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HomeMy WebLinkAboutordinance.council.014-86 ORDINANCE NO. 14 (Series of 1986) AN ORDINANCE GRANTING A 20 YEAR FRANCHISE BY THE CITY OF ASPEN, COLORADO TO THE ROCKY MOUNTAIN NATURAL GAS COMPANY, INC., A COLORADO CORPORATION, ITS SUCCESSORS AND ASSIGNS, TO LOCATE, BUILD, CONSTRUCT, ACQUIRE, PURCHASE, EXTEND MAINTAIN AND OPERATE INTO, WITHIN AND THROUGH THE TOWN OF ASPEN, PITKIN COUNTY, COLORADO, A PLANT OR PLANTS, AND WORKS FOR THE PURCHASE, MANUFAC- TURE, TRANSMISSION AND DISTRIBUTION OF GAS, EITHER NATURAL, ARTIFICIAL OR MIXED, AND TO FURNISH, SELL, AND DISTRIBUTE SAID GAS TO THE CITY OF ASPEN, AND THE INHABITANTS THEREOF, FOR HEATING, COOKING, OR OTHER PURPOSES BY MEANS OF PIPES, MAINS, OR OTHERWIS- E, OVER, UNDER, ALONG, ACROSS AND THROUGH ANY AND ALL STREETS, OTHER PUBLIC WAYS AND PLACES IN SAID CITY OF ASPEN, AND FIXING THE TERMS AND CONDITIONS THEREOF; AND GRANTING A 20 YEAR LEASE TO ROCKY MOUNTAIN NATURAL GAS COMPANY, INC. LOCATED AT THE "MAROLT" CITY GATE STATION SITE. WHEREAS, in view of the fact its current franchise is about to expire the Rocky Mountain Natural Gas Company, Inc. has requested that its franchise to operate a natural gas utility in the City of Aspen be renewed for a 20 year term, on the terms and conditions set forth in this ordinance; and WHEREAS, pursuant to $11.4 of the City Charter no franchise shall be granted except upon the approval of a majority of electors voting thereon; and WHEREAS, the City Council deems the granting of a utility franchise to Rocky Mountain Natural Gas Company, Inc., on the terms and conditions as set forth herein, to be in the best interests of the City, its inhabitants and visitors, and desires to approve the franchise, subject to elector approval. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO; Section -1 1 Short title. This Ordinance shall be known and may be cited as the "Rocky Mountain Natural Gas Company Franchise Ordinance." Section 2 Definitions. For the purpose of this Ordinance, the following terms shall have the meaning given herein: "City" is the City of Aspen, Pitkin County, Colorado, the grantor of rights under this franchise acting by and through its duly authorized representatives. "Company" is the Rocky Mountain Natural Gas Company, Inc., the grantee of rights under this franchise. "Council" is the City Council of the City of Aspen, Colorado. "Person" is any person, firm, partnership, association, corporation, company or organization of any kind. Section'-3 Grant of Authority. There is hereby granted to the Company the right, privilege and authority to locate, build, construct, acquire, purchase, extend, maintain and operate into, within and through said City a plant or plants and works, for the purchase, manufacture, transmission and distribution of gas, either natural, artificial or mixed, with the right and privilege for the period and upon the terms and conditions hereinafter specified to furnish, sell and distribute gas to the City, and the inhabitants thereof, for heating, cooking or other purposes, by means of pipes, mains, or otherwise, over, under, along, across and through any and all streets, alleys, viaducts, bridges, roads, lanes and other public ways and places as may be hereafter laid 2 out, opened, located or constructed within the territory now or hereafter included in the boundaries of said City; provided, however, the Company shall have no right to construct any building, well or manufacturing facility upon any such street, gas easement or other public property. Sectio~ 4 The Company is further granted the right, privilege and authority to excavate in, occupy and use any and all streets, alleys, viaducts, bridges, roads, lanes, parkways, and other public ways and places under the supervision of the properly constituted authority for the purpose of bringing gas into, within and through the City, and supplying gas to said City and the inhabitants thereof and in the territory adjacent thereto, provided, however, that the Company shall locate its plants, works, transmission and distribution structures, equipment, mains, and pipes within said City in a manner to meet with the approval of the City and further in locating said facilities shall do so in such manner as to cause minimum interference with the rights or reasonable convenience of property owners whose property adjoins any of the said streets, alleys, or other public ways and places. Should it become necessary for the Company, in exercising its rights and performing its duties hereunder, to interfere with and sidewalk, graveled or paved streets, roads or alleys, or any other public or private improvement, the Company shall repair at its own expense in a workmanlike manner subject to the approval by the City, Such sidewalk, graveled or paved 3 street, road, alley, or other improvement after the installation of its pipes or other structures. The Company shall use due care not to interfere with or damage any water mains, sewers, utility appurtenances, or other structures now in place or which may hereafter be placed in said streets, alleys, or other public places, and said Company shall, at its own expense, repair in a workmanlike manner subject to the approval of the City, any of such water mains, sewers, utility appurtenances, or other structures which are damaged through the action of the Company, provided, however, that the City may make such repairs and charge the reasonable cost thereof to the Company. This grant of authority shall apply to all streets and alleys presently platted or otherwise of record, all gas easements presently owned by or dedicated to the City or the public within the City limits, and to other property presently onwed by the City within the City limits, and to other property presently owned by the City within the city limits, and to future streets, alleys, gas easements and other property later acquired by or dedicated top the City and located within the City limits. The Company shall be responsible to remedy any defects in repair work done by the Company for a period of two years after completion. The City shall have the right to inspect and supervise any work on City property and improvements. Section-5 The Company shall so maintain its structures, apparatus, mains, pipe and other equipment as to afford all reasonable 4 protection against injury or damage to persons or property therefrom, and the Company shall save, defend and hold harmless and indemnify the City from and against all liability or damage and all reasonable expenses necessarily accruing against the City arising out of the exercise by the Company of the rights and privileges hereby granted. Provided that the Company shall have had notice of the pendency of any action against the City arising out of such exercise by the Company of said rights and privileges and be permitted, at its own expense, to appear and defend or assist in the defense of the same. Further provided, however, that nothing herein shall relieve the City of the responsibility of all claims and liability for damage to property or injury or death of any person or persons resulting from the negligent acts or omissions of the City, their agents or employees. And as a condition to the franchise rights granted hereby the Company shall maintain public liability insurance in an amount not less than $500,000, with an umbrella for not less than $1,000,000 and furnish a certificate to the City so showing, shall furnish 60 days notice of cancellation and notice of nonrenewal if such notice has been provided by the insurance carrier. In all events the Company shall provide the City written notice within 10 days of the Company's receipt of any such cancellation or notice of non-renewal. Without warranting the continuing ability of the Company to continue to obtain the same limits, the Company's public liability insurance is carried, as of the date of this franchise ordinance, in the amount of $10,000,000. The Company 5 shall use its best efforts to maintain insurance coverage at or above those limits Section 6 If at any time it shall be necessary to change the position of any gas main or service connection of the company to permit the City to lay, make or change street grades, pavements, sewers, water mains or other City works, such changes shall be made by the Company at its own expense. Section ~ Service Standards. The Company shall maintain and operate its plants and system and render efficient service in accordance with the rules and regulations of the Public Utilities Commission of the State of Colorado and the terms and conditions of this Ordinance, including specifically, but without limitation, the following requirements: a. Heating Value. Gas sold, supplied, and delivered under this franchise shall be maintained at a monthly average of not less than 950 British Thermal Units of heat value per cubic foot. A cubic foot of gas means that the amount of gas which when saturated with water vapor at a temperature of sixty degrees (60) Fahrenheit and subject to an absolute pressure equal to thirty inches (30") of mercury, at thirty-two degrees (32) fahrenheit (14.73 pounds per square inch) occupies a volume of one cubic foot. Gas sold under this franchise shall be accurately measured utilizing metering equipment of a type approved by the Public Utilities Commission of the State of Colorado, which shall 6 also be subject to approval of the City. The Company shall provide the City with copies of calorimeter and pressure reports on request. b. Natural Gas. Natural gas shall be furnished to the City in its natural gas state as it is produced at the wells, without dilution, except that the Company shall remove such noxious gases therefrom and add such odorizing agent as may be required by law or regulations of proper authorities. c. Expense of Adjustment. If, after natural gas has been made available, it should later be necessary to revert to manufa- ctured, artificial or other suitable, or mixed gas, the Company shall defray all necessary expenses incident to the adjustment of domestic, commercial and governmental appliances, including the changing or redrilling of orifices and burners. d. Maintenance of System. The Company shall maintain its gas plant equipment and distribution system in good condition and repairs at all times. e. Maps. The Company shall prepare and submit to the Council a map showing the location of its distribution system, showing location, size and depth of lines, locations of shutoff valves and gates, and all appurtenances incident to the distribution system, so far as such facilities can reasonably be projected. The map shall be kept current by addition to the information hereby required as the system is extended or revised. If the Company fails to keep such map current and provide the required information, he City can cause such work to be done, and charge all cost thereof to the Company. f. The Company shall make adequate provision for providing service to customers, and it shall be the responsibility of the Company as provided under Section 13 hereunder, to extend gas lines to the property lines of customers who have ordered gas. Sect ion If during the term of this franchise there occurs a failure or partial failure of the supply of natural gas available to the Company because of depletion of such supply, the Company shall take all reasonable steps to obtain an additional natural gas supply from other sources to be delivered to the Company, and if unable to procure same, it is hereby authorized to supply artificial or mixed gas for he unexpired term of this franchise. If the Company, within a reasonable period after failure of the supply of natural gas, shall fail to supply to its customers artificial and/or mixed gas, the franchise rights granted herein shall terminate. Section 10 The Company shall furnish gas within the corporate limits of the City or an addition thereto, to the City and to the inhabitants thereof, and to any person or persons or corporation doing business in the City, or any addition thereto at the rates and under the terms and conditions set forth in the Rate Schedules, Standards for Service, Rules and Regulations, And Service Connection and Extension Policies, filed with or fixed by the Public Utilities Commission of the State of Colorado, or by any other authority 8 having jurisdiction in the premises. Section-il The Company will not, as to rates, charges, services, facilities, rules, regulations or in any other respect, make or grant any preference or advantage to any corporation or person or subject any corporation or person to any prejudice or disadvantage, provided that nothing in this grant shall be taken to prohibit the establishment from time to time of a graduated scale of charges and classified rate schedules to which any customer coming within any established classification would be entitled. Section 12 The rates to be charged by said Company for industrial gas used in said City may be lower and different from those charged for gas used for other purposes, provided that contracts for industrial gas contain a "cut-off" clause which recognizes the preferred right of the other uses over industrial uses. SectioD-13 The Company shall, from time to time during the term of this franchise, make such enlargement and extensions of its distribution system as the business of the Company and the growth of the City justify, in accordance with it standards for service, Rules and Regulations, and Service Connection and Extension Policies for gas service concurrently in effect and on file with the Public Utilities Commission of the State of Colorado or other competent authority having jurisdiction in the premises. SectioD-14 The Company, from time to time, may promulgate such rules, regulations, terms and conditions governing the conduct of its business, including the utilization of gas and payment therefor, and the interference with, or alteration of any of the Company's property upon the premises of its customers, as shall be necessary to insure a continuous and uninterrupted service to each and all of its customers and proper measurement thereof and payment therefor, provided that the Company shall keep on file in the office of the City Clerk of the City and its office in Denver, Colorado, available to the public, copies of its Rate Schedules, Standards for Service, Rules and Regulations, and Service Connection and Extension Policies concurrently in effect and as filed with the Public Utilities Commission of the state of Colorado or other competent authority having jurisdiction in the premises. The City shall have access at all reasonable times to all company records, reports and plans. Section 15 As a further consideration for this franchise and accepted by the City in lieu of all occupation and license taxes and all other special taxes, assessments or excises upon the pipes, mains, meters, or other property of the Company, or other levies that might be imposed, either as an occupation tax, license tax, permit fee, charge, or for the inspection of pipes, mains, meters, or other property of the Company, or otherwise, the Company shall pay to the City a sum equal to two percent (2%) of its annual gross revenue derived from the sale of gas within the 10 corporate limits of the City, including the revenue received from the sale of industrial gas, and excluding the amount received from the City itself for gas service furnished it and after adjustment for the net write-off of uncollectable amounts and corrections of bills theretofore rendered. Payments of the franchise charge shall be made on or before the first day of March of each year for the calendar year next previous. For the purpose of ascertaining or auditing the correct amount to be paid under the provisions of this paragraph, the City Clerk and/or any committee appointed by the Council shall have access to the books of said Company for the purpose of checking the gross income received from operations within said City. It is understood that payment of such franchise charge does not excuse the company from payment of either sales or use to time, or from obtaining an excavation permit, at no charge to the Company, if required by City regulations. Sectioni 16 That there has heretofore been in effect for 25 years a franchise to Rocky Mountain Natural Gas Company, Inc., and that, therefore, during the term of the instant franchise the City shall have the right, option and privilege of purchasing the Company's entire plant and distribution system operating in said City for a purchase price representing the fair market value of the system (the entire system shall include all additions and extensions to the original system). If the parties are not able to agree to the fair market value, such value shall be determined through binding 11 arbitration. In case of such arbitration, each party shall choose one arbitrator, and the two arbitrators so chosen shall choose a third arbitrator, who shall be chairman of the arbitr- ation panel. The costs of arbitration shall be divided equally between the parties. The Company and the City agree to negotiate means to limit severance damages, including acquisition of system and customers outside the City by the City as reasonable. Section ~17 The purchase price of the system herein set forth is a method of acquisition of the system by the City, which is altern- ative to any other lawful means of acquiring title to the system by the City, and said right and privilege of purchasing Company's entire system shall be in addition to all of the rights and privileges granted and reserved to the City by the laws of the State of Colorado in all matters relating to franchises. The council may authorize the acquisition of such property outside the City limits by condemnation or otherwise, as granted by the Colorado constitution regardless of whether the system within the City is acquired pursuant to this Section by condemnation or otherwise. In the event the City acquires the distribution system, the Company shall sell the City gas for resale upon terms as may be agreed to. Section 18 This Ordinance shall be in full force and effect from and after its passage, voter approval and publication, as by law required, upon acceptance thereof in writing by the Company, 12 within thirty (30) days after final passage, and the terms, conditions and covenants hereof shall remain in full force and effect for a period of twenty (20) years from and after the effective date following final passage. Sectional9 Upon the expiration of this franchise, if the Company shall not have acquired an extension or renewal thereof and accept same, it may have, and it is hereby granted the right to enter upon the streets, alleys, bridges, viaducts, roads, lanes and other public places of the City, for the purpose of removing therefrom any or all of its plants, structures, pipes, mains, or equipment pertaining thereto, at any time after the City has had resonable time and opportunity to purchase, condemn or replace them. In so removing said pipes, mains or other property, the Company shall, at its own expense, and in a workmanlike manner, refill any excavations that shall be made by it in the graveled or paved streets, alleys, bridges, viaducts, roads, lanes and other public places after the removal of its mains, pipes, or other structures. Section 20 Rates. Rates charged by the Company for service hereunder shall be fair and reasonable and designed to meet all necessary costs of service, including a fair rate or return on the net valuation of its properties devoted thereto, under efficient and economical management. The Company agrees that it shall be subject to all authority now or hereafter possessed by any regulatory body having jurisdiction to fix just, reasonable, and 13 compensatory gas rates. The Company further agrees that the system shall be so designed, constructed and sources of gas utilized as to provide the most economic development and favorable rate structure possible, taking into account deliverability of gas, reserves and other pertinent conditions. S~ctiun- Assignment. The Company shall not assign this franchise, or the rights granted hereunder, without first obtaining approval of the voters of the City. Provided, however, that this condition shall not be construed to restrict or prevent the issuance of bonds, debentures or other evidence of indebtedness, or the issue of additional stock, needed or useful for the purpose of financing the system or any portion thereof. Sect ~on-9_2 Forfeiture. The City reserves the right to declare a forfeiture of this franchise for the breach of a substantial and material provision thereof. No forfeiture shall be declared until the Company shall have had an opportunity, after resonable notice, to be heard and to correct the alleged breach. Upon failure of the Company to exercise reasonable diligence to correct such condition, the City may declare this franchise forfeited. In the event that this franchise is forfeited, then the Company agrees to continue to render service as thertofore, for the period of six (6) months to give the City time to decide upon its course of action. Section 23 14 Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portion thereof. Section 24 Reserved Rights. The right is hereby reserved by the City to adopt, from time to time, in addition to the provisions herein contained, such ordinances as may be deemed necessary in the exercise of its police power, provided that such regulations shall be reasonable and not destructive to the right herein granted, and not in conflict with the laws of the State of Colorado, or with orders of other authorities having jurisdiction in the premises, except as permitted in the exercise of the City's "home rule" powers granted by Article XX of the Colorado Constitution. This franchise shall be subject to all valid and effective provision of the City Charter whether enumerated herein or not. Section-25 Lease of City Gate Property. Concurrent with the grant of this Franchise by the City to the Company, the City shall execute, on terms and conditions acceptable to the City, a surface lease for a term of twenty years for the placement of the Company's city gate station (the "Marolt" property) 15 PASSED on first reading this ,~ . ._day of William Stifling, ~a¥or ATTEST: Kathryn Ko~,-CitY Clerk ROCKY MOUNTAIN NATURAL GAS DIVISION OF K N ENERGY, INC~, successor to ROCKY~O~NTA~_ATORA~' C~S,.CqMpA~y, \~Nq. Executive Vice- P~;sideS~ ~ ~ ATTEST: Ass ' t. Secretary 16