O700 Public Right-of-Way for Atmos, granting a franchise agreementORDINANCE NO. 700
AN ORDINANCE GRANTING TO ATMOS ENERGY CORPORATION,
A TEXAS AND VIRGINIA CORPORATION, ITS SUCCESSORS AND
ASSIGNS, A FRANCHISE TO CONSTRUCT, MAINTAIN, AND
OPERATE PIPELINES AND EQUIPMENT IN THE CITY OF
KENNEDALE, TARRANT COUNTY, TEXAS, FOR THE
TRANSPORTATION, DELIVERY, SALE, AND DISTRIBUTION OF GAS
IN, OUT OF, AND THROUGH SAID CITY; PROVIDING FOR THE
PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE PUBLIC
RIGHTS -OF -WAY; AND PROVIDING THAT SUCH FEE SHALL BE IN
LIEU OF CERTAIN OTHER FEES AND CHARGES.
WHEREAS, Atmos Energy Corporation ("Grantee") is engaged in the business of
providing gas utility service within the City of Kennedale, Texas, and is using the Public
Rights -of -Way for that purpose under the terms of an ordinance granting a franchise
agreement and ordinance heretofore duly passed by the governing body of the City;
and
WHEREAS, the franchise expired on December 31, 2017, and the City and
Grantee desire to enter into a new franchise agreement.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF KENNEDALE, TEXAS, THAT:
SECTION 1. GRANT OF AUTHORITY.
(A) That City hereby grants to Grantee consent to use and occupy, subject to
the terms hereof, the Public Rights -of -Way, for the purpose of laying, maintaining,
constructing, protecting, operating, and replacing therein and thereon pipelines and all
other appurtenant equipment to deliver, transport and distribute gas in, out of, and
through City for persons, firms, and corporations, including all the general public, and to
sell Gas to persons, firms, and corporations, including all the general public, within City
corporate limits, as such limits may be amended from time to time during the term of
this Franchise.
(B) The provisions set forth in this Franchise represent the terms and
conditions under which Grantee shall construct, operate, and maintain its System
facilities within City. Grantee, by its acceptance of this Franchise, agrees that all such
lawful regulatory powers and rights as the same may be from time to time vested in City
shall be in full force and effect and subject to the exercise thereof by City at any time.
(C) This Franchise does not grant to Grantee the right, privilege or authority
to engage in any other activities within City other than those set forth in Section 1(A).
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0700 CITY OF KENNEDALE, TX 2020
SECTION 2. DEFINITIONS.
For the purpose of this Franchise, the following words and phrases shall have
meaning given in this section. When not inconsistent with the context, words used in the
present tense include future tense, words in the plural number include the singular
number, and words in the singular number include the plural number. The word "shall"
is mandatory and "may" is permissive. Words not defined in this section shall be given
their common and ordinary meaning.
"Affiliate" means any entity controlling, controlled by or under common control
with the entity in question. As used in this definition, the term "control" means, with
respect to an entity that is a corporation, the ownership, directly or indirectly, of more
than fifty percent (50%) of the voting securities of such entity or, with respect to an
entity that is not a corporation, the power to direct the management or policies of such
entity, whether by operation of law, by contract or otherwise.
"City" means the municipal corporation designated as the City of Kennedale and
includes the territory as currently is or may in the future be included within the
boundaries of City, with its principal office at 405 Municipal Drive, Kennedale, Texas
76060.
"Franchise" or "Agreement" means the rights and obligations of City and Grantee
set forth in this ordinance, as the same may be amended from time to time, and
includes those rights and duties provided under the laws of Texas and of the United
States.
"Gas" means such gaseous fuels as natural, artificial, synthetic, liquefied natural
gas, liquefied petroleum, manufactured, or any mixture thereof.
"Grantee" means Atmos Energy Corporation, but does not include its affiliates,
subsidiaries or any other entity in which it has an ownership interest, with its principal
office at 5430 LBJ Freeway, Dallas, Texas 75240.
"Gross Revenues" means:
(A) all revenues received by Grantee from the sale of gas to all classes of
customers (excluding Gas sold to another gas utility in City for resale of Gas to its
customers within City) within City;
(B) all revenues received by the Grantee from the transportation of Gas
through the pipeline system of Grantee within City to customers located within City
(excluding any Gas transported to another gas utility in City for the sale of Gas to its
customers within City);
(C) the value of Gas transported by Grantee for transport customers through
the System of Grantee within City ("Third Party Sales"), (excluding the value of any Gas
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0700 CITY OF KENNEDALE, TX 2020
transported to another gas utility in City which has executed a franchise agreement with
City for the sale of Gas to its customers within City), with the value of such Gas to be
established by utilizing Grantee's monthly weighted average cost of Gas charged to
industrial customers in the Mid -Tex division, as reasonably as is possible near the time
as the transportation service is performed; and
(D) "Gross Revenues" shall also include:
(1) fees collected pursuant to this Agreement;
(2) revenues billed but not ultimately collected or received by the
Grantee;
(3) State gross receipts fees; and
(4) the following "miscellaneous charges":
(a) charges to connect, disconnect, or reconnect Gas within the
City;
(b) charges to handle returned checks from consumers within the
City; and
(c) contributions in aid of construction ("CIAC").
(E) "Gross Revenues" shall not include:
(1) the revenue of any affiliate or subsidiary of Grantee;
(2) sales tax paid to City;
(3) interest or investment income earned by Grantee; and
(4) monies received from the lease or sale of real or personal property,
provided, however, that this exclusion does not apply to the lease
of facilities within the Public Rights -of -Way.
"Public Rights -of -Way" means the public streets, medians, boulevards, roads,
lanes, alleys, highways, public utility easements, viaducts, and bridges across water
ways and other public places that are deeded or dedicated to City and are available for
Grantee's use.
"Railroad Commission" means the Railroad Commission of the State of Texas or
other authority succeeding to the regulatory powers of the Railroad Commission.
"Residents" means all persons, businesses, industry, governmental agencies,
and any other entity whatsoever, located, in whole or part, within City that are or may be
served by Grantee hereunder.
"System" and/ or "System facilities" means all of Grantee's pipes, pipelines, Gas
mains, laterals, feeders, regulators, meters, fixtures, connections or other appurtenant
equipment used in or incident to providing delivery, transportation, distribution, and
sales of natural Gas for heating, lighting and power.
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0700 CITY OF KENNEDALE, TX 2020
SECTION 3. USE OF RIGHT-OF-WAY.
(A) The grant to Grantee in Section 1 is subject to the terms and conditions
contained herein, the Texas Constitution, City's Charter and ordinances, all as
amended, and subject to applicable and controlling local, state, and federal laws,
including the rules and regulations of any and all agencies thereof, whether presently in
force or whether enacted or adopted at any time in the future. This Franchise
Agreement shall in no way affect or impair the rights, obligations, or remedies of the
parties under the Texas Public Utility Regulatory Act, other state or federal law, or the
Texas Constitution. Nothing herein shall be deemed a waiver, release or relinquishment
of either party's right to contest, appeal, or file suit with respect to any action or decision
of the other party, including ordinances adopted by City, that Grantee believes is in
violation of any federal, state, or local law or regulation.
(B) All construction and work done by Grantee, and the operation of its
business, under and by virtue of this Franchise, shall be in conformance with the
applicable ordinances, rules and regulations now in force and generally applicable
ordinances not in conflict with this Franchise that may hereafter be adopted by City,
relating to the use of the Public Right -of -Way.
(C) Grantee shall provide reasonable notice to City of planned work within the
Public Right -of -Way and shall, except in cases of emergency conditions, obtain a permit
if required by City's ordinances before commencing work. If so required, Grantee shall
comply with permitting requirements that do not conflict with this Ordinance; provided
however Grantee or contractors working on behalf of Grantee shall not be required to
pay fees related to its use of the Public Right- of -Way other than in accordance with
Section 7 hereof.
(D) The location of all pipes, mains, laterals, and other equipment shall be
subject to approval by the City Manager or designee prior to construction; provided
however, said approval shall not be unreasonably withheld. In the event of a conflict
between the location of the System facilities of Grantee and the location of the facilities
of City or other utility franchisees within the Public Rights -of -Way that cannot be
resolved, the City Manager or designee shall resolve the conflict and determine the
location of the respective facilities. Grantee shall not interfere with power, telephone,
cable, or water facilities, sanitary or storm sewer facilities, or other municipal or public
use of the Public Right -of -Way. Grantee has the right to request City Council review of
any actions concerning Grantee's use of the Public Right -of -Way. City shall provide
Grantee with its annual capital improvements plan as well as any updates or changes
as soon as the plan, update, or change becomes available. City shall notify Grantee as
soon as reasonably possible of any projects that will affect Grantee's System facilities
located in the Public Rights -of -Way.
(E) The Grantee shall construct, maintain, and operate its System facilities in
a manner which provides reasonable protection against injury or damage to persons or
property.
(F) When Grantee is required by City to remove or relocate its mains, laterals,
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0700 CITY OF KENNEDALE, TX 2020
and other System facilities to accommodate construction of streets and alleys by City,
and Grantee is eligible under federal, state, county, City or other local agencies or
programs for reimbursement of costs and expenses incurred by Grantee as a result of
such removal or relocation, and such reimbursement is required to be handled through
City, City shall include Grantee costs and expenses in an application by City for
reimbursement only when City applies for a grant or program where the eligible
relocation costs are delineated separately such that City has constructive notice that
Grantee relocation costs are eligible for reimbursement and only if Grantee submits a
request together with its cost and expense documentation to City a reasonable time
prior to the filing of the application. City shall provide reasonable notice to Grantee of
the deadline for Grantee to submit documentation of the costs and expenses of such
relocation to City. In the event that City receives only a portion of any reimbursement
costs sought and the reimbursement received is not delineated separately such that
Grantee's eligible relocation costs are clearly noted, City will reimburse Grantee only
after City's costs have been paid in full. When Grantee is required to remove or relocate
any System facility without reimbursement, Grantee shall have the right to seek
recovery of relocation costs as provided for in applicable state and/or federal law.
Nothing herein shall be construed to prohibit, alter, or modify in any way the right of
Grantee to seek or recover a surcharge from customers for the cost of relocation
pursuant to applicable state and/or federal law. City shall not oppose recovery of
relocation costs when Grantee is required by City to perform relocation. City shall not
require that Grantee document request for reimbursement as a pre -condition to
recovery of such relocation costs. Upon receipt of reimbursement from an agency or
program as outlined above, City shall remit to the Grantee, within thirty (30) days of
receipt, its portion related to the relocation or removal of its System facilities, only if the
reimbursement received delineates separately Grantee's eligible relocation costs or
City's costs have been paid in full. Notwithstanding the foregoing, City shall not be
responsible for reimbursement of any relocation costs if Grantee secures or is eligible to
secure reimbursement of eligible costs from any other source other than through a
statutory rate mechanism or other rate mechanism adopted by City. This paragraph
applies exclusively to the Grantee's recovery of its relocation costs and, except as
provided in Section 7(1), nothing herein shall prohibit City from denying or opposing a
request by Grantee to increase or modify its other rates, charges, fees, or tariffs.
(G) City may request Grantee to relocate any part of its System facilities
installed or maintained in the Public Right -of -Way to accommodate construction or
improvement of a highway, road, street, public way, or other public work procured by
City which is not undertaken primarily for beautification or to accommodate a private
developer. Grantee and City agree that a project is not undertaken primarily for
beautification, unless more than fifty percent (50%) of the project costs are allocated to
costs unassociated with those required to meet City standards for highway, road, street,
public way, or other public work including costs associated with water, sewer, drainage,
paving and subgrade, curb and gutter, and sidewalk construction. Grantee shall be
responsible for bearing the costs of such relocation to the extent that proposed City
facilities are determined to be in conflict with Grantee's existing System facilities and as
permitted by local, state or federal law. Such relocation shall be made by the Grantee
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0700 CITY OF KENNEDALE, TX 2020
within a reasonable period of time not to exceed sixty (60) days after notice of request
from City unless otherwise specifically agreed to by the City or unless Grantee certifies
to City in writing that no conflict exists between its System facilities and the proposed
City facilities. Should Grantee submit evidence that it is unable to complete the
relocation within said time due to no fault of Grantee, the City Manager or designee may
agree with Grantee to extend such time. Grantee shall not be required to relocate
System facilities to a depth of greater than four (4) feet unless prior agreement is
obtained from Grantee. City and Grantee shall collaborate on designs where there is
the potential need for System facilities to be relocated to a depth of greater than four (4)
feet. Should Grantee have concerns regarding whether the requested placement of
System facilities is unsafe or inconsistent with the Gas distribution industry standard
safe operating practices, Grantee shall provide City with information detailing and
substantiating such concerns and work with City on a solution acceptable to both
parties. Should Grantee certify that no conflict exists and it is later determined that
Grantee's System facilities conflict with proposed City facilities resulting in a delay in the
construction of City facilities, Grantee shall reimburse City for all expenses incurred as a
result of the delay. Should Grantee agree to relocate any part of its System facilities and
fail to perform the relocation causing a delay in the construction of City facilities,
Grantee shall reimburse City for all expenses incurred as a result of the delay.
(H) Following relocation, Grantee shall repair, according to City specifications,
clean up, and restore all Public Right -of -Way disturbed during construction and repair of
Grantee's systems, at its own expense, to approximately the same or better condition
as prior to being disturbed.
(I) The installation and replacement of any System facilities in Public Right -
of -Way by Grantee shall be subject to inspection and approval by City. The repair and
maintenance of any System facilities in Public Right-of-way by the Grantee shall be
subject to inspection by City. Grantee agrees to cooperate fully with City in conducting
the inspection. Such inspections shall be conducted within a reasonable time after
completion of the project. Grantee shall promptly perform reasonable remedial action
required by City pursuant to such an inspection. Notwithstanding anything in this section
to the contrary, the authority to regulate and inspect Grantee's System for compliance
with the provisions of Part 192 of Title 49 of the Code of Federal Regulations is hereby
reserved to those federal and state authorities having jurisdiction thereunder and
n othing herein is intended to confer any such authority to City unless expressly provided
u nder applicable law.
(J) City reserves the right to lay and permit to be laid, power, sewer, Gas,
water, and other pipe lines or cables and conduits, and to do and permit to be done, any
u nderground and overhead work that may be deemed necessary or proper by City in,
across, along, over, and under any Public Right -of -Way occupied by Grantee, and to
change any curb or sidewalk or the grade of any street.
(K) If City abandons any Public Rights -of -Way in which Grantee has System
facilities, such abandonment shall be conditioned on Grantee's right to maintain its use
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0700 CITY OF KENNEDALE, TX 2020
of the former Public Right- of -Way and on the obligation of the party to whom the Public
Right -of -Way is abandoned to reimburse Grantee for all removal or relocation
expenses, if Grantee agrees to the removal or relocation of its System facilities
following abandonment of the Public Right -of -Way. If the party to whom the Public
Right -of -Way is abandoned requests Grantee to remove or relocate its System facilities
and Grantee agrees to such removal or relocation, such removal or relocation shall be
done within a reasonable time at the expense of the party requesting the removal or
relocation. If relocation cannot practically be made to another Public Right -of -Way, the
expense of any right-of-way acquisition shall be considered a relocation expense to be
reimbursed by the party requesting the relocation.
S ECTION 4. INDEMNIFICATION AND INSURANCE.
(A) IN CONSIDERATION OF THE GRANTING OF THIS FRANCHISE,
GRANTEE AGREES TO INDEMNIFY AND HOLD HARMLESS CITY, ITS OFFICERS,
AGENTS, AND EMPLOYEES (THE "INDEMNITEES") FROM AND AGAINST ALL
S UITS, ACTIONS, LIABILITY, OR CLAIMS OF INJURY TO ANY PERSON OR
PERSONS, OR DAMAGES TO ANY PROPERTY BROUGHT OR MADE FOR OR ON
ACCOUNT OF ANY DEATH, INJURIES TO, OR DAMAGES RECEIVED OR
S USTAINED BY ANY PERSON OR PERSONS OR FOR DAMAGE TO OR LOSS OF
S ROPERTY ARISING OUT OF, OR OCCASIONED BY GRANTEE'S INTENTIONAL
OR NEGLIGENT ACTS OR OMISSIONS IN CONNECTION WITH GRANTEE'S
OPERATIONS; THIS INDEMNIFICATION SHALL APPLY WHETHER OR NOT CITY,
ITS AGENTS, OFFICERS OR EMPLOYEES WERE NEGLIGENT.
(B) IT IS THE INTENT OF THE PARTIES BY AGREEMENT TO THIS
S ECTION 4 THAT IF A CLAIM IS MADE IN ANY FORUM AGAINST INDEMNITEES
FOR ANY OF THE REASONS REFERRED TO IN SECTION 4(A), AND UPON
RESOLUTION OF THE CLAIM:
(1) THERE IS NO FINDING BY A COURT OF COMPETENT
JURISDICTION THAT INDEMNITEES WERE NEGLIGENT IN CONNECTION WITH
ANY OF THE REASONS REFERRED TO IN SECTION 4(A), GRANTEE SHALL
HOLD INDEMNITEES HARMLESS AND INDEMNIFY THEM FOR ANY DAMAGE,
LOSS, EXPENSE, OR LIABILITY RESULTING FROM THE CLAIM, INCLUDING ALL
REASONABLE ATTORNEY'S FEES, COSTS, AND PENALTIES INCURRED; OR
(2) THERE IS A FINDING BY A COURT OF COMPETENT
JURISDICTION THAT GRANTEE AND INDEMNITEE WERE BOTH NEGLIGENT IN
CONNECTION WITH ANY OF THE REASONS REFERRED TO IN SECTION 4,
INDEMNITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(C) This section does not waive any governmental immunity available to City
under Texas law. This section is not intended to create a cause of action or liability for
the benefit of third parties, but is solely for the benefit of Grantee and City. This section
is not intended to limit the ability of City or Grantee to settle claims through alternative
dispute resolution.
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0700 CITY OF KENNEDALE, TX 2020
(D) If any action, suit or proceeding is brought against City, its agents and
employees, upon any claim arising out of Grantee's operations, City shall give notice in
writing to Grantee by registered or certified mail. City agrees to reasonably cooperate
with Grantee in connection with such defense.
(E) Promptly after receipt by an Indemnitee of any claim or notice of the
commencement of any action, administrative or legal proceeding, or investigation as to
which the indemnity provided for in Section 4(A) hereof may apply, the Indemnitee shall
notify Grantee in writing of such fact. Grantee shall assume the defense thereof with
counsel designated by Grantee and reasonably satisfactory to the Indemnitee.
(F) Should an Indemnitee be entitled to indemnification under this Section (4)
hereof as a result of a claim by a third party, and Grantee fails to assume the defense of
such claim, the Indemnitee will, at the expense of Grantee, contest (or, with the prior
written consent of Grantee, settle) such third party claim.
(G) Grantee shall insure its obligations and risks undertaken pursuant to this
Franchise in the form of a formal plan of self-insurance maintained in accordance with
sound accounting and risk -management practices, or, at its option, maintain the
following insurance coverages throughout the term of this Franchise:
(1) Commercial general or excess liability with minimum limits of five
million dollars ($5,000,000). To the extent that coverage is
maintained on a claim made form, the minimum limits are ten
million dollars ($10,000,000) per occurrence and twenty million
dollars ($20,000,000) aggregate. This coverage shall include the
following:
(a) Completed operations to be maintained for one (1) year.
(b) Personal and advertising injury.
(c) Contractual liability.
(d) Explosion, collapse, or underground (XCU) hazards.
(2) Automobile liability coverage with a minimum policy limit of one
million dollars ($1,000,000) combined single limit. This coverage
shall include all owned, hired, and non -owned automobiles.
Pollution liability insurance, with a minimum coverage of ten million
dollars ($10,000,000) per occurrence shall be provided for bodily
injury and property damage resulting from pollutants which are
discharged suddenly and accidentally. Such insurance shall
provide coverage for clean-up costs.
(H) Prior to commencement of operations pursuant to this Agreement,
Grantee shall furnish City with proof of insurance.
(I) Grantee will require its self-insurance to respond to the same extent as if
City was an additional insured and waive subrogation rights against City.
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0700 CITY OF KENNEDALE, TX 2020
SECTION 5. GAS SERVICE.
(A) Grantee shall furnish reasonably adequate service to the public at
reasonable rates and charges therefore; and Grantee shall maintain its System in good
order and condition. Such rates shall be established in accordance with all applicable
statutes and ordinances. Grantee shall maintain on file with City copies of its current
tariff, schedules or rates and charges, customer service provisions, and line extension
policies. The rates and charges collected from its customers in City shall be subject to
revision and change by either City or Grantee in the manner provided by law.
(B) Grantee hereby agrees that it will not arbitrarily refuse to provide service
to any Person that it is economically feasible for Grantee to serve. In the event that a
Person is refused service, said Person may request a hearing before the City Council of
City or its designee, said hearing to be held within forty-five (45) days from the date of
the request for hearing. City Council of City may order Grantee to provide service or
take any other action necessary to bring Grantee into compliance with the intent of the
City Council in granting this Franchise, including termination of this Franchise in
accordance with Section 12. The City Council of City shall render its opinion at the next
regular meeting but in no event shall it be required to act in less than seven (7) days.
(C) Grantee shall keep and maintain its books, records, contracts, accounts,
documents, and papers in any way related to this Franchise Ordinance and shall make
them available for inspection by City officials and employees upon reasonable notice.
(D) Grantee shall install, repair, maintain, and replace its System facilities in
a good and workmanlike manner.
(E) If Grantee determines to install a meter in or near the Public Right -of -
Way, Grantee agrees to discuss with City the aesthetics of the meter placement.
Grantee shall not place a meter within City sidewalks. If City requires a meter upgrade,
Grantee will comply so long as City reimburses Grantee for the reasonable costs
incurred by Grantee in changing meters; provided, however, that in no event shall
underground meters be required.
(F) Grantee shall take such measures which will result in its System facilities
meeting the standards required by applicable federal, state, and environmental laws.
(G) Nothing in this Franchise shall impair the right of City to fix, within
constitutional and statutory limits, a reasonable price to be charged for natural gas, or to
provide and fix a scale of prices for natural gas, and other charges, to be charged by
Grantee to residential consumers, commercial consumers, industrial consumers, or to
any combination of such consumers, within the territorial limits of City as same now
exists or as such limits may be extended from time to time hereafter.
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0700 CITY OF KENNEDALE, TX 2020
SECTION 6. NON-EXCLUSIVE FRANCHISE.
(A) The rights, privileges, and franchises granted by this Ordinance are not
to be considered exclusive, and City hereby expressly reserves the right to grant, at any
time, like privileges, rights, and franchises as it may see fit to any other person or
corporation for the purpose of transporting, delivering, distributing, or selling Gas to and
for City and the inhabitants thereof.
(B) City reserves the right to own and/or operate its own system for the
purpose of transporting, delivering, distributing, or selling gas to and for City and
inhabitants thereof.
SECTION 7. CONSIDERATION AND METHOD OF PAYMENT.
(A) The consideration payable by Grantee for the rights and privileges granted
to Grantee herein shall be five percent (5%) of the Gross Revenues received by
Grantee during the preceding calendar year. Grantee shall pay City on or before the
15th day of February, 2021, an initial payment in the amount based on Gross Revenues
for theyear January1, 2020, through December 31, 2020, and on or before the 15th day
g
of February each succeeding year during the term of this franchise. The final payment
under the initial term shall be made on the 15th day of February, 2030, an amount based
on Gross Revenues for January 1, 2029 through December 31, 2029.
(B) The initial payment of the franchise fee pursuant to this Ordinance shall be
for the privilege period from January 1, 2021, through December 31, 2021 based upon
the Gross Revenues during the preceding calendar year (January 1, 2020, through
December 31, 2020). Each subsequent payment shall be for the privilege period of the
calendar year in which the payment is made.
(C) The franchise fee amounts based on Contributions in Aid of Construction
(CIAC) shall be calculated on an annual calendar year basis, i.e., from January 1
through December 31 of each calendar year. The franchise fee amounts that are due
based on CIAC shall be paid at least once annually on or before April 30 each year
based on the total CIAC recorded during the preceding calendar year. The initial CIAC
franchise fee payment under this ordinance shall be due on or before April 30, 2021 and
will be based on CIAC revenues for the year January 1 through December 31, 2020 in
accordance with the terms of the previous agreement. All subsequent CIAC franchise
fee payments shall be due on or before April 30 of each succeeding year during the
term of this franchise with the final payment under the initial term being made on or
before April 30, 2030.
(D) If Grantee fails to pay when due any payment provided for in this Section,
Grantee shall pay such amount plus interest at the current prime rate per annum from
such date until payment is received by City.
(E) Grantee agrees that at the time of each payment, Grantee shall also
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0700 CITY OF KENNEDALE, TX 2020
submit to City a statement showing its Gross Revenues for the calendar year preceding
the year in which payment is made from the sale of gas to its customers, including but
not limited to residential, commercial, and industrial customers, within said corporate
limits, including the amount of revenues received by Grantee for the transportation of
Gas.
(F) City may, if it sees fit, upon reasonable notice to Grantee, have the books
and records of Grantee examined by a representative of City to ascertain the
correctness of the reports agreed to be filed herein. Grantee shall make available to the
auditor such personnel and records as City may in its reasonable discretion request in
order to complete such audit, and shall make no charge to City therefore. Grantee shall
assist City in its review by providing all requested information no later than fifteen (15)
days after receipt of a request. The cost of the audit shall be borne by City unless the
audit discloses that Grantee has underpaid the franchise fee by 10% or more, in which
case the reasonable costs of the audit shall be reimbursed to City by Grantee. If such
an examination reveals that Grantee has underpaid City, then upon receipt of written
notification from City regarding the existence of such underpayment, Grantee shall
undertake a review of City's claim and if said underpayment is confirmed, remit the
amount of underpayment to City, including any interest calculated in accordance with
Section 7(D). Should Grantee determine through examination of its books and records
that City has been overpaid, upon receipt of written notification from Grantee regarding
the existence of such overpayment, City shall review Grantee's claim and if said
overpayment is confirmed, remit the amount of overpayment to Grantee.
(G) If, after receiving reasonable notice from City of City's intent to perform an
audit as provided herein, Grantee fails to provide data, documents, reports, or
information required to be furnished hereunder to City, or fails to reasonably cooperate
with City during an audit conducted under the terms hereunder, City may elect to
terminate this Franchise in accordance with Section 12.
(H) City shall within thirty (30) days of final approval, give Grantee notice of
annexations and disannexations of territory by City, which notice shall include a map
and addresses, if known. Upon receipt of said notice, Grantee shall promptly initiate a
process to reclassify affected customers into the city limits no later than sixty (60) days
after receipt of notice from City. The annexed areas added to the city limits will be
included in future franchise fee payments in accordance with the effective date of the
annexation. Upon request from City, Grantee will provide documentation to verify that
affected customers were appropriately reclassified and included for purposes of
calculating franchise fee payments. In no event shall Grantee be required to add
premises for the purposes of calculating franchise payment prior to the earliest date that
the same premises are added for purposes of collecting sales taxes.
(I) Grantee may file with City a tariff or tariff amendment(s) to provide for the
recovery of the franchise fees under this Agreement. City agrees that (i) as regulatory
authority, it will adopt and approve the ordinance, rates or tariff which provide for one
hundred percent (100%) recovery of such franchise fees as part of Grantee's rates; (ii) if
City intervenes in any regulatory proceeding before a federal or state agency in which
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0700 CITY OF KENNEDALE, TX 2020
the recovery of Grantee's franchise fees is an issue, City will take an affirmative position
supporting one hundred percent (100%) recovery of such franchise fees by Grantee
and; (iii) in the event of an appeal of any such regulatory proceeding in which City has
intervened, City will take an affirmative position in any such appeals in support of the
one hundred percent (100%) recovery of such franchise fees by Grantee. City agrees
that it will take no action, nor cause any other person or entity to take any action, to
prohibit the recovery of such franchise fees by Grantee. This paragraph applies
exclusively to City's franchise fees and nothing herein shall prohibit City from denying or
opposing a request by Grantee to increase of modify its other rates, charges, fees, or
tariffs.
SECTION 8. OTHER TAXES.
(A) It is expressly agreed that the aforesaid payments shall be in lieu of any
and all other and additional occupation taxes, easement, Franchise taxes or charges,
municipal license, permit and inspection fees, bonds, street taxes, and street or alley
rentals or charges except as provided in this section. Payment of the fees and other
consideration due hereunder by Grantee is not accepted by City in lieu of any
reimbursement of regulatory costs, payment of taxes that are uniform and generally
applicable to other persons conducting business within City, such as property, sales
and use taxes or the costs to repair damages to the Public Right-of-way or to indemnify
City as required herein. If City does not have the legal power to agree that the payment
of the foregoing sums of money shall be in lieu of taxes, licenses, fees, street or alley
rentals or charges, easement or Franchise taxes or charges as aforesaid, then City
agrees that it will apply so much of said sums of money paid as may be necessary to
satisfy Grantee's obligations, if any, to pay any such taxes, licenses, charges, fees,
rentals, easement or Franchise taxes or charges as aforesaid.
(B) Payment of the fees and other consideration due hereunder shall not in
any way limit or inhibit any of the privileges of City whether under this Franchise
Ordinance or otherwise.
SECTION 9. TERM.
The initial term of this Franchise shall expire at midnight on December 31, 2030.
The Franchise may be extended for up to two (2) additional terms of five (5) years each
on the same terms and conditions as set forth herein.
SECTION 10. OTHER FRANCHISES.
If Grantee should at any time after the effective date of this Ordinance agree to a
new municipal franchise ordinance, or renew an existing municipal franchise ordinance,
with another municipality in the Mid -Tex Division, as it exists on the effective date of this
Agreement, which municipal franchise ordinance determines the franchise fee owed to
that municipality for the use of its Public Right-of-way in a manner that, if applied to City,
PAGE 12 OF 17
0700 CITY OF KENNEDALE, TX 2020
would result in a franchise fee greater than the amount otherwise due City under this
Ordinance, then the franchise fee to be paid by Grantee to City pursuant to this
Ordinance may, at the election of City, be increased so that the amount due and to be
paid is equal to the amount that would be due and payable to City were the franchise
fee provisions of that other franchise ordinance applied to City. City acknowledges that
the exercise of this right is conditioned upon City's acceptance of all terms and
conditions of the other municipal franchise in toto. City may request waiver of certain
terms and Grantee may grant, in its sole reasonable discretion, such waiver.
SECTION 11. CITY RULES AND REGULATION, DOCUMENTS AND REPORTS.
(A) City expressly reserves, and Grantee expressly recognizes, City's right
and duty to adopt, from time to time, in addition to the provisions herein contained, such
cost of service, cost of Gas, charter provisions, ordinances, rules, and regulations as
City deems necessary.
(B) Grantee shall file with City, those documents required by law to be filed
with City, and otherwise, upon City's request, all tariffs, rules, regulations and policies
under consideration with the Railroad Commission relating to the facilities and
operations, any matters relating to the System facilities and operations, any matters
affecting the use of Public Right -of -Way or this Franchise. Upon request, Grantee shall
provide City with a copy of filings it makes with the Railroad Commission affecting the
same. In addition, upon request, Grantee will provide City copies of Grantee's most
recent annual report, all petitions, communication reports, advice letters, audits,
complaints, and applications together with supporting pre -filed testimony and exhibits
filed by Grantee or third parties with the Railroad Commission.
SECTION 12. DEFAULT; REMEDIES, TERMINATION..
(A) In addition to all other rights and powers retained by City under this
Franchise or otherwise, City reserves the right to forfeit and terminate the Franchise
and all rights and privileges of Grantee hereunder in the event of a breach of its terms
and conditions. A breach by Grantee shall include, but shall not be limited to, the
following:
(1) Violation of any provision of the Franchise or any rule, order,
regulation or determination of City made pursuant to the Franchise;
(2) Attempt to evade any provision of the Franchise or to practice any
fraud or deceit upon City or its Residents;
(3) Failure to begin or complete Gas facility construction or extension
as agreed to with City;
(4) Failure to provide the services set forth in the Franchise; or
(5) Material misrepresentation of fact in the application for or
negotiation of the Franchise.
(B) The foregoing shall not constitute a breach if the violation occurs without
fault of Grantee or occurs as a result of circumstances beyond its control which could
PAGE 13 OF 17
0700 CITY OF KENNEDALE, TX 2020
not have been avoided as a result of the exercise of reasonable care. Grantee shall not
be excused by mere economic hardship or by misfeasance or malfeasance of its
directors, officers or employees.
(C) City may make a written demand that Grantee comply with any such
provision, rule, order, or determination under or pursuant to this Franchise. If the
violation by Grantee 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, City may take under consideration the issue of
termination of the Franchise.
(D) If Grantee does not cure the default within such time frame, City shall
notify Grantee in writing of its right to have a hearing before the City Council to present
any objections or defenses Grantee may have that are relevant to the proposed
termination. The notice shall specify a hearing date which shall be at least thirty (30)
days from the date of the notice. After such hearing, City may determine whether to
continue or to terminate the Franchise. The final decision of the City Council may be
appealed to any court or regulatory authority having jurisdiction. Upon timely appeal by
Grantee of the City Council's decision terminating the Franchise, the effective date of
such termination shall be either when such appeal is withdrawn or a court order
upholding the termination becomes final and unappealable, and until the termination
becomes effective, the provisions of this Franchise shall remain in effect for all
purposes.
(E) Notwithstanding the foregoing, the rights and remedies of City set forth in
this section shall be in addition to, and not in limitation of, any other rights and remedies
provided by law or in equity. City and Grantee understand and intend that such
remedies shall be cumulative to the maximum extent permitted by law and the exercise
by City of any one or more of such remedies shall not preclude the exercise by City, at
the same or different times, of any other such remedies for the same breach of this
Agreement.
(F) The prevailing party in the adjudication of any proceeding relating to this
Agreement shall be authorized to recover its reasonable and necessary attorneys fees
pursuant to Section 271.159 of the Texas Local Government Code.
SECTION 13. MISCELLANEOUS PROVISIONS.
(A) This Franchise is made for the exclusive benefit of City and Grantee, and
nothing herein is intended to, or shall confer any right, claim, or benefit in favor of any
third party.
(B) No assignment or transfer of this Franchise shall be made, in whole or in
part, without approval of the City Council of City unless otherwise superseded by state
laws, rules, or regulations or Railroad Commission of Texas action and such approval
shall not be unreasonably withheld or delayed; provided however that Grantee may
PAGE 14 OF 17
0700 CITY OF KENNEDALE, TX 2020
assign this Agreement to an Affiliate without City's consent or approval, upon thirty (30)
days' notice to City. City will grant such approval unless assignee is materially weaker
than Grantee. For the purpose of this section, "materially weaker" means that the long
term unsecured debt rating of the assignee is Tess than investment grade as rated by
both S&P and Moody's. If the assignee is materially weaker, City may request additional
documents and information reasonably related to the transaction and the legal,
financial, and technical qualifications of the assignee. Upon approval or assignment to
an Affiliate without approval as provided herein, the rights, privileges, and franchise
herein granted to Grantee shall extend to and include its successors and assigns. The
assignment shall not become effective until assignee agrees in writing to be bound by
the terms, conditions, provisions, requirements and agreements contained in this
Franchise.
(C) If either City or Grantee requests renegotiation of any term of this
Franchise, Grantee and City agree to renegotiate in good faith revisions to any and all
terms of this Franchise. If the parties cannot come to agreement upon any provisions
being renegotiated, then the existing provisions of this Franchise will continue in effect
for the remaining term of the Franchise.
(D) Any notices required or desired to be given from one party to the other
party to this Franchise shall be in writing and shall be given and shall be deemed to
have been served and received (whether actually received or not) if (i) delivered in
person to the address set forth below;
(ii) deposited in an official depository under the regular care and custody of the United
States Postal Service located within the confines of the United States of America and
sent by certified mail, return receipt requested, and addressed to such party at the
address hereinafter specified; or
(iii) delivered to such party by courier receipted delivery. Either party may designate
another address within the confines of the continental United States of America for
notice, but until written notice of such change is actually received by the other party, the
last address of such party designated for notice shall remain such patty's address for
notice.
CITY:
City Manager
City of Kennedale
405 Municipal Drive
Kennedale, Texas 76060
WITH A COPY TO:
Mr. Drew Larkin
Taylor Olson Adkins Sralla & Elam LLP
6000 Western Place, Suite 200
Fort Worth, Texas 76107
GRANTEE:
Manager of Public Affairs
Atmos Energy
100 W. Morningside Dr.
Fort Worth, Texas 76110
PAGE 15 OF 17
0700 CITY OF KENNEDALE, TX 2020
(E) Nothing contained herein shall limit or restrict any legal rights that City
may possess arising from any alleged violation of this Franchise.
(F) Neither City nor Grantee shall be excused from complying with any of the
terms and conditions of this Franchise by any failure of 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.
(G) The paragraph headings contained in this Franchise are for convenience
only and shall in no way enlarge or limit the scope or meaning of the various paragraphs
hereof. Both parties have participated in the preparation of this Franchise and this
Franchise shall not be construed either more or less strongly against or for either party.
SECTION 14. SEVERABILITY
This Franchise and every provision hereof, shall be considered severable, and
the invalidity or unconstitutionality of any section, clause, provision, or portion of this
Franchise shall not affect the validity or constitutionality of any other portion of this
Franchise. If any term or provision of this Franchise is held to be illegal, invalid or
unenforceable, the legality, validity or unenforceability of the remaining terms or
provisions of this Franchise shall not be affected thereby.
SECTION 15. ACCEPTANCE AND EFFECTIVE DATE.
To accept this Franchise, Grantee must file with the City Secretary its written
acceptance of this Franchise within sixty (60) days after its final passage and approval
by City. If such written acceptance of this Franchise is not filed by Grantee, this
Franchise shall be rendered null and void. If Grantee accepts this Franchise, this
Franchise shall become effective upon final passage and approval. When this
Franchise becomes effective and Grantee makes it first payments due hereunder, any
and all previous ordinances of City granting franchises for Gas delivery purposes that
were held by Grantee shall be cancelled.
PASSED AND APPROVED ON THIS 19TH DAY OF MAY, 2020.
ATTEST:
lapiter
CITY SECRETARY LESLIE E. GALLOWAY
PAGE 16 OF 17
0700 CITY OF KENNEDALE, TX 2020
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE
I, Leslie E. Galloway, City Secretary of the City of Kennedale, Tarrant County, Texas, do
hereby certify that the above and foregoing is a true and correct copy of an ordinance passed by
the City Council of the City of Kennedale, Texas, at a regular session, held on the 19th day of
May, 2020, as it appears of record in the Minutes of said regular session.
WITNESS MY HAND AND SEAL OF SAID CITY, THIS THE 19TH DAY OF MAY, 2020.
LESLIE E. GALLOWAY, CITY SECRETARY
CITY OF KENNEDALE, TEXAS
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PAGE 17 OF 17
0700 CITY OF KENNEDALE, TX 2020