Ordinance No. 1124 05-10-1999 ORDINANCE NO. 1124
OFFICIAL TITLE AND SUMMARY
Title
An ordinance amending the City Code of the City Of Fridley,Minnesota,to repeal Chapter 404, entitled
"Gas Franchise"and adopt a new Chapter 404,entitled"Gas Franchise".
Summary
The City Council of the City of Fridley does hereby ordain as follows:
The ordinance repeals the existing ordinance and grants Reliant Energy Minnegasco the right to import,
manufacture, transport, distribute and sell gas for public and private use within and through the limits of
the City. Reliant Energy Minnegasco may construct, operate, repair and maintain gas facilities in, on,
over, under and across the public way and public ground subject to provisions of the ordinance. This
ordinance is for a period of twenty(20)years and does not grant an exclusive franchise.
Notice
This Title and Summary have been published to clearly inform the public of the intent and effect of the
City of Fridley's Gas Utility Franchise Ordinance. A copy of the ordinance, in its entirety, is available
for inspection by any person during regular business hours at the offices of the City Clerk of the City of
Fridley, 6431 University Avenue NE,Fridley,Minnesota, 55432.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 10'x`
DAY OF MAY, 1999.
I ANC 11J/O;/G.SON-MAYOR
ATTEST:
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Cam` 7/ 4`�
DEBRA A. SKOGEN CITY CLERK
Public Hearing: April 12, 1999
First Reading: April 26, 1999
Second Reading: May 10, 1999
Publication: May 20, 1999
ORDINANCE NO. 1124
ORDINANCE AMENDING THE CITY CODE OF THE CITY OF FRIDLEY,MINNESOTA,
TO REPEAL CHAPTER 404,ENTITLED"GAS FRANCHISE"AND ADOPT A NEW
CHAPTER 404,ENTITLED"GAS FRANCHISE"
The City Council of the City of Fridley does ordain as follows:
SECTION 1. DEFINITIONS. For purposes of this Ordinance,the following capitalized terms shall
have the following meanings:
1.1. City. The City of Fridley,County of Anoka,State of Minnesota.
1.2. City Utility System. Facilities used for providing non-energy related public utility service
owned or operated by the City or agency thereof,including sewer and water service,but
excluding facilities for providing heating or other forms of energy.
1.3. Commission. The Minnesota Public Utilities Commission,or any successor agency or agencies,
including an agency of the federal government that preempts all or part of the authority to
regulate gas retail rates now vested in the Commission.
1.4. Company. Reliant Energy Minnegasco, a Division of Reliant Energy Resources Corporation,its
successors and assigns,including successors to assignees of those portions of the Company that
constitute any part of parts of the Gas Facilities subject to this franchise.
1.5. Effective Date. The date on which the ordinance becomes effective under Section 2.2.
1.6. Gas. Natural gas,manufactured gas,mixture of natural gas and manufactured gas or other forms
of gas energy.
1.7. Gas Facilities. Gas transmission and distribution pipes,mains,lines,ducts, fixtures, and all
necessary facilities,equipment and appurtenances owned,operated or otherwise used by the
Company for the purpose of providing gas energy for public use.
1.8. Non-Betterment Costs. Costs incurred by the Company from relocation,removal or
rearrangement of Gas Facilities that do not result in an improvement to the Facilities.
1.9. Notice. A writing served by a party or parties on another party or parties. Notice to Company
must be mailed to:
Reliant Energy Minnegasco
V.P.,Marketing&Customer Services
800 LaSalle Avenue
Minneapolis,MN 55402
Notice to City must be mailed to:
City Clerk
City of Fridley
6431 University Avenue N.E.
Fridley,MN 55432-4383
Either party may change its respective address for the purpose of this Ordinance by written notice
to the other party.
Ordinance No. 1124
Page 2
1.10. Public Way. Any street,alley or other public right-of-way within the City.
1.11. Public Ground. Land owned or otherwise controlled by the City for parks,open space or
similar public purpose.
SECTION 2. FRANCHISE.
2.1 Grant of Franchise. The City grants the Company,for a period of[twenty(20)years] from the
Effective Date,the right to import,manufacture,transport,distribute and sell Gas for public and
private use within and through the limits of the City. This right includes the provision of Gas that
is(i)manufactured by the Company or its affiliates and delivered by the Company,(ii)purchased
and delivered by the Company or(iii)purchased from another source by the retail customer and
delivered by the Company. For these purposes,the Company may construct,operate,repair and
maintain Gas Facilities in,on,over,under and across the Public Way and Public Ground subject
to the provisions of this ordinance. The Company may do all things reasonably necessary or
customary to accomplish these purposes, subject to other applicable ordinances,permit
requirements and to further provisions of this ordinance.
2.2 Effective Date. This franchise is effective from and after its acceptance by the Company.
Written acceptance or rejection of franchise by the Company must be filed with the City Clerk
within sixty(60)days after publication of this ordinance. If the Company fails to respond in
writing within the above stated time,the franchise will be considered approved by both parties.
2.3 Non-exclusive Franchise. This ordinance does not grant an exclusive franchise.
2.4 Publication Expense. The expense of publication of this ordinance must be paid by the
Company.
2.5 Default and Dispute Resolution. If the City or Company asserts that the other party is in default
in the performance of any obligation hereunder,the complaining party must notify the other party
in writing of the default and the desired remedy. Representatives of the parties must promptly
meet and attempt in good faith to negotiate a resolution of the dispute.If the dispute is not
resolved within thirty(30)days after service of the notice,the parties may jointly select a
mediator to facilitate further discussion. The parties will equally share the fees and expenses of
the mediator. If a mediator is not used or if the parties are unable to resolve the dispute within
thirty(30)days after first meeting with the mediator,either party may commence an action in
District Court to interpret and enforce this franchise or for such other relief as may be permitted
by law or equity.
2.6 Continuation of Franchise. If this franchise expires and the City and the Company are unable to
agree on the terms of a new franchise,the existing franchise and associated franchise fees
imposed on the Company by separate ordinance as described in Section 7 of this Ordinance,will
remain in effect until a new franchise is agreed upon,or until 90 days after the City or the
Company serves written Notice to the other party of their intention to allow the franchise
agreement to expire.
SECTION 3. CONDITIONS OF USE.
3.1 Location of Facilities. Gas Facilities must be located, constructed,installed and maintained so
as not to interfere with the existing City Utility System or the safety and convenience of ordinary
travel along and over Public Ways. Gas Facilities may be located on Public Grounds as
determined by the City. The Company's construction,reconstruction,operation,repair,
maintenance and location of Gas Facilities is subject to other ordinances and regulation of the
Ordinance No. 1124
Page 3
City,with the requirements of such being no more restrictive than those applicable to other
energy suppliers requiring the use of the Public Way.
3.2 Field Location. Upon request by the City,the company must provide field locations for any of
its Gas Facilities within the period of time required by Minnesota State Statute 216D.
3.3 Permit Required. The Company may not open or disturb the surface of any Public Way or
Public Ground without first having obtained a permit from the City,if required by a separate
ordinance, for which the City may impose a reasonable fee. The permit conditions imposed on
the Company may not be more burdensome than those imposed on other utilities for similar
facilities or work. The Company may,however open and disturb the surface of any Pubic Way or
Public Ground without a permit if(i)an emergency exists requiring the immediate repair of Gas
Facilities and(ii)the Company gives notice to the city before,if possible,commencement of the
emergency repair. Within two business days after commencing the repair,the Company must
apply for any required permits and pay the required fees.
3.4 Restoration. After completing work requiring the opening of a Public Way or Public Ground,
the Company must restore the same,including paving and its foundation,to the condition
formerly existing and maintain the paved surfaces in good condition for two years thereafter. The
work must be completed as promptly as weather permits. If the Company does not promptly
perform and complete the work,remove all dirt,rubbish,equipment and material,and restore the
Public Way or Public Ground,the City may,after demand to the Company to cure and the
passage of a reasonable period of time not less than five calendar days following the demand,
make the restoration at the expense of the Company. The Company must pay to the City the cost
of such work done for or performed by the City,including administrative expense and overhead,
plus ten percent of cost and administrative expense. This remedy is in addition to any other
remedies available to the City for noncompliance with this section. Given the remedy outlined in
this section 3.4 available to the City for noncompliance by the Company,the City hereby waives
any requirement for the Company to post a construction performance bond,certificate of
insurance, letter of credit or any other form of security or assurance that may be required,under
separate existing or future ordinance of the City.
3.5 Company Protection of Gas Facilities in Public Ways. The Company must take reasonable
measures to prevent the Gas Facilities from causing damage to persons or property. The
Company must take reasonable measures to protect the Gas Facilities from damage that could be
inflicted on the Facilities by persons,property or the elements.The Company and the City will
comply with all applicable laws and codes when performing work near the Gas Facilities.
3.6 Notice of Improvements. The City must give the Company reasonable notice of plans for
improvements to Public Ways or Public Ground. The notice must contain; (i) the nature and
character of the improvements,(ii)the Public Ways or Public Grounds upon which the
improvements are to be made, (iii)the extent of the improvements,(iv)the time when the City
will start the work,and, (v)if more than one Public Way or Public Ground is involved,the order
in which the work is to proceed. The notice must be given to the Company a sufficient length of
time in advance of the actual commencement of the work to permit the Company to make any
necessary additions,alterations,or repairs to its Gas Facilities. If streets are at fmal width and
grade and the City has installed underground sewer and water mains and service connections to
the property line abutting the streets prior to a permanent paving or resurfacing of such streets,
and the Company's main is located under such street,the City may require the Company to install
gas service connections prior to such paving or resurfacing,if it is apparent that gas service will
be required during the five years following the paving or resurfacing.
Ordinance No. 1124
Page 4
SECTION 4.RELOCATIONS.
4.1 Relocation of Gas Facilities in Public Ways. If the City determines by the proper exercise of its
police power to vacate a Public Way for a City improvement project,or to grade,regrade or
change the alignment of any Public Way,or construct or reconstruct any City Utility System in
any Public Way,the City may order the Company to relocate its Gas Facilities at the Company's
expense. The City must give the Company sufficient notice of plans to vacate for a City
improvement project,or to grade,re-grade,or change the alignment of any Public Way or to
construct or reconstruct any City Utility System. If a relocation is ordered within five(5)years of
a prior relocation of the same Gas Facilities,which was made at Company expense,the City will
reimburse the company on a time and material basis for Non-Betterment Costs. If any subsequent
relocation is required because of the extension of a City Utility System to a previously unserved
area,the City may require the Company to make the subsequent relocation at the Company's
expense. Nothing in this ordinance requires the Company to relocate,remove,replace or
reconnect its Facilities at the Company's expense where such relocation,removal,replacement or
reconstruction is solely for the convenience of the City and is not reasonably necessary for the
construction or reconstruction of a Public Way or City Utility System or other City improvement.
The City will not require the removal of abandoned natural gas facilities,unless these facilities
are in direct conflict with a Public Way grade change or proposed City Utility System or City
improvement. The provisions of this section 4.1 apply only to Gas Facilities constructed in
reliance on this franchise and the Company does not waive its rights under an easement in the
Public Way.
4.2 Relocation of Gas Facilities in Public Ground. The City may,by the proper exercise of its
police power,require the Company to relocate the Gas Facilities within or remove the Gas
Facilities from Public Ground,upon a finding by City that the Gas Facilities have become or will
become a substantial impairment of the public use or enjoyment to which the Public Ground is or
will be put. The relocation or removal will be at the Company's expense. The provisions of this
Section 4.2 apply only to Gas Facilities constructed in reliance on this franchise and the Company
does not waive its rights under an easement or prescriptive right in the Public Ground. The City
will not require the removal of abandoned natural Gas Facilities in Public Ground,unless these
facilities have become or will become a substantial impairment of the public use or enjoyment to
which the Public Ground is or will be put.
4.3 Vacation of Public Ways. The City must give the Company at least three-weeks'Notice of the
proposed vacation of a Public Way. Except where required for a City street or other
improvement project or as otherwise provided in Section 4.1,the Vacation of a Public Way,after
the installation of Gas Facilities,does not deprive the Company of its rights to operate and
maintain the Gas Facilities until the reasonable cost of relocating the same and the loss and
expense resulting from such relocation are first paid to the Company by the City. If the vacation
of Public Way does not require the relocation of existing Gas Facilities,the City shall reserve a
utility easement to the Company,created by and within the document establishing the vacation,or
the City will preserve a right-of-way in the manner permitted by law.
4.4 Projects with Federal Funding. Relocation,removal or rearrangement of any Gas Facilities
made necessary because of the extension into or through the City of a federally-aided highway
project shall be governed by the provisions of Minnesota Statutes, Section 161.46.
SECTION 5. DEFENSE AND INDEMNIFICATION.
5.1 Terms.The Company shall indemnify,keep and hold the City,its elected officials,officers,
employees, and agents free and harmless from any and all claims and actions on account of injury
or death of persons or damage to property occasioned by the construction,maintenance,repair or
removal of Gas Facilities on or across the Public Way and the Public Ground of the City,unless
Ordinance No. 1124
Page 5
such injury or damage is the result of negligence of the City,its elected officials,employees,
officers,or agents.The City shall not be entitled to reimbursement for its costs incurred prior to
notification to the Company of claims or actions and a reasonable opportunity for the Company to
accept and undertake the defense.
5.2 Litigation. If such a suit is brought against the City under circumstances where the agreement in
this Section 5 to indemnify applies,the Company at its sole cost and expense will defend the City
in such suit if Notice thereof is promptly given to the Company within a reasonable period. If the
Company is required to indemnify and defend,it will thereafter have control of such litigation,
but the Company may not settle such litigation without the consent of the City,which consent
will not be unreasonably withheld. This section is not as to third parties a waiver of any defense
or immunity otherwise available to the City; and the Company,in defending any action on behalf
of the City is entitled to assert in any action every defense or immunity that the City could assert
in its own behalf.
SECTION 6. SUCCESSORS IN INTEREST.
6.1 Successors in Interest. This ordinance and the rights and obligations conferred hereby,is
binding on and inures to the benefit of the City and its successors and on the Company and its
successors and permitted assigns.
SECTION 7. FRANCHISE FEE.
7.1 Separate Ordinance. During the term of the franchise hereby granted, and in lieu of any permit,
licensing,or other fees,charges,or costs imposed on the Company for providing gas service or
performing work necessary to provide gas service in the City during the term of this franchise,the
City may impose on the Company a franchise fee.In addition to the franchise fee,the Company
shall be required to pay only such other fees, charges,costs or taxes which are generally required
to be paid by other businesses or persons in the city.The franchise fee must be imposed by a
separate ordinance adopted by the City Council,which ordinance may not be adopted until at
least 60 days after Notice enclosing such proposed ordinance has been served upon the Company
by certified mail.A fee imposed under this section does not become effective until 60 days after
Notice enclosing the adopted ordinance has been served upon the Company by certified mail.
7.2 Condition of Fee. The separate ordinance imposing the fee shall not be effective against the
Company unless it lawfully imposes a fee or tax of the same or greater equivalent amount on the
sale and/or delivery of energy within the City by any other energy supplier,provided that,as to
such supplier,the City has the authority to require a franchise fee or impose a tax. The Company
may petition the City to exempt the franchise fee applicable to customers who(i)physically
bypass or(ii) unequivocally document in writing their intention and ability to physically bypass
the Company's Gas Facilities for economic reasons,including the existence of a franchise fee.
The City shall not unreasonably withhold such exemption in franchise fees for such customers.
7.3 Calculation of Fee. The City may impose the franchise fee: (i)as a combination of percentage of
gross revenues received from customers in the Residential Customer Class for its utility
operations within the City and as a flat meter fee per customer, for customers in non-residential
customer classes,or(ii)as a flat meter fee per customer within the City,or (iii)as a fee based on
units of gas delivered to any class of retail customers within the corporate limits of the City. The
method of imposing the franchise fee described above:percent of revenue(i), flat fee(ii),or per
unit fee(iii),may differ for each customer class.If prior to the expiration of this ordinance,
customers in Minnegasco's Residential Customer Class begin to purchase and/or transport gas
from companies other than Minnegasco,the City may only impose the flat fee method(ii)or the
units of gas method(iii),as a way of collecting fees.If the percentage of gross revenue method(i)
has previously been implemented,it must be changed to method(ii)or method(iii).
Ordinance No. 1124
Page 6
7.4 Collection of the Fee. The franchise fee will be payable not less often than quarterly and based
on any of the alternative formulas described in Section 7.3 during complete billing months of the
period for which payment is to be made. The franchise fee formula may be changed by ordinance
from time to time;however,each change must meet the same notice requirements and may not be
made more often than annually. The fee may not exceed any amount that the Company may
legally charge to its customers,prior to payment to the City,by imposing a surcharge equivalent
to such fee in its rates of gas service. The Company may pay the City the fee based upon the
surcharge billed, subject to subsequent reductions for uncollectibles or customer refunds.The
Company agrees to make available for inspection by the City at reasonable times all records
necessary to audit the Company's determination of the franchise fee payments.
SECTION 8. LIMITATION ON APPLICABILITY.
8.1 Limitation on Applicability. This Ordinance constitutes a franchise agreement between the City
and the Company. No provision of this franchise inures to the benefit of any third person,
including the public at large, so as to constitute any such person as a third-party beneficiary of the
agreement or of any one or more of the terms hereof,or otherwise give rise to any cause of action
for any person not a party hereto.
SECTION 9. PREVIOUS FRANCHISES SUPERSEDED.
9.1 Previous Franchise Superseded. This franchise supersedes and replaces previous franchises
granted to the Company or its predecessors.
SECTION 10.AMENDMENTS.
10.1 Amendments. This ordinance may be amended at any time by the City. An amendatory
ordinance becomes effective upon the filing of the Company's written consent thereto.
SECTION 11. CHANGE IN FORM OF GOVERNMENT.
11.1 Change in Government. Any change in the form of government of the City shall not affect the
validity of this Ordinance. Any governmental unit succeeding the City shall,without the consent
of Company,succeed to all of the rights and obligations of the City provided in this Ordinance.
SECTION 12. SEVERABILITY.
12.1 Severability. If any portion of this franchise is found unenforceable for any reason,the validity
of the remaining provisions will not be affected.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 10TH
DAY OF MAY, 1999.
CC a JP L -C 611 '
NASC/J.J∎I' SON-MAYOR
ATTE
DE RA A. SKOGEN— ITY CLERK
Public Hearing: April 12, 1999
First Reading: April 26, 1999
Second Reading: May 10, 1999
Publication: May 20, 1999