not be unreasonably
withheld, the Company shall have the right to assign this franchise, and the
rights and privileges herein granted, to any person, firm or corporation, and
any such assignee, by accepting such assignment, shall be bound by the terms
and provisions hereof. If the Company
should seek approval to assign this franchise, the Company shall notify the
City in writing. All such assignments
shall be in writing and authenticated copies thereof shall be filed with the
City Clerk. This franchise shall be assignable
only in accordance with the laws of the State of
Section 12. Conditions of Franchise.
This contract, franchise, ordinance, grant and privilege is granted and
accepted under and subject to all applicable laws and under and subject to all
of the orders, rules and regulations now or hereafter adopted by governmental
bodies now or hereafter having jurisdiction.
Each and every provision hereof shall be subject to Acts of God, fires,
strikes, riots, floods, war and other causes beyond the Company's control. This franchise shall not be exclusive. It shall not be a breach or default under
this franchise if either party fails to perform its obligations hereunder due
to Force Majeure. Force Majeure shall
include, but not be limited to, the following: 1) physical events such as acts
of God, landslides, lightning, earthquakes, fires, freezing, storms, floods,
washouts, explosions, breakage or accident or necessity of repairs to machinery,
equipment or distribution or transmission lines; 2) acts of others such as
strikes, work-force stoppages, riots, sabotage, insurrections or wars; 3)
governmental actions such as necessity for compliance with any court order,
law, statute, ordinance, executive order, or regulation promulgated by a
governmental authority having jurisdiction; and any other causes, whether of
the kind herein enumerated or otherwise not reasonably within the control of
the affected party to prevent or overcome.
Each party shall make reasonable efforts to avoid Force Majeure and to
resolve such event as promptly as reasonably possible once it occurs in order
to resume performance provided, however, that this provision shall not obligate
a party to settle any labor strike.
Section 13. Notice to Parties. For the
purpose of this Agreement, notice to the City will be to: City Manager,
Section 14. Length of Franchise Agreement.
The rights and privileges granted by this Ordinance shall remain in effect for
a period of five (5) years from the effective date thereof; provided that the
term shall continue for one subsequent term of five (5) years upon the
anniversary of the effective date, unless either the City or the Company in
writing at least ninety (90) days before the expiration of the initial and
subsequent terms notifies the other party that it does not desire to renew the
franchise under the current terms and conditions. After such notice is
provided, the franchise ordinance and franchise agreement shall expire upon
said anniversary. After the notification of pending expiration, the City and
the Company shall in good faith seek to draft amendments and revisions to the
terms and conditions of a franchise agreement which shall be mutually
satisfactory.
Section 15. Rights and Duties of Grantee
upon Expiration of Ordinance. Upon expiration, termination, or forfeiture
of this Ordinance, whether by lapse of time or by agreement between the Company
and the City, the Company shall have the right to remove from right-of-way and
public property all of its facilities used in its business within reasonable
time after such expiration or forfeiture, but in such event, it shall be the
duty of the Company immediately upon such removal, to restore the right-of-way
from which said facilities are removed to as good condition as the same were
before said removal was effected without cost to the City.
Section 16. Termination or Forfeiture of
Franchise.
(A) In case of failure on the part of the
Company, its successors and assigns, to comply with any of the provisions of
this ordinance, or if the Company, its successors and assigns, should do or
cause to be done any act or thing prohibited by or in violation of the terms of
this ordinance, the Company, its successors and assigns, shall forfeit all
rights and privileges granted by this ordinance and all rights hereunder shall
cease, terminate and become null and void, provided that said forfeiture shall
not take effect until the City of Lawrence shall carry out the following
proceedings.
(B) Before the City of Lawrence proceeds to
forfeit said franchise, as in this section prescribed, it shall first serve a
written notice as provided by the Notice provisions of this ordinance, setting
forth in detail the conditions of neglect, default or failure complained of,
and the Company shall have ninety (90) days after the mailing of such notice in
which to comply with the conditions of this franchise. If at the end of such
ninety (90) day period the City of Lawrence deems that the conditions of such
franchise have not been complied with by the Company and that such franchise is
subject to cancellation by reason thereof, the City in order to terminate such
franchise shall enact an ordinance setting out the grounds upon which said
franchise is to be canceled and terminated.
If within thirty (30) days after the effective date of said ordinance
the Company shall not have instituted an action in the District Court of
Douglas County, Kansas to determine whether or not the Company has violated the
terms of this franchise and that the franchise is subject to cancellation by
reason thereof, such franchise shall be canceled and terminated at the end of
such thirty-day period.
(C) If within such thirty (30) day period the
Company does institute an action, as above provided, to determine whether or
not the Company has violated the terms of this franchise and that the franchise
is subject to cancellation by reason thereof and prosecutes such action to
final judgment with due diligence, then, in that event in case the court finds
that the franchise is subject to cancellation by reason of the violation of its
terms, this franchise shall terminate thirty (30) days after such final
judgment is rendered and available appeals exhausted.
Section 17. Effectiveness. This
ordinance shall become effective and be in force and shall be a binding
contract between the Company and the City of Lawrence, Kansas, their successors
and assigns, from and after the following: 1) the ordinance has been approved
by the Company in writing pursuant to Section 20, 2) the ordinance has been
read at two regular meetings of the governing body, and 3) the ordinance has
been published in the official city paper. The Company shall pay for the
required publication of this ordinance.
Section 18. Severability. If any
provision, section or subsection of this ordinance or the application thereof
to any person or circumstances is held invalid, such invalidity shall not
affect other provisions, sections or subsections or applications of this
ordinance which can be given effect without the invalid provision, section or
subsection or application, and to this end the provisions, sections, and
subsections of this ordinance are declared to be severable.
Section 19. Non Waiver. Any waiver of
any obligation or default under this franchise shall not be construed as a
waiver of any future defaults, whether of like or different character.
Section 20. Company Acceptance. The
Company shall, within sixty (60) days, after the final publication of this
ordinance, file with the City Clerk its written acceptance of all the terms,
conditions, and provisions of this ordinance, and in case its failure so to do,
this Ordinance shall be null and void. The acceptance of this ordinance, shall
be in writing, and shall be duly acknowledged before some officer authorized by
law to administer oaths; and when so accepted the ordinance and acceptance
shall constitute a contract between the City and the Company subject to the
provisions of the laws of the State of Kansas.
SECTION 21. THIS ORDINANCE
SHALL BE EFFECTIVE UPON ITS PASSAGE AND PUBLICATION IN THE OFFICIAL CITY
NEWSPAPER.
PASSED by the Governing Body of the City of Lawrence, Kansas
the ___ day of ______________, 200_.
___________________________
,
Mayor
ATTEST:
_______________________________
Frank S. Reeb, City Clerk
Approved as to form and legality:
_______________________________
Toni R. Wheeler,
Director of Legal Services