1999-024AN ORDINANCE WHEREBY THE CITY OF DENTON, TEXAS, GRANTS TO COSERV
GAS A NON-EXCLUSIVE FRANCHISE TO FURNISH, TRANSPORT, SELL AND
DISTRIBUTE GAS TO CUSTOMERS IN DENTON, TEXAS, FOR A PERIOD OF TEN (10)
YEARS FOR A FRANCHISE FEE IN THE AMOUNT OF 3% OF REVENUES COLLECTED
AND PROVIDING DEFINITIONS, PROVIDING A PAYMENT SCHEDULE AND
STATEMENT OF REVENUES, PROVIDING FRANCHISE FEE NOT IN LIEU OF OTHER
FEES AND CONTRACT OBLIGATIONS, PROVIDING DEPENDABLE GAS SUPPLY AT
LOWEST REASONABLE COSTS, PROVIDING OBLIGATIONS REGARDING COMPANY
FACILITIES, LONG-RANGE PLANNING FOR CAPITAL IMPROVEMENT PROJECTS,
CITY REVIEW OF CONSTRUCTION AND DESIGN, REQUESTS BY CITY FOR
RELOCATION OF COMPANY FACILITIES AND WORK BY OTHERS, PROVIDING FOR
CHANGING BOUNDARIES OF CITY AND ABANDONMENT, PROVIDING CITY NOT
REQUIRED TO ADVANCE FUNDS, PROVIDING FOR TECHNOLOGICAL
IMPROVEMENTS, PROVIDING FOR COMPLIANCE WITH CITY RULES AND
REGULATIONS, RAILROAD COMMISSION SPECIFICATIONS AND REGULATIONS,
AND ENVIRONMENTAL LAWS, PROVIDING OFFICE LOCATION, REPORTS ON
COMPANY OPERATIONS AND ACTIVITIES AND DETAILED BILLS, PROVIDING CITY
HELD HARMLESS AND INDEMNIFICATION, NOTICE TO COMPANY, INSURANCE
AND BONDS, PROVIDING PAYMENT OF EXPENSES INCURRED BY CITY IN
RELATION TO ORDINANCE, PROVIDING RIGHT OF FIRST PURCHASE, RIGHT TO
PURCHASE OR CONDEMN, LIMITATIONS OF COMPANY REMOVAL OF FACILITIES,
TRANSPORTATION AND PROCUREMENT OF GAS BY CITY AND CURTAILMENT,
PROVIDING CIVIL PENALTIES, FORECLOSURE, FORFEITURE AND TERMINATION
AND OTHER LEGAL REMEDIES, PROVIDING NO WAIVER, RIGHTS OF SUCCESSORS
AND ASSIGNS, REPRESENTATIVES AND NOTICES, SEVERABILITY, ENTIRE
AGREEMENT, COMPANY APPROVAL, ANNEXATION TO THE CITY AND THIRD
PARTIES, PROVIDING COMPLIANCE WITH CITY CHARTER AND APPLICATION OF
TERMS ,IN COMPETING FRANCHISES, AND PROVIDING AN EFFECTIVE DATE, NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
TABLE OF CONTENTS
1 DEFINITIONS
2 GRANT OF FRANCHISE
3 TERM OF FRANCHISE
4 FRANCHISE FEE
5 PAYMENT SCHEDULE
6 STATEMENT OF REVENUES
7 FRANCHISE FEE NOT IN LIEU OF OTHER FEES
8 CONTRACT OBLIGATION
9 DEPENDABLE GAS SUPPLY AT LOWEST REASONABLE COSTS
10 OBLIGATIONS REGARDING COMPANY FACILITIES
LONG RANGE PLANNING FOR CAPITAL IMPROVEMENT PROJECTS
12 CITY REVIEW OF CONSTRUCTION AND DESlGN
13 REQUESTS BY CITY FOR RELOCATION OF COMPANY FACILITIES
14 WORK BY OTHERS, CONSTRUCTION BY ABUTTING OWNERS
5 CHANGING BOUNDARIES OF CITY AND ABANDONMENT
16 CITY NOT REQUIRED TO ADVANCE FUNDS
7 TECHNOLOGICAL IMPROVEMENTS
18 CITY RULES AND REGULATIONS
19 COMPLIANCE WITH CITY AND RAILROAD COMMISSION QUALITY SPECIFICATIONS
AND REGULATIONS
20 COMPLIANCE WITH ENVIRONMENTAL LAWS
I OFFICE LOCATION
22 REPORTS ON COMPANY OPERATIONS AND ACTIVITIES
23 DETAILED BILLS
24 CITY HELD HARMLESS
25 NOTICE TO COMPANY
26 INSURANCE
27 BONDS
28 PAYMENT OF EXPENSES INCURRED BY CITY IN RELATION TO ORDINANCE
29 RlGHT TO FIRST PURCHASE
30 CITY'S RIGHT TO PURCHASE OF CONDEMN
31 LIMITATIONS OF COMPANY REMOVAL OF FACILITIES
32 TRANSPORTATION AND PROCUREMENT OF GAS BY C1TY
33 CURTAILMENT
34 PENALTIES
35 FORECLOSURE
36 FORFEITURE AND TERMINATION
37 OTHER LEGAL REMEDIES
38 NO WAIVER
39 SUCCESSORS AND ASSIGNS
40 REPRESENTATIVES AND NOTICES
41 SEVERABILITY
42 ENTIRE AGREEMENT
43 COMPANY APPROVAL
44 ANNEXATION TO THE CITY
45 THIRD PARTIES
46 COMPLIANCE WITH CITY CHARTER
47 APPLICATION OF TERMS IN COMPETING FRANCHISE
48 EFFECTIVE DATE
DEFINITIONS For the purpose of this Franchise, the following words and phrases shall have
meaning given m th~s section When not Inconsistent w~th the context, words used ~n the present tense
include future tense, words ~n the plural number ~nelude the s~ngular number, and words m the s~ngular
number include the plural number The word "shall" ~s mandatory and "may" ~s permissive Words not
defined m th~s section shall be g~ven their common and ordinary meamng
"Affihate" means any enUty controlhng, controlled by or under common control wtth the entity m
question
"Ctty" means the mumctpal corporatton designated as the City of Denton and includes the territory as
currently ts or may tn the future be tncluded wtthm the boundaries of the City of Denton
"Ctty Council" means the legtslattve body of the Ctty
"C~ty Manager" means the Ctty Manager of the Ctty of Denton or hts designee
"Company" means CoServ Gas, but does not include tts Affiliates, subsidiaries or any other enttty m
which tt has an ownershtp tnterest
"Facthttes" means all property both real and personal of the Company which are reasonably necessary to
promde Gas tnto, wtthm and through the City, mcludtng without hmltatton, rights of way, transmission
and d~strlbutton ptpes, matns, Gas compressors and meters
"Frenchtse" means the rights and obhgattons of the City and the Company set forth tn this Frenchtse
ordinance as the same may be amended from ttme to t~me and includes those rights and duties prowded
under the laws of Texas and of the Umted States
"Gas" means such gaseous fuels as natural, artffictal, synthetm, liquefied natural, hquefied petroleum,
manufactured, or any m~xture thereof
"Pubhc Easement" means easements permitted by the City for the use of Company
"Pubhc Streets" tncludes, but ts not hmlted to, streets, methans, boulevards, roads, lanes, alleys, vtaducts,
bridges and pubhc rights of way that are deeded, dethcated or otherwise avadable for Company use
within the Ctty
"Railroad Commtsston" means the Radroad Commlsston of the State of Texas or other authority
succeedtng to the regulatory powers of the Railroad Commtsslon
"Restdents" means all persons, businesses, mdustry, governmental agenmes, and any other entity
whatsoever, located, m whole or part, wlthm the Ctty that are or may be served by the Company
hereunder
"Revenue" means those amounts of money and other benefits which the Company receives from the
A All Revenues recetved by Company from the sale of Gas, lncluthng compressed Gas, within the
Ctty to all customers wtthm the City
B All Revenues received by Company from the transportation of Gas through the ptpehne system of
Company wtth the Ctty to commermal industrial customers wtthm the City, and
C The value of Gas transported by Company for Transport Customers through the ptpehne system
of Company wtthm the Ctty
2 GRANT OF FRANCHISE
(A) Pursuant to the Constitution of the State of Texas, State Statutes and the City's home rule charter,
the C~ty hereby grants to the Company, for the period specified m and subject to the conditions, terms and
provisions contained m this Franchise, a non-exclusive r~ght to furnish, transport, sell and thstnbute Gas
to the C~ty and its Residents Subject to the condmons, terms and provisions contained m this Franchise,
the City also hereby grants to the Company a non-exclusive right to aeqmre, construct, install, locate,
maintain, operate and extend Facilities into, w~thin and through the C~ty and a non-exclusive right to
make use of the public streets and Public Easements as may be necessary to carry out the terms of th~s
Franchise These rights shall extend to all areas of the City as ~t ~s constituted from Ume to time
(B) This Franchise does not grant to the Company the right, privilege or authority to engage ~n any
other business within the C~ty other than the provision of Gas sales, transportation, distnbuuon and the
furmshmg of Gas to the City and its Residents
(C) The right to use and occupy the public streets and Public Easements as set forth herein ~s not an
exclusive Franchise, and the City reserves the right to make or grant a s~mdar use of pubhc streets and
Public Easements for the C~ty and to any other person, firm, or corporation
3 TERM OF FRANCHISE
(A) Unless terminated earher as provided herein, the term of this Franchise shall be for ten (10) years,
beginning on the effective date of this Ordinance
4 FRANCHISE FEE
(A) As further consideration for the grant of th~s Franchise, which prowdes for the use by the
Company of pubhc streets and easements, which are valuable pubhc properties acquired and maintained
by the City at great expense to its Residents, and m recogmt~on that the grant to the Company of the use
of those public streets and Pubh¢ Easements is a valuable right without which the Company would be
reqmred if permitted by the C~ty to invest substantial t~me and capital in right-of-way costs and
acqms~tions, the Company shall pay to the City a Franchise fee m the amount three percent (3%) of the
Revenue, accruing to the Company This fee shall change to the fee assessed Lone Star Gas m its new
franchise, The Company shall report to the C~ty within sixty days of the execution of a subsequent
Franchise of any change of Franchise m another municipality m the State of Texas Should such
Franchise or change in Franchise provide for services or consideration not prowded hereunder, Company
shall offer to prowde such services and/or consideration to the C~ty and ~ts Residents upon the same or
similar terms, and provide the City a copy of such Franchise or change
(B) The value of Gas transported by Company for Transport Customers shall be determined as set
forth m this paragraph In the absence of documentary ewdence to the contrary prowded by Company to
C~ty, the value of Gas so transported shall be presumed to be equal to the total volume of Gas transported
for such Transport Customer times the rates charged for Gas as indicated on Schedule N of Company's
tariff, as such tariff rates may be amended from time to time by the Texas Railroad Commission, or its
successor agency If Company submits documents to the C~ty to indicate the actual value of Gas
transported by Company, the Company may remove therefrom any mformat~on that would d~sclose e~ther
the ~dentity of the customer or other information deemed confidential by Company, so long as such
removal does not prevent the City from determining the monetary value of the Gas transported Company
agrees to give the City, upon request, access to the confidential mformaUon so removed m order for the
City to verify the accuracy of the information provided to the C~ty under the provisions of this paragraph
Failure or ~nabflity of Company to collect the three percent (3%) Franchise fee from its Transport
Customers does not relieve it of its responsibility and obligation to remit payment m the amount of three
percent (3 %) of the value of such Gas to the City
5 PAYMENT SCHEDULE
(A) For the Franchise fee owed on Revenues accruing to the Company after the effective date of this
Franchise from the sale and transportation of Gas, payment shall be made m quarterly installments not
more than ten days following the close of the quarter for which payment IS to be made Imtial and final
payments shall be prorated for the portions of the months at the beginning and end of the term of this
Franchise All payments shall be made to the City and accompanied by supporting documentation
satisfactory to the City
(B) In the event an error by the Company results m an overpayment of the Franchise fee to the City
and said overpayment is m excess of $5,000 00, credit for the overpayment shall be spread over the same
period the error was undmcovered if the overpaymant is $5,000 00 or less, credit shall be taken against
the next payment In the event an error by the Company results in an under payment of the Franchise fees
to the City and said underpayment Is m excess of $5,000 00, Company shall repay the difference between
the underpayment and the correct payment over the same period the error was undiscovered If the
underpayment Is $5,000 00 or less, company shall repay the difference in the next payment
(C) No charges to the City by Company for any sales or transportation of gas or other services shall
exceed the lowest charge for similar services provided by the Company to any other similarity situated
customer or consumer of the Company
6 STATEMENT OF REVENUES
(A) Company shall file annually with the City, no later than April 15, the Company's annual report to
the Railroad Commission of Texas, or its successor, if such report specifically allocates Revenues arising
within City's corporate hmits Should the Railroad Commission or its successor fall to require this
information, Company shall file annually with the City, no later than four (4) months after the end of the
Company's fiscal year, an audited annual statement of Revenues attributable to the operations of the
Company's Facilities within the City m conformance with the NARUC system of accounts by a certified
public accountant
(B) Any transactions which have the effect of circumventing payment of required Franchise fees
and/or evasion of payment of Franchise fees by non-collection or non-reporting of gross receipts,
bartering, or any other means which evade the actual collection of Revenues or fees for business pursued
by Company are prohibited
(C) Company shall provide the City with access at reasonable times and for reasonable purposes, to
examine, audit, review and/or obtain copies of the papers, books, accounts, documents, maps, plans and
other records of Company pertaining to this Franchise ordinance Company shall fully cooperate in
making available its records and otherwise assisting in these actlv~ties
(D) The City may, at any time, make inquiries pertaining to Company's operation of its Facilities
within the City Company shall respond to such inquires on a timely basis
7 FRANCHISE FEE NOT IN LIEU OF OTHER FEES
(A) Payment of the fees and other conslderatton due hereunder by the Company is not accepted by the
C~ty m heu of any occupatmn tax, hcense tax or similar tax on the privilege of doing business ~n the C~ty
or reimbursement of regulatory cost Payment of the fees and other consideration due hereunder does not
exempt the Company from payment of taxes that are umform and generally appbcable to other persons
conducting business within the City, such as property, sales and use taxes
(B) Payment of the fees and other considerations due hereunder shall not m any way hm~t or mh~b~t
any of the privileges of the C~ty whether under th~s Franchise ordinance or otherwise
8 CONTRACT OBLIGATION
This Franchise constitutes a vahd and b~ndlng contract between the Company and the C~ty In the event
that the fees and other consideration specffied m th~s Franchise is declared illegal, unconstitutional or vmd
for any reason by any court or other proper authority, the Company shall be contractually bound to pay
the C~ty, on the same schedule as provided here~n for the fees and other consideration, an aggregate
amount equal to the amount which would have been prod as fees and other consideration In the
alternative, the City shall have the right to ~mpose on the Company and the Company shall pay
occupation and hcense fees and permit charges reasonably eqmvalent on an annual basis to the fees and
other consideration payable hereunder
9 DEPENDABLE GAS SUPPLY AT LOWEST REASONABLE COSTS
(A) The Company shall at all times take reasonable and necessary steps to assure a dependable supply
of Gas to the City and its Residents at the lowest reasonable cost consistent w~th long term rehable
supphes Should Gas be made available to the Company from whatever source, including any agency or
~nstrumentahty of the State, at less total cost that the total cost whmh would be ~ncurred by the Company
to supply such Gas from its own supphes, the Company agrees to purchase such lower-cost Gas and to
pass on to the Residents all sarongs resulting from the purchase Should Gas be offered to the Company
for a prtce less that being provided to the C~ty and as Residents and Company not accept such offer,
Company shall not~fy City of such offer and the reason(s) that such offer was not accepted
(B) If the supply of Gas to the City or its Residents should be interrupted, the Company shall
~mmedmtely take all necessary and reasonable actions to restore such supply at the earhest possible t~me
(C) The Company shall prowde to the City a telephone number which ~s not available to the pubhc
whereby the C~ty will be able to obtam status reports from the Company on a twenty-four hour bas~s
concerning ~nterrupt~ons of the supply of Gas m any port,on of the C~ty
(D) The Company shall ~nstall, repmr, mmntmn and replace ~ts Famht~es ~n a good and workmanhke
manner The Company's Facflittes shall be of reasonable quahty, redundancy and durabthty to prowde
umnterrupted and efficient Gas service to the C~ty and ~ts Residents
10 OBLIGATIONS REGARDING COMPANY FACILITIES
(A) All work by the Company shall be done
1 In a good workmanhke manner,
2 Ina timely and expeditious manner,
3 In a manner which minimizes tnconvemence to the Restdents,
4 In a cost-effective manner, and
6
5 In accordance w~th all apphcable codes, rules and regulations of the City and the Railroad
Commission
(B) Company Facd~tles shall not ~nterfere w~th power, telephone, cable or water Facthtles, sanitary or
storm sewer Facilities or other municipal or pubh¢ use of pubhe streets and Pubhc Easements Company
Facdmes shall be installed and mmnta~ned so as to minimize ~nterference w~th other property, trees,
~mprovements and natural features
(C) The Company shall promptly repair all damage caused by Company actlwtles or Facdlt~es If
such damage poses threat to health, safety or welfare of the pubhc or Residents, the C~ty may cause
repairs to be made at the Company's expense unless the Company makes such repmrs promptly upon the
City's request
(D) The installation, repair, mamtanance, and replacement of any Facthttes m public streets and
pubhe easements by the Company shall be subject to ~nspectlon and approval by the City Such
inspection ~and approval may melude, but not be hm~ted to the following matters location of Faeflmes in
public streets and Pubhc Easements, cutting and trimming of trees and shrubs, and d~sturbances of
pavements, s~dewalks and surfaces of pubhc streets and Pubhe Easements The Company agrees to
cooperate fully w~th the Oty ~n conducting the inspection The Company shall promptly perform
reasonable remedial action reqmred by the C~ty pursuant to such an inspection
(E) The Company shall reqmre its contractors working tn pubhc streets and Pubhc Easements to hold
all necessary contracting hcenses and permits required by the C~ty
(F) The Company shall reimburse the C~ty for the costs of upgrading the Gas d~stnbnt~on system or
facility of any Ctty budding or facd~ty that uses Gas where such upgrading is caused or occasioned by the
Company's decision to increase the dehverabd~ty and/or pressure of delivered Gas
11 LONG RANGE PLANNING FOR CAPITAL IMPROVEMENT PROJECTS
(A) The Company shall keep the C~ty informed as to ex~stmg and planned system capacity,
construction, maintenance and other activities of the Company within the C~ty Regular planning and
coordination meetings will be held Representatives of the Company and the C~ty shall meet at least
annually to d~seuss long term planning for capital ~mprovement projects contemplated by each The
Companylshall ~nclude w~thm ~ts capital Improvement projects the plans of the C~ty relating t° same The
Company shall submit reports of long-term planning for capital improvement projects Descriptions of
reqmred street cuts, excavation, digging and related construction act~wtles, ~nclud~ng w~thout hm~tatton,
cop~es of work plans and drawings should be submitted to the C~ty w~thm thirty days after ~ssuance of the
report Except for emergencies, the Company shall coordinate all ~nstallat~ons with the Oty's capital
improvement programs Company shall not proceed w~th constructmn until the plans and drawings have
been app~'oved by the City Within 60 days after the C~ty Couned adopts the City budget for the
following year, the C~ty shall forward, m writing, a hst of the ~mprovement projects (including street
w~demng iprojects, street overlay projects, bridge ~mprovement projects, new street construction projects,
drmnage ~mprovement projects, and park ~mprovement projects) which are included in the adopted
budget W~th~n 60 days of receipt of the City's hst of ~mprovement projects the Company shall make
available ~mformat~on regarding each City project w~thm the pubhc streets and Pubhc Easements that
ldent~fies, and generally describes the ex~stmg and anticipated Company Facdmes that are or may be
w~thm orI cross through the project boundaries Smd mformat~on shall (1) tdent~fy the s~ze, type and
general 16cat,on of any ex~st~ng Company facility (2) address the current condition of any ex~st~ng
Compan~ facd~ty (e g capacity, mtegnty, expected service hfe, ete) (3) ~dentlfy any scheduled or
7
anticipated upgrades, repairs or replacemems of any existing Company facility (4) identify generally
what activities will be required to be performed by the Company in order to accommodate the City
project and the necessary time frame for completion of such activities and (5) provide any other
reasonable information that may be pertinent
(B) The City and the Company shall designate to each other their respective officials to serve as
their representative for coordination of this exchange of information and planning on any such project
ConstructiOn, installation, maintenance, alteration or replacement of the Company's Facilities resulting
from the City's lmprovemem projects shall be performed at the Company's expense
12 CITY REVIEW OF CONSTRUCTION AND DESIGN
(A) Except for emergencies, the Company shall advise the C~ty at least thirty (30) days prior to any
major construction The Company shall provide the initial work plans and drawings for the proposed
construction In addition, the Company shall assess and report on the impact of its proposed construction
on the City environment Such plans and reports may be reviewed by the City to ensure that, among other
items, (1) aesthetic and good planning principles have been given due consideration, (2) adverse impact
on the environment has been minimized, and (3) that all applicable laws including budding and zoning
codes and air and water pollution regulations are complied with Changes requested by the City shall be
incorporated into the Company's construction
(B) Upon request of the City, Company shall remove and abate any portion of the Facilities that is
dangerous to life or property, and in case Company, after notice, fails or refuses to act, the City may
remove orlabate the same, at the sole cost and expense of Company, all without compensation or liability
for damages to the Company
(C) Company shall promptly restore the public streets, Public Easemems and private property to their
condition prior to Company's construction, maintenance or excavation, to the satisfaction of the City
consistem with their existing City codes and specifications
(D) Company shall excavate only for the construction, installation, expansion, repair, removal, and
maintenance of all or a portion of the Facilities
(E) Except in an emergency, Company shall not excavate m any public street or Public Easement
without first securing permission of the City and all applicable permits at least 24 hours prior to initiation
of excavation Such work shall be performed to minimize interference with the use of Public Easements
and public streets The City shall be notified as soon as practicable regarding work performed under
emergency conditions
(F) Within thirty (30) days of completion of the Company's construction of Facilities Company shall
supply the City with a complete set of "as built" drawings for that segment Further, after each
replacement, relocation, reconstruction, or removal Company shall promptly notify the City of the exact
changes made and shall provide a new set of "as built" drawings for each modification to the Facilities
Companyl shall provide annually a complete set of as-built drawings incorporating these changes
(G) Company shall be capable of providing services to the City no later than nine (9) months after the
passage of this Franchise ordinance Company shall promptly provide the City with evidence satisfactory
to the City, including without limitation "as-built" drawings, establishing that these requirements have
been met
13 REQUESTS BY CITY FOR RELOCATION OF COMPANY FACILITIES
(A) If at any time the C~ty requests the Company to relocate any facility installed or maintained ~n
pubhc streets or Public Easements, pursuant to th~s Franchise or prewous Franchises, ~n order to permit
the C~ty
to make any public use ofpubhc streets or Pubhc Easements,
2 to construct any pubhc ~mprovement,
3 to build any public project, or
4 to pursue any mumc~pal purpose m which the C~ty has a financml or ownership interest,
Such relocation shall be made by the Company at its expense w~thm a reasonable period of t~me not to
exceed forty-five (45) days after notice of request from C~ty unless otherwise specifically agreed to by the
C~ty
(B) As and when requested by the City, representatives of the C~ty and the Company shall meet to
share lnformatton regarding anticipated City projects which will reqmre relocation of Company Facdit~es
Such meetings shall be for the purpose of prowding the City w~th the estimated t~me table w~th~n which
the ~nvolved Company Faeflittes shall be relocated, including an anticipated start date (within a thirty day
window), so as to facilitate coordmat~on with the t~me table to be established by the C~ty for completion
of the City project
(C) Whenever by reason of the changes in the grade of any street or ~n the location or the manner of
constructing any water pipes, sewers, electric hnes, or any other underground or overhead structure for
any purpose whatever, It shall be deemed necessary by the C~ty to alter, change, adapt or conform the
Faethties thereto, such alteratmns or changes shall be promptly made by the Company when requested by
the City, w~thout claim for reimbursement or damages against the C~ty
(D) In the event that Company has not relocated those of ~ts affected Faciht~es which are located in a
pubhc street or Public Easement within a reasonable length of t~me as determined by the C~ty prior to the
C~ty's commencement date for public street or Public Easement construction, the C~ty shall have the right
to relocate or cause to be relocated the affected port~on of Company's Facilities and the Company shall
reimburse the City for all costs of relocation within ten (10) days of the City's bflhng to the Company
(E) Following relocation, all property shall be restored to substantmlly ~ts former cond~tion by the
Company at ~ts expense m accordance with then existing Ctty codes and specifications
(F) Nothing herein contained shall be construed to ~mpose any obhgat~on upon the City to make any
payment for any relocation of the Company's Faclht~es
(G) Relocated underground Facflittes shall be under ground Relocated aboveground Faclht~es shall
be above ground unless specified otherwise by the Ctty
14 WORK BY OTHERS, CONSTRUCTION BY ABUTTING OWNERS, ALTERATION TO
CONFORM WITH PUBLIC IMPROVEMENT
The C~ty reserves the right to lay and permit to be laid, electric power, sewer, Gas, water, and other p~pe
lines or cables and conduits, and to do and permit to be done, any underground and overhead work that
may be deemed necessary or proper by the City ~n, across, along, over and under any pubhc street or
Pubhc Easement occupied by Company, and to change any curb or sidewalk or the grade of any street In
9
permtthng such work to be done, the Ctty, ~ts officers or employees, shall not be hable to Company for
any damages caused by the neghgence of the City, tts officers or employees, promdtng, however, nothing
herem shall relieve any other person or entity from habd~ty for damage to Company's Famhttes Any
work done by any person or entity other than C~ty, tts officers or employees, shall be performed m a safe
and workmanhke manner so as to m~mm~ze the risk of damage to Company's Famht~es
15 CHANGING BOUNDARIES OF CITY AND ABANDONMENT
(A) If, during the term of th~s Franchise, the boundaries of the Ctty are expanded from t~me to trine,
the Company shall extend tts existing mare hnes, tf any, m the area of expansion 100 feet at Company's
expense ~f residents of the newly ~ncorporated areas wtll use gas apphances Company may reqmre
contnbuttons m a~d of construction for other extensions Servtce to newly expanded areas tn accordance
wah the terms of thts Franchise, lncludmg w~thout hm~tatton, payment of Franchtse fees and other fees
and payments provided here~n
(B) In the event that the Ctty shall close or abandon any pubhc street or Pubhc Easement whtch
contatns any portton of Company's Faclhttes, any conveyance of land contmned tn such closed or
abandoned public streets of Pubhc Easement shall be subject to the rights heretn granted
16 CITY NOT REQUIRED TO ADVANCE FUNDS
Upon recetpt of the Ctty's authorization for billing and constructton, the Company shall extend tts
Faed~ttes to prowde Gas for municipal uses within the Ctty or for any major mumc~pal facthty outstde the
Ctty hmtts w~thout requmng the C~ty to advance funds prior to constructton
17 TECHNOLOGICAL IMPROVEMENTS
(A) The Company shall generally introduce and tnstall, as soon as practtcable, technologmal advances
tn ~ts equipment and sermce w~th~n the C~ty when such advances are techmcally and economtcally
feastble and are safe and beneficial to the C~ty and tts Residents Upon request, the Company shall remew
and promptly report advances which have occurred in the Gas utd~ty tndustry that have been ~ncorporated
~nto the Company's operattons tn the City ~n the prevtous year or wtll be so incorporated tn the stx
months following the C~ty's request
(B) The Company shall report m advance to the Ctty any plans to mclude technologmal advances
whmh may utlhze Gas Factht~es already tn place, whtch may be ~nstalled by the Company for tts use, the
use of the Ctty, or for use of others as the C~ty may hcense The C~ty may use satd Famhttes for tts own
use wtthout cost, except such additional expense whtch may be mcurred by the Company as a result of the
Ctty's use In no event shall the C~ty's use materially ~mpatr the Company's abthty to use tts own Facthttes
for the purposes specffied hereto Upon request of the City, the Company wdl provtde a detaded report
for the use of such technological advances Nothing contained hereto shall be construed to authorize the
Company to engage m actlmt~es other than Gas sales and transportation for servtce to the Ctty and ~ts
Residents
18 CITY RULES AND REGULATIONS
(A) The Ctty expressly reserves, and the Company expressly recogmzes, the C~ty's right and duty to
adopt, from t~me to time, m addmon to the provts~ons herein contatned, such cost of servtce, cost of Gas,
10
charter promslons, ordtnances, rules and regulations as the C~ty deems necessary
(B) The construetton, expansion, reconstruction, excavation, use, maintenance, repair and operatton
of the Facthttes shall be subject to all laws, rules and regulations of the City, including without hmttatton
pohce, bmldmg code, and safety code regulattons as they may be amended from time to time The
Company shall comply wtth the same
(C) At a reasonable ttme and for a reasonable purpose, the City may
mspect, or cause to be tnspected, the books and records of Company,
2 lnvantory and appratse or cause to be tnventoned or appratsed the Faclbtles of Company
wtthm the Ctty,
3 compel the attendance of wttnesses and the production of books and records
19 COMPLIANCE WITH CITY AND RAILROAD COMMISSION QUALITY
SPECIFICATIONS AND REGULATIONS
(A) The Gas which the Company sells and transports shall conform with tile specifications
promulgated by the Ctty, as the same may be amended from ttme to ttme The Cay shall have access to all
records and Facthttes of the Company to momtor compliance with such specifications
(B) Prior to final adoption by the City of this Franchtse ordinance, the Company shall file wtth the
City and Ratlroad Commtssion such amendments to its tariffs as may be necessary to make its tariff
provtstons compattble wtth the provtslons of the ordmance, and shall report to the City any changes that
have been made for thts purpose
(C) The Company shall file w~th the City all tariffs, rules, regulations and policies under
consideration m addttton to those approved by the Ctty Council, by the Radroad Commtssion relatmg to
the Famlmes and operattons tn the City, any matters affecting the use of public streets and Public
Easements, or thts Franchtse The Company shall provide the City with a copy of filings it makes with the
Railroad Commtsston affecttng the same In addttton, the Company will provtde the City coptes of the
Company's most recent annual report, and all petttions, non-pnvdeged communicat~on reports, non-
pnvtleged adwce letters, audtts, complaints and apphcations together with supporting pre-filed testtmony
and exhtbtts filed by the Company or third parttes wtth the Railroad Commtssion that relate to the Ctty or
this franchtse
20 COMPLIANCE WITH ENVIRONMENTAL LAWS
Company shall take such measures whmh will result tn its Facthtles meettng the standards required by
apphcable federal, state and environmental laws The Company will provide the City w~th status reports
of such measures
21 OFFICE LOCATION
Company shall mmntmn an office and provide local and toll free telephone number, whtch shall provide
11
prompt, reasonable responses to Residents' service requests Company shall prowde a 24-hour toll free
telephone number for emergency use Company shall always keep and mmntam ~ts books, records,
contracts, accounts, documents and papers and shall make them available for ~nspect~on by C~ty officmls
and employees upon request
22 REPORTS ON COMPANY OPERATIONS AND ACTIVITIES
(A) The Company shall submit reports and tnformatlon to the City in the manner and form
prescribed by the Railroad Commission, or as successor, except as otherwise provided hereto
Upon the C~ty*s request, the Company and the C~ty shall meet to share reformation
regarding excavations ~n pubhc streets, Pubhc Easements, and other pubhc properttes made by the
Company w~thm the C~ty Information shared shall include
a Exact locations of excavations
b Date(s) excavating made
c C~ty pernnt number
d Contractor
e Purpose
f Cost
2 Should Company transport Gas w~thm the C~ty on behalf of third pames mcludtng
affihates, Company shall not~fy the C~ty of the sh~pper's name, address, telephone number, volume
transported, duration of transport arrangement, transport fee and such other mformatton requested by Ctty
from t~me to t~me, but m no event later than 72 hours prior to lmtml dehvenes
23 DETAILED BILLS
All bills sent to the C~ty by the Company shall include all tnformat~on requested by the C~ty including
w~thout hnntat~on account numbers, address and ~tems metered and they shall specify the type of account
for which charges are made for Gas service The Company shall provide the C~ty annually w~th a
complete hst~ng of all the C~ty's accounts
24 C1TY HELD HARMLESS AND INDEMNIFIED
(A) The Company shall construct, mamtmn and operate ~ts Famht~es ~n a manner which prowdes,
reasonable protection agmnst ~njury or damage to persons or property
(B) Notw~thstanthng any other prows~on of th~s Franchise, Company (the "lndemmtor")
acknowledges ~ts primary responsththty for the day-to-day operation of ~ts Famht~es ~n full accordance
w~th the terms of the Franchise The Indemmtor covenants, warrants and represents that Company will
conduct, operate and manage ~ts bus~ness and affmrs m comphance w~th all federal and state laws and all
rules and regulations, ~n addtt~on to all of the terms, reqmrements and prows~ons of th~s Franchise TIlE
INDEMNITOR AGREES TO DEFEND, INDEMNIFY AND IIOLD CITY, ITS OFFICERS,
AGENTS AND EMPLOYEES FULLY HARMLESS AGAINST ANY AND ALL CLAIMS
INCLUDING ENVIRONMENTAL CLAIMS, THAT MAY ARISE FROM OR BE OCCASIONED
BY ANY INTENTIONAL, WILLFUL, NEGLIGENT OR STRICTLY LIABLE VIOLATION
(CIVIL OR CRIMINAL) OF A FEDERAL, STATE OR LOCAL LAW, RULE OR
REGULATION BY THE INDEMNITOR, OR BY ANY PERSON OR FIRM HIRED BY OR
CONTRACTING WITH THE INDEMNITOR, OR IN THE OPERATION OR MAINTENANCE
OF INDEMNITORS FACILITIES THE INDEMNITOR SHALL FULLY REIMBURSE CITY
FOR ALL PENALTIES, FINES, FEES, COSTS, EXPENSES, DAMAGE SETTLEMENTS OR
JUDGEMENTS INCURRED OR PAID BY CITY AS A RESULT OF ANY OF THE
INDEMNITOR'S VIOLATIONS DESCRIBED ABOVE
(C) Nothtng herein contatned shall be construed as an acknowledgment by the parties that the
Company, m exerctstng tts rights and obhgattons under thts Franchtse, is an entity controlled by, subject
to the control of or acttng on behalf of the Ctty
(D) In the event the Ctty mstttutes httgat~on agatnst the Company for a breach of th~s Franchise or
for an tnterpretatton of the Franchise, and the Ctty ts the pmvadtng party, the Company shall reimburse
the Ctty for all costs related thereto, tncludmg w~thout hmttat~on court costs and reasonable a~orney's
fees None of the Ctty,s costs retmbursed by the Company under this Section shall be surcharged bY the
Company
25 NOTICE TO COMPANY
(A) Promptly after recetpt by an Indemmtee of any clatm or notice of the commencement of any
actton, admmtstrattve or legal proceedmg, or ~nvesttgatlon as to which the Indemmty provided for tn the
above Sectton hereof may apply, the Indemmtee shall not~fy the Company ~n wnttng of such fact
Company shall assume the defense thereof with counsel designated by Company and satisfactory to the
Indemmtee
(B) Should an Indemmtee be entttled to tndemmficatton under the above Section as a result of a
claim by a thtrd party, and Company fails to assume the defense of such clmm, the Indemmtee wdl, at the
expense of Company, contest (or, wtth the prior written consent of Company, settle) such thtrd party
claim
26 INSURANCE
(A) Company shall obtain and mamtam tn full force and effect throughout the term of th~s franchise
ordinance, and any extension or renewal thereof, insurance w~th an insurance company approved to do
business m the State of Texas and acceptable to the Ctty's R~sk Manager which conforms to the
reqmrements set forth hereto below The msurance shall be insured tn the standard form approved by the
Texas Department &Insurance and shall meet the reqmrements set forth hereto below Company shall
provide the Ctty's R~sk Manager wtth proof of such ~nsurance so reqmred at the t~me of fihng the
acceptance of franchtse The C~ty reserves the right to rewew these ~nsurance reqmrements durmg the
effective period of the franchise ordinance, and any extension or renewal thereof, and to adjust Insurance
coverage and thetr hmtts when deemed necessary and prudent by the City's Risk Manager based upon
changes In statutory law, court dectstons or the claims history of the industry, as well as Company
13
(B) Subject to Company's right to maintain deductibles in such amounts as are approved by the City's
Risk Manager, Company shall obtain and maintain m full force and effect for the duration of this
franchise ordinance, and any extension or renewal thereof, at Company's sole expense, insurance policy
coverage m the following type(s) and minimum amounts
FACILITIES OPERATION
Type Amount
I Workers' Compensation and Statutory
Employers Liability $100,000/500,000/100,000
2 Commercial General (public) Combined single limit for
Liability insurance including bodily injury and property
damage of $10,000,000 per
0) All premises/operations occurrence or its equivalent
(il) Independent contractors
(iii) Products/completed operations
0¥) Personal & advertising injury
(v) Contractual liability (no limItations)
(vi) Explosion, collapse and underground hazards
3 Comprehensive Automobile Combined single hmit for
Liability insurance, including bodily injury and property
coverage for loading and unloading damage of $1,000,000 per
hazards, for occurrence or its equivalent
0) Owned/leased automobiles
(n) Non-owned automobiles
(ill) Hired automobiles
FACII.ITIES MAINTENANCE REPAIR AND/OR CONSTRUCTION
Type Amount
1 Workers' Compensation and Statutory
Employers Liability $500,000/500,000/500,000
2 Commercial General (public) Combined single limit for
Liability insurance including bodily injury and property
damage of $10,000,000 per
(0 All premises/operations occurrence or its equivalent
0t) Independent contractors
(iii) Products/completed operations
0v) Personal & advertising injury
(v) Contractual liability (no limitations)
(vt) Explosion, collapse and
underground hazards
3 Comprehensive Automobile Combined single limit for
Liability insurance, including bodily inJury and property
coverage for loading and unloading damage of $1,000,000 per
hazards, for occurrence or its equivalent
0) Owned/leased automobiles
(it) Non-owned automobiles
(m) Hired automobiles
(c) The City shall be entitled, upon request and without expense, to receive copies of the pohcies
and all endorsements hereto The City may make any reasonable requests for deletion, revision or
modification of particular policy terms, conditions, limitations or exclusions, except where policy
provisions are established by law or regulation binding upon either City or Company or upon the
underwriter for any of such policies Upon request for deletion, revision or modification by the City,
Company,shall exercise reasonable efforts to accomplish the changes in policy coverages, and shall pay
the cost thereof
(d) Company agrees that with respect to the above required insurance, all insurance contracts will
contain the following required provisions
Name the City and its officers, employees, board members and elected representatives as
additional msureds (as the interests of each insured may appear) as to all applicable coverage,
2 Provide for thirty (30) days notice to the City for cancellation, non-renewal, or material
change at the address shown below by registered or certified mall,
3 Company agrees to waive subrogation against the City, its officers and employees, for
personal injuries (including death), property damage or any other loss,
4 Provide that all provisions of the franehme ordinance, as amended, concermng habfllty,
15
duty, and standard of care, including Indemnity, contractual liability coverage sufficient to
include such obhgat~ons within apphcable pohc~es, and
5 Prowde that the "other insurance" clause shall not apply to the Ctty where City Is an
additional msured shown on the pohcy
(e) Company shall not~fy C~ty m the event of any changes in coverage and shall give such nottces
not less than thirty (30) days prior to the change, whtch notice must be accompanied by a replacement
Certfficate of Insurance All notmes shall be given to C~ty at the following addresses
City Manager
City of Denton
215 E McKmney
Denton, Texas 76201
(f) Company shall ~mmedmtely advise the C~ty Rtsk Manager of any actual or potentml lltigat~on that
may develop that would affect th~s insurance
(g) Insurers shall have no right of recovery against the City, it being the mtentmn that the insurance
pohc~es shall protect Company and the C~ty and shall be primary coverage for all losses covered by the
pohcies
(h) Compames lssmng the insurance pohmes shall have no recourse against the City for payment of
any premmms or assessments whmh are the sole responslbthty of Company
0) I Without bruiting any of the other obligations or habihties of Company, Company shall require
each subcontractor performing work under the franchise ordinance to maintain, at the
subcontractor's own expense, during the term of the franchtse ordinance, the same sttpulated
minimum insurance, including the reqmred provis~ons and addmonal policy conditions as shown
In (b) above As an alternative, Company may include its subcontractors as additional msureds on
~ts own coverage as prescribed under these reqmrements (except for worker's compensation
insurance, which the subcontractors must separately obtain) Company's certificate of insurance
shall note In the event that the subcontractors are included as addition msureds
2 Company shall obtain and monitor the certificates of insurance from each subcontractor m
order to assure comphance with the ~nsurance requirements Company must retain the
certificates of insurance for the duration of this Franchise, and shall have the responsibihty of
enforcing these insurance reqmrements among ~ts subcontractors The City shall be entitled,
upon request and w~thout expense, to receive copies of these certificates
(j) Approval, disapproval or failure to act by the City regarding any ~nsurance supphed by Company or
its subcontractors shall not reheve Company of full respons~bdity or liability for damages and accidents
as set forth ~n th~s Franchtse Neither shall bankruptcy, insolvency or denial of liability by the ~nsurance
company exonerate Company from habfllty
(k) Company may self-insure to the extent permitted by apphcable law under any plan of self-
insurance, mamtamed m accordance with sound accounting practices, against risks described m th~s
section and shall not be required to maintain insurance, prowded that Company furnishes the City
satisfactory evidence of the existence of an insurance reserve adequate for the risks covered by such plan
of self-insurance
(1) Company shall provide the City w~th evidence of the form and bas~s for insurance coverages or
self ~nsurance prior to the effective date of this franchise ordinance Should Company elect to change the
form or basis of insurance dunng the term of th~s Franchise, Company shall not~fy the City Company
shall provide all doeumentatton necessary for review by the C~ty of the changed ctreumstances of
Company Company shall not undertake any activtty reqmrmg insurance pursuant to th~s franchise
ordinance, until receiving written confirmation from the City that the reqmrements contatned ~n th~s
section have been met Failure to comply w~th thts prowslon may result in the tmmedlate term~natton of
th~s franchise ordtnance
27 BONDS
(A) Company shall obtain and ma~ntmn, at its sole cost and expense, and file w~th the C~ty Secretary
prior to the commencement of any construetton anthorlzed by th~s franchise, a corporate surety bond with
a surety Company anthonzed to do bustness ~n the State of Texas and m accordance w~th Section
2253 021 of the Texas Government Code m the amount of One Hundred Thousand Dollars ($100,000 00)
to guarantee Company's performance for the construction of Company's facdtt~es The bond may be
adjusted in subsequent years in accordance wtth Construction Projecnons ~n the Exhibit attached to 25%
of the projected constructton costs, but tn no event less than $25,000
(B) The rights reserved to the City wtth respect to the bond are ~n addition to all other rights of the
City, whether reserved by thts Franchise ordinance or authorized by law, and no action, proceeding or
exermse of a right wtth respect to such bond shall affect any other rights the C~ty may have
28 PAYMENT OF EXPENSES INCURRED BY CITY IN RELATION TO ORDINANCE
(A) At the C~ty's option, the Company shall pay tn advance or reimburse the C~ty for expenses
tncurred tn any proposed transfer of the Franchtse including, without hm~tatlon attorney's fees,
consultants' fees, pubhcation of nottces and ordtnances and for photocopying of documents arlstng form
the negottation ofthts Franchise
(B) All City expenses retmbursed by the Company under th~s section shall not be surcharged by the
Company
29 RIGHT OF FIRST PURCHASE
(A) In the event the Company at any ttme during the term of the Franchise proposes to sell or dispose
of any of tts Facflmes located wtthtn the City, it shall grant to the C~ty the right of first purchase of same
The Company shall obtain a quahfied appratsal on any such Famht~es and the C~ty shall have s~xty days
from the ttme such appraisal ts provtded to the Ctty ~n which to exercise the right of first purchase by
17
g~wng written not,ce to the Company Should the City not prowde the reqmred written not,ce, the
Company may proceed to negotiate w~th others for the sale of such Fac~ht~es provided that the Company
may not sell such FacthtleS for an amount less than 95 percent of the appraised value w~thout first
prowdmg the Ctty an opportumty to purchase such property at such lesser price, ~n which event the C~ty
must not~fy the Company m writing within 30 days ffw~shes to purchase such Fatalities
(B) Upon the exercise of the C~ty's option to purchase, other than under subsection (A) above, the
part~es shall negotiate m good froth to determine a mutually acceptable purchase price No value shall be
g~ven to the Franchise or to pubhc r~ght-of-way
(C) Notwtthstand~ng anything herein to the contrary, ~f the C~ty and the Company cannot reach
agreement as to the purchase price or acceptable payment terms w~thm mnety (90) days after
commencement of negotiat~ons, the C~ty may commence condemnation proceedings, and each party shall
have rtghts prowded by law relating to condemnation prowded, however, no award shall be made for the
value of the Franchise or pubhc r~ght-of-way
30 CITY'S RIGHT TO PURCHASE OR. CONDEMN
Company agrees, acknowledges, and affirms City's right to construct, purchase or condemn any pubhc
utd~ty works, Facthties or rights-of-ways of the Company ~s hereby expressly reserved
(A) In the event the C~ty exercises ~ts optmn to purchase or condemn, the Company agrees that ~t, at
the C~ty's request, will continue to prowde the services ~t provides under th~s Ordinance untd further
not~fied otherwise by the C~ty
(B) The Company shall cooperate w~th the C~ty by making available the ex,sting pertinent Company
records to enable the C~ty to evaluate the feas~b~hty of acqmsmon by the C~ty of Company Facd~ties
(C) The Company shall take no action which could ~nh~b~t the C~ty's ab~hty to effectively or
effictently use the aeqmred Factht~es
(D) At the C~ty's request, the Company shall supply Gas for use by the C~ty m the C~ty-owned
Facdmes according to Company's latest approved tariff
31 LIMITATIONS OF COMPANY REMOVAL OF FACILITIES
(A) In the event th~s Franchise tn not renewed at the expiration of ~ts term, ~s forfetted, or the
Company terminates any service provided hereto for any reason whatsoever, and the C~ty has not
purchased or condemned the Facdit~es and has not prowded for alternative Gas service, the Company
shall not remove the Facthttes pending resolution of the dlsposmon of the Factht~es The Company
further agrees it w~ll not w~thhold any temporary services necessary to protect the pubhc and shall be
entitled only to monetary compensation tn no greater amount than to which ~t would have been entitled
were such services prowded during the term of th~s Franchise Only upon receipt of written not,ce from
the Ctty stating that the C~ty has adequate alternative Gas sources and dehvery systems to prowde for the
Residents of the C~ty shall the Company be entitled to remove any or all of the Fac~ht~es m use under the
18
terms of th~s Franchise
(B) Upon request from the C~ty and within a reasonable time, the Company, at its expense, shall
remove from the public streets easements and other pubhc properties the above ground distribution
Facilities helongmg to the Company which are not otherwise purchased by the City at the termination of
the Franchise All property affected by such removal shall be restored by the Company to substantially its
former condition after said removal
32 TRANSPORTATION AND PROCUREMENT OF GAS BY CITY
The City expressly reserves the right to procure, transport and resell Gas If requested by the City the
Company shall transport Gas purchased by the City through its Faclhtles for use by the City ~n its
Facilities and/or its Residents pursuant to separate transportation contracts with the City and in
accordance w~th Grantee's tariffs
33 CURTAILMENT
The Company shall not curtail Gas dehvenes except in compliance with the Company's curtailment plan
approved by the Rmlroad Comm~ssion
34 PENALTIES
For the violation of any of the following prowslons of this Franchise, penalties shall be paid by Company
w~thln ten days of assessment by City Resolution m addition to any other rights or remedies the C~ty may
have at law or In eqmty
(A) For fadure to complete construction m accordance with agreed plans, unless the City
specifically approves the delay, Company shall pay Two Hundred Dollars ($200 00) per day for each day,
or part thereof, that the fmlure continues
(B) For fadure to provide data, documents, reports, information or to cooperate with City during an
audit, Company shall pay Two Hundred Dollars ($200 00) per day for each day the violation occurs or
continues
(C) For failure to comply with any financial obligation required herein, Company shall pay to City
Two Hundred Dollars ($200 00) per day for each day, or part thereof, that such noncompliance continues
(D) For failure of Company to comply with operational or maintenance standards, Company shall
pay to City Two Hundred Dollars ($200 00) per day for each day, or part thereof, that such
noncomphance continues
(E) For failure to provide In a continuing manner the services specified herein, Company shall pay
Two Hundred Dollars ($200 00) per day for each day, or part thereof, that each noncompliance continues
(F) C~ty will not adopt resolution prior to consideration at a public hearing presided over by City's
19
govermng body, setting forth alleged fadures complained of and allowance of company to respond to
alleged fatlures Company to reeetve thtrty (30) days written notice of failures complatned of and thtrty
(30) days written notice of the pubhc heanng date and t~me to constder adoption of resolutton
(G) Should the new Lone Star Gas Franehtse result m an mcrease m the franchise fee to 4%, then per
Section 4(A) thts franchtse tncreases as well and the datly ctwl penalty m subsectton (A) through (E) shall
be reduced to $100 If Lone Star's franchtse fee does not increase but ~ts penalty ~s reduced below $200,
then thts penalty provtslon will be adjusted aecordtngly
35 FORECLOSURE
Immedtately upon Company recelwng nottce or knowledge of attempt to foreclose, foreclosure
proceedtngs or other judicial actton pertaining to all or a substantml part of the Faclhttes, or upon the
termmatton of any lease covering all or a substanttal part of the Facd~ttes, the Company shall notify the
Ctty of such fact, and such notfficatlon shall be treated as a notfficatton that a change m ownershtp of the
Company has taken place, and the provlstons of thts Franchtse govermng the consent of the C~ty to such
change m ownership of the Company shall apply
36 FORFEITURE AND TERMINATION
(A) In addltton to all other rights and powers retmned by the Ctty under th~s Franehtse or otherwtse,
the Ctty reserves the right to forfett and termtnate the Franchise and all rights and pnvdeges of the
Company,hereunder in the event of a breach of ~ts terms and condtttons A breach by Company shall
tnclude, but shall not be hmlted to, the following
Repeated molatton of any provtston of the Franchise or any rule, order, regulation or
determtnaUon of the Ctty made pursuant to the Franchise after receipt of written notme
from Ctty,
2 Attempt to dtspose of any of the Faetlmes or property of tts Fac~llttes or real property to
prevent the Ctty from purchasing tt, as provtded for herem,
3 Attempt to evade any provtslon of the Franchise or to practme any fraud or dece~t upon
the City or tts Restdents,
4 Failure to begtn or complete Gas facd~ty constructton and/or extension as agreed to w~th
the City,
5Repeated fadure to provide the services set forth in the Franchtse,
6 Repeated fatlure to restore servtce after 48 consecutive hours of mterrupted servtce,
except when approval of such tnterruptton ts obtained from the City or "force majure"
exists, or
7Material m~srepresentatlon of fact tn the apphcat~on for or negottatton of the Franchise
8 Convmtlon of any director, officer, employee, or agent of the Company of the offense of
bribery or fraud connected w~th or resulting from the awarding of thts Franchtse to the
Company
(B) The foregoing shall not constttute a breach tf the vtolat~on occurs w~thout fault of the Company
or occurs,as a result of circumstances beyond tts control whmh could not have been avoided as a result of
20
the exercise of reasonable care Company shall not be excused by mere economic hardsh,p nor by
misfeasance or malfeasance of Its &rectors or officers
(C) The City Council retains the right to terminate this Franchise ordinance, Company's use of the
public streets or Public Easements ,s ,nconsistent with the public use or whenever the Company's use has
(D) The City may make a written demand that the Company comply with any such provis~on, rule,
order, or determination under or pursuant to this Franchise If the violation by the Company continues for
a period of thirty (30) days following such written demand without written proof that the corrective action
has been taken or is being actively and expeditiously pursued, the City may take under consideration, at a
public hearing presided over by the City's governing body, the issue of tenmnat,on of the Franchise The
City shall cause to be served upon Company, at least th,rty (30) days prior to the date of such a hearing, a
wr,tten notice of intent to request such termination and the time and place of the hearing Public notice
shall be given of the hearing and the issue which the City is to consider
(E) The City shall hear and consider the issue and shall hear any person tnterested therein C,ty
Council thereafter shall determine whether or not any violation by the Company has occurred
(F) If the City shall determine that the violation by the Company was the fault of Company and
within its control and could not have been avoided with exercise of reasonable care, the C,ty may declare
the Franchise of the Company forfeited and terminated, or the Council may grant to Company a period for
compliance
37 OTHER LEGAL REMEDIES/RIGHT OF APPEAL
(A) Neither the City nor the Company by accepting this Ordinance waives its right to seek all
appropriate legal and equitable remedies as allowed by law upon violation of the terms of this Ordinance
by the other party, including seeking injunctive rehef m a court of competent jurisdictmn Such right to
seek injunctive relief is expressly reserved and all terms and provisions hereof shall be enforceable
through injunctive relief
(B) Nothing herein shall be deemed to constitute a waiver, release, or rehnqulshment of the City's or
the Grantee's right to contest or appeal any action or decision of the other party made contrary to any
federal, state or local law, rule or regulation
38 NO WAIVER
Neither the City nor the Company shall be excused from complying with any of the terms and conditions
of this Franchise by any failure &the other, or any of its officers, employers, or agents, upon any one or
more occasions to insist upon or seek compliance with any such terms and conditions
39 SUCCESSORS AND ASSIGNS
The rights, privileges, and obhgatlons granted and contmned ~n this Franchise shall ~nure to the benefit of
and be binding upon the Company, its successors and assigns
40 REPRESENTATIVES AND NOTICES
(A) Upon request by the C~ty, the Company shall prowde annually to the Cay a current chain of
command chart showing all managers and supervisors, along w~th their names, titles, addresses, telephone
numbers, up to the Chief Executive Officer of the Company, who have responsibility for prowdmg
servmes wtth~n the C~ty
(B) All notices, mcludmg commumcat~ons and statements whmh are reqmred or permitted under the
terms of this Agreement, shall be ~n writing, and evidenced by receipt Servme of a not~ce may be
accomphshed by personal service, registered or certified marl (postage prepmd) or reputable overnight
courier service
Notices shall be sent to the Partms at the following addresses
I C~ty
C~ty Manager
C~ty of Denton
215 E McK~nney
Denton, Texas 7620 t
2 Company
Director of Regulatory Affmrs
CoSer~ Gas
3501 FM2181
Corinth, Texas 76205
From t~me to t~me C~ty and Company each may designate a new address for itself for purpose of not~ce
hereunder by written notme to the other duly g~van as prowded hereto
41 SEVERABILITY
Should any one or more prowslons of th~s Franchise be determined to be illegal or unenforceable, all
other prows~ons nevertheless shall remain effective prowde, however, the parties shall forw~th enter into
good froth negottattons and proceed wtth due diligence to draft a term that will achieve the original intent
of the pames hereunder
42 ENTIRE AGREEMENT
This Franchise constitutes the entire agreement of the pames There have been no representations made
other than those contained in this Franchise
43 COMPANY APPROVAL
The Company shall file with City Manager written approval of this Franchise and of all of its terms and
provisions at least ten days prior to the City Council meeting at which the ordinance granting the
Franchise is to be approved
44 ANNEXATION TO THE CITY
When any property owned by the Company becomes eligible for voluntary annexation to the City and ~s
not simultaneously eligible for voluntary annexation to another municipal corporation, the Company shall
petition to annex the same upon request made by the City, provided that no condition of such annexation
shall impair the Company's ownership or then existing use of its property Except as hereto provided, the
Company agrees to meet all terms and conditions imposed upon the annexation by the C~ty that are no
more stringent than those imposed generally upon property owners seeking annexation of their land to the
City The Company shall be exempted from a public donation of land, money or water rights arising
from such mandatory annexation under this section to the extent that the land being annexed is
committed, dedicated and being utilized by Facilities directly involved In transporting or distributing Gas
under this ordinance, and provided further that said exemption from public donation shall not extend to
any unimproved land or land not so committed, dedicated and currently used
45 THIRD PARTIES
Nothing contained in this Franchise shall be construed to provide rights to third parties
46 COMPLIANCE WITH CITY CHARTER
Company recognizes, accepts and agrees that the terms, conditions and provisions of this Franchise are
subject to the applicable provisions of the City Charter Any request by Company for a modification to
this Franchise shall be subject to a review by the City Attorney for comphance with the applicable
provisions of the City Charter
47 APPLICATION OF TERMS IN COMPETING FRANCHISES
The terms of this Franchise which are not contained in the franchise of any entity
obtmmng or renewing a franchise for gas within City from and after January 1, 1999 shall be
unenforceable To the extent terms more favorable to the franchisee are contained in another
franchise for gas obtmned or renewed by the City from and after January 1, 1999, such terms
shall be applicable to Company as if contained herein and shall control over the terms contained
herein
48 EFFECTIVE DATE
This Franchise ordinance shall take effect twenty-one (21) days after its final passage, pending
23
pubhcat~on of the ordinance as reqmred by Sec 13 02 of the C~ty Charter, and acceptance m accordance
w~th the provisions of the Charter of the C~ty and it ~s accordingly so ordamed
PASSED AND APPROVED this the ff6~day of L~_~/_g.r'~'~/~/ ,19 ff~:~
J .
YOR
ff Mem
Councd Member
Councd Member
ATTEST
JENNIFER WALTERS, CITY SECRETARY
~pROvE~D AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
The above and foregotng or~,ance read, adopted on first reading and pas.sed to second reading by the
followmgvotes, thlsthe ~ ~ dayof LV'-rZt'//Z6?.,~&{ , 19~d~ , at a regular sess~on of the
City Councd
~0/7/' d'"~&O~/~t~ Council Member, voting
&6~/~ (t~/-Z~FO~5]~~ Council Member, voting
/r~//~t~ ~)~'t~ Coune,1 Member, voting
ounc. Member. vot,n
/fr; Ob.C ou.cd Member, vot,n
(..../'
The above and foregoing ordinance read, adopted on s~cond reading and passed by the following votes,
tb,st~e /q~ dayof ~Tanaa.r~ ,~¢q ,atare~nlar~ess,o. oftbeOtyConnc"
~ek ~rill~er Mayor, voting
~n~~a~lcu ¢ounc. Member, votm~
/
We/~/~6/~f6~.4~ Counc,l Member, voting
Council Member, voting
STATE OF TEXAS §
COUNTY OF DENTON §
I, (~lt~L~/~]~C~ty Secretary of the C~ty of Denton, Texas, do hereby certify
that the a~e and[~oreg[tn~ ts a tree and co~ect copy of the fr~ch~se for gas ordinance be~een the
C~ of D~nton, Texas, and CoSe~ Gas, an affihate of Denton Coun~ Elecmc and that the full text of the
ordinance was pubhshed once each week for ~o consecutive weeks ~n the Denton Record-Chromcle, the
officml newspaper of the C~ of Denton The same ~s now recorded as Or&nance No ~ofthe
Or&nance Records of the C~ of Denton, Texas
w~m~ss ~ ~N~ ~,~ th~ d~y of~ ~ ~, ~ q g
25
ACCEPTANCE
WHEREAS, the C~ Councd of the Cfly of Denton, Texas, did on the ! q day of
~(~lu, C~ ,19 q~ , enact an Ordinance entitled
AN ORDINANCE WHEREBY THE CITY OF DENTON, TEXAS, GRANTS
TO COSERV GAS A NON-EXCLUSIVE FRANCHISE TO FURNISH,
TRANSPORT, SELL AND DISTRIBUTE GAS TO CUSTOMERS IN
DENTON, TEXAS, FOR A PERIOD OF TEN (10) YEARS FOR A
FRANCHISE FEE IN THE AMOUNT OF 3% OF REVENUES COLLECTED
AND PROVIDING DEFINITIONS, PROVIDING A PAYMENT SCHEDULE
AND STATEMENT OF REVENUES, PROVIDING FRANCHISE FEE NOT IN
LIEU OF OTHER FEES AND CONTRACT OBLIGATIONS, PROVIDING
DEPENDABLE GAS SUPPLY AT LOWEST REASONABLE COSTS,
PROVIDING OBLIGATIONS REGARDING COMPANY FACILITIES,
LONG-RANGE PLANNING FOR CAPITAL IMPROVEMENT PROJECTS,
CiTY REVIEW OF CONSTRUCTION AND DESIGN, REQUESTS BY CITY
FOR RELOCATION OF COMPANY FACILITIES AND WORK BY OTHERS,
PROVIDING FOR CHANGING BOUNDARIES OF CITY AND
ABANDONMENT, PROVIDING CITY NOT REQUIRED TO ADVANCE
FUNDS, PROVIDING FOR TECHNOLOGICAL IMPROVEMENTS,
PROVIDING FOR COMPLIANCE WITH CITY RULES AND
REGULATIONS, RAILROAD COMMISSION SPECIFICATIONS AND
REGULATIONS, AND ENVIRONMENTAL LAWS, PROVIDING OFFICE
LOCATION, REPORTS ON COMPANY OPERATIONS AND ACTIVITIES
AND DETAILED BILLS, PROVIDING CITY HELD HARMLESS AND
INDEMNIFICATION, NOTICE TO COMPANY, INSURANCE AND BONDS,
PROVIDING PAYMENT OF EXPENSES INCURRED BY CITY IN
RELATION TO ORDINANCE, PROVIDING RIGHT OF FIRST PURCHASE,
RIGHT TO PURCHASE OR CONDEMN, LIMITATIONS OF COMPANY
REMOVAL OF FACILITIES, TRANSPORTATION AND PROCUREMENT
OF GAS BY CITY AND CURTAILMENT, PROVIDING CIVIL PENALTIES,
FORECLOSURE, FORFEITURE AND TERMINATION AND OTHER LEGAL
REMEDIES, PROVIDING NO WAIVER, RIGHTS OF SUCCESSORS AND
ASSIGNS, REPRESENTATIVES AND NOTICES, SEVERABILITY, ENTIRE
AGREEMENT, COMPANY APPROVAL, ANNEXATION TO THE CITY
AND THIRD PARTIES, PROVIDING COMPLIANCE WITH CITY CHARTER
AND APPLICATION OF TERMS IN COMPETING FRANCHISES, AND
PROVIDING AN EFFECTIVE DATE,
and
WHEREAS, smd Ordinance was on the Iq day of~ 19~"~ , duly
approved by the Mayor of said City and the seal ofsa~ City was the~to aflixet~ and attested ~yytl~e C~ty
Secretary,
NOW, THEREFORE, CoServ Gas, an affiliate of Denton County Electric, hereby in all respects
accepts, approves, and agrees to smd Ordinance, and same shall constitute and be a binding contractual
obhgat~on of CoServ Gas and of the City without wmver of any other remedy by CoServ Gas or the City
and files thts ~ts written acceptance w~th the City Secretary of the City of Denton, Texas, in h~s/her office
Datedth~s t,~ff dayof t~bn~t~ AD 19 ~
COSERV GAS, AN AFFILIATE OF
DENTON COUNTY ELECTRIC
ATTEST
Secretary
Acceptance filed in the office of the City Secretary of Denton, Texas, this ~'~day of
City ~tretary
Ga$
Corh~th, Tex~ 76205
Metro 817-430-1195
FAX 940-497.6525
December 10, 1998
Mr Michael Bucek
F~rst Assistant C~ty Attorney
City of Denton
215 E McKInney
Denton, TX 76201
Dear Mr. Bucek
By th~s leffer, CoServ Gas formally accepts the draft franchise dated December 9, 1999
and transmitted by you on that date via e-mad
We appreciate your efforts to negotiate complex issues over a relatively short period of
time We also appreciate the need to erasure that franchise agreements protect the City
and the public It serves
However, we do not believe it appropriate to impose requirements on CoServ Gas that
are more stringent than those for other gas utilities Gwen more time, we would I~ave
been able to make a persuasive argument that ~t was neither equitable nor necessary to
do so However, we must meet obligations we have made, and therefore accept the
franchise as you have amended IL
Again, we appreciate your efforts In expediting th~S matter, end please let us know wha
we can do to expedite/s consideration by the Council Thank you
Since
Director of Regulatory Affairs
~~~~UNIVERSAL SURETY OF AMERIC
TEXAS .STATUTORY PERFORMANCE BOND
(Public Works)
Bond No TX 3531473 00
KNOW ALL MEN BY THESE PRESENT5
THAT, CoServ Gas. Ltd (hereinafter called the Principal), as principal and UNIVERSAL
sURETY OF AMERICA, a corporatmn orgamzed and ex~stmg under the laws of the State of Texas,
hcensed to do business m the State of Texas and admitted to wrote bonds, os surety, (hereinafter
called the Surety), and held and firmly bound unto C~ty o[ Denton. Texas (hereinafter called the
Obhgee), m the amount of One Hundred Thousand and no/]OO ..........................................
(Dollar's) ($ 100,000,00) for the payment whereof, the smd Pmnc~pal and Surety brad themselves, and
their heirs, administrators, executors, successors, and assigns, jointly and severally, f,rmly by these
presents
¢'/~ WHEREAS, the Principal has entered into franchise agreement w~th the Obhgee, dated the
lq day of .~maar~ .1gq ~, for furmshma transport, sell and d~stmbute gas to
custo ers in Denton Tex~s which contract s hereby referred to and made a port hereof as fully and
to the same extent as ff copmd at length harem The term of th~s bond ~s for one year begmnmg
,~-°l-lqq°l and ending ¢q-~-~.o~o Th,s bond ~s subject to renewal annually by executmn
of a new bond
NOW, THEREFORE, THE CONDITION OF THIS OBL~&ATION I,~ SUCH That ~f the
smd Principal shall fmthfully perform the work m accordance w~th the plans, spec~ficatmns and
contract documents, then, th~s obhgatlon shall be null and vmd otherwise to remmn m full force and
effect
PROVIDED, HOWEVER, that th~s bond ~s executed pursuant to the prowsmns of Chapter
2253 of the Texas ~overnment Code and all liabilities on this bond shall be determined in accordance
w~th the provlmons, conditions and hm~tat~ons of sa~d Chapter to the same extent as ~f ~t were copmd
at length herein
ZN WZTNE$5 WHEREOF, the said Principal and Surety hove mgned and sealed this
,nstrument th~s q¥~ day of ~¢bruaro. ,19 q~
Prmc~pal
cos y t_To
Surety UNIVERSAL SURETY OF AMER]:CA
~ttorney-I~-Fact ~"
1 cne Ie ueqnon
~~~~UNIVERSAL SURETY OF AMERICA
giV: !R SAL S RETY OF AMERICA
UI .~ 2. ~ ,!'~ '.p.O~BOX 106~ ,H~uston, Texas 77251-1068
~ GRNR~ PO~ E ATTO~EY - CERTIFIED COPY
,1 ' TX 3531473 00
~ow All Meg ~ ~ "*~*~' *~' ~'" ~ -" '~ ~ ......... ~ ~otnt
~e S~le ofTex~, ~ ~ lts,~olpal offi~ m Ho~, Text, ~s,bY ~e~ Pr*~nts ~' mnsnm~ ~ a~v
La. -~ ' ¢I ~nMn D~d John D ~e~on
of D~ , [' ~ S~te of T~s , ~ l its ~ ~d hw~ A~mey(s)-m-Faot, w~ ~11 power ~ a~on~ ~by
~ l , Bo~ not ~oxc~ $250,~ ~ ~ss ~ch is aocomp~od by le~r ~f
, ~ ~ ~a~W ~d by ~e ~st~nt, S~c~ or ~xwuave Vice
,;~ *g~v*~ ~nv ~ m ~,~eX~t ~ ifs~h ~nds were sl~ by ae ~si~ so~ wt~ ao c~ora~ ~al of~o
~ to brad ~ ~ml ~..~-~-Yt~-aT~-~-. ~., ~,t.~ ~ c~mo all ~t ~ smd A~m~(s).m-~t ~y ~ ~ ~ s~
~mn~ ~d,su~ a~ogW, t~ to i~n~,~e ~l L 6/~0/~000 , Smd ~pom~nt ~s ~ ~ ~ ~Y aumon~ el me
d.,~_ ~.~a.;~ ..a ~V ~ice ~id*nt Se~m-- or ~y Asms~t Se~e~ s~ll be ~ is ~by ves~ ~ ~11 ~we
lut ~v o~ Or mo~ ~t~le ~nS ~ A~mey(s)-m-Fact to ~pm~nt ~d act for ~d on ~f of ~ mp~y
"RESOLVED ~ ~0 a~ of ay offi~r qf ~ c~gr~on, ~ ~o ~at of ~ ~o~pmu~n.~ ~e affix~ or lie ~ ~y
pow~ ofa~y of ~e oq~aflonf~ ~ ~h pnn~f~o ~e ~ ~t ~11 oe vain ~a mn~ng upon me
~ WItn~s ~ ~f, U~e~sal 8u~ ~*~*~ has ~used ~e p~snts m be sl~ by I~ Pr~lden~ Jack Mc~ynol~ and
~ora~ s~l m b ~ h~re~ ~ ~ lnd d~y of J~a~~, A~, 1~
On ~is 2m a~ of Ja~s~ ~ the vSar l~8,]~fore me, Estela ~lJ~ s nota~ publl~ ~e~on~ appeared J~ck. Mc~eynol~
penonsl* ~o' ~ m5~ ~ p~n~h~ eg~uad tSe ~am ins~umeut ~ ~sldent, onoehaU o~the eorpo~Uon ne~m nameo
Ong~l Pow~ of ~ ~ t~ by ~ Comply, ~ ~mby ~ c~ ~t ~ ~d Power ofi~o~ Is mill in ~ff~
~ ~y' l~t~ont iss~ in ~ws* of ~o ~ ~ above Is to~y void ~d without ~y va~d~
~ vefifl0a~on of ~e au~W of~s pow~ you ~y telephone (713) 722~6~ 14~1-1~0