O244l i-, i `~ ,
ORDINANCE NO. 244
AN ORDINANCE AMENDING THE ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF KENNEDALE GRANTING A GAS
FRANCHISE TO LONE STAR GAS COMPANY, PREDECESSOR IN
INTEREST TO TXU GAS COMPANY, TO PROVIDE FOR A
DIFFERENT CONSIDERATION AND TO AUTHORIZE THE LEASE OF
FACILITIES WITHIN THE CITY'S RIGHTS-OF-WAY; PROVIDING AN
EFFECTIVE DATE; PROVIDING FOR ACCEPTANCE BY TXU GAS
COMPANY; FINDING AND DETERMINING THAT THE MEETING AT
WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW.
WHEREAS, on May 20, 1957, the City Council adopted an ordinance granting Lone
Star Gas Company, (now TXU Gas Company) ("TXU Gas" or "Company") a franchise for a
period of 50 years to use the public rights-of--way within the City of Kennedale (the "City") for
the purpose of laying, maintaining, using and operating a system of pipelines for the provision of
natural gas to residential, commercial and industrial customers located in the City (the
"Franchise"); and
WHEREAS, on December 11, 1969, the City Council adopted Ordinance No. 69-14
amending the Franchise to provide for a franchise fee of four percent;
WHEREAS, pursuant to that certain Settlement Agreement entered into by and between
TXU Gas and the City, as approved by the City Council on January 9, 2003, TXU Gas and the
City desire to amend the Franchise to amend the manner in which franchise fees paid pursuant to
the Franchise will be calculated and to authorize in certain circumstances the lease of facilities
owned by TXU Gas and located in the public rights-of--way.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF KENNEDALE, TEXAS:
SECTION 1: Effective January 1, 2002, Section 9 of the Franchise is deleted in its
entirety and replaced with the following:
"Section 9.
A. Consideration. The consideration payable by Company for the rights and
privileges granted to Company by the franchise ordinance heretofore duly passed
by the governing body of this City and duly accepted by Company is four percent
(4%) of the Gross Revenues, as defined in Section 9.B. below, received by
Company.
B. Definitions. "Gross Revenues" shall mean all revenue derived or received,
directly or indirectly, by the Company from or in connection with the operation of
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the System within the corporate limits of the City and including, without
limitation:
(1) all revenues received by the Company from the sale of gas to all classes of
customers within the City;
(2) all revenues received by the Company from the transportation of gas
through the pipeline system of Company within the City to customers
located within the City;
(3) the value of gas transported by Company for Transport Customers through
the System of Company within the City ("Third Party Sales"), with the
value of such gas to be reported by each Transport Customer to the
Company, provided, however, that should a Transport Customer refuse to
furnish Company its gas purchase price, Company shall estimate same by
utilizing Company's monthly industrial Weighted Average Cost of Gas, as
reasonably near the time as the transportation service is performed; and
(4) "Gross Revenues" shall include:
(a) other revenues derived from the following `miscellaneous
charges'
i. charges to connect, disconnect, or reconnect gas within the
City;
ii. charges to handle returned checks from consumers within
the City;
iii. such other service charges and charges as may, from time
to time, be authorized in the rates and charges on file with
the City; and
iv. contributions in aid of construction ("CIAO");
(b) revenues billed but not ultimately collected or received by the
Company; and
(c) gross receipts fees.
(5) "Gross Revenues" shall not include:
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(a) the revenue of any Person including, without limitation, an
affiliate, to the extent that such revenue is also included in Gross
Revenues of the Company;
(b) sales taxes;
(c) any interest income earned by the Company; and
(d) all 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 City's right of way.
C. Calculation and Payment of Franchise Fees Based on CIAC.
(1) 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.
(2) The franchise fee amounts that are due based on CIAC shall be paid at
least once annually on or before June 1 each year based on the total CIAC
recorded during the preceding calendar year.
D. Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid by
Company.
(1) If Company 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, which
municipal franchise ordinance determines the franchise fee owed to that
municipality for the use of its public rights-of--way in a manner that, if
applied to the City, would result in a franchise fee greater than the amount
otherwise due City under this Ordinance, then the franchise fee to be paid
by Company to City pursuant to this Ordinance shall 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.
(2) The provisions of this Subsection D apply only to the amount of the
franchise fee to be paid and do not apply to other franchise fee payment
provisions, including without limitation the timing of such payments.
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E. Company Franchise Fee Recovery Tariff.
(1) Company may file with the City a tariff amendment(s) to provide for the
recovery of the franchise fees under this amendment.
(2) City agrees that (i) as regulatory authority, it will adopt and approve the
ordinance, rates or tariff which provide for 100% recovery of such
franchise fees as part of Company' rates; (ii) if the City intervenes in any
regulatory proceeding before a federal or state agency in which the
recovery of Company' franchise fees is an issue, the City will take an
affirmative position supporting 100% recovery of such franchise fees by
Company and; (iii) in the event of an appeal of any such regulatory
proceeding in which the City has intervened, the City will take an
affirmative position in any such appeals in support of the 100% recovery
of such franchise fees by Company.
(3) 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
Company.
F. Lease of Facilities Within City's Rights-of--Way. Subject to the provisions of the
City's City Charter, Company shall have the right to lease, license or otherwise
grant to a party other than Company the use of its facilities within the City's
public rights-of--way provided: (i) Company first notifies the City of the name of
the lessee, licensee or user; the type of service(s) intended to be provided through
the facilities; and the name and telephone number of a contact person associated
with such lessee, licensee or user and (ii) Company makes the franchise fee
payment due on the revenues from such lease pursuant to Sections 9A. and B. of
this Ordinance. This authority to lease facilities within City's Rights-of--Way shall
not affect any such lessee, licensee or user's obligation, if any, to pay franchise
fees to the City.
G. Payment Terms. Except for payments for CIAO Revenues, which shall be paid in
accordance with Section 9.C. hereof, the franchise fee shall be paid on or before
the 1st day of June of each year for the preceding year during the term of this
franchise, and shall be for the year the payment is made. Such annual payment
shall be for the rights and privileges herein granted to Company, including
expressly, without limitation, the right to use the streets, alleys, and public ways
of City. And it is also expressly agreed that the aforesaid annual payment shall be
in lieu of any and all other and additional occupation taxes, easement and
franchise taxes or charges (whether levied as an ad valorem, special or other
character of tax or charge), in lieu of municipal license and inspection fees, street
taxes, and street or alley rentals or charges, and all other and additional municipal
taxes, charges, levies, fees, and rentals of whatsoever kind and character which
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City may impose or hereafter be authorized to levy and collect excepting only the
usual general or special ad valorem taxes which City is authorized to levy and
impose upon real and personal property. Should City 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 aforesaid, then City agrees that it will apply so much of said sums of
money paid as may be necessary to satisfy Company's obligations, if any, to pay
any such taxes, licenses, charges, fees, rentals, easement or franchise taxes or
charges.
H. Report. Company agrees that on the same date that payments are made, as
provided in this Section 9, it will file with the City Secretary a sworn report
showing the Gross Revenues received by the Company within the City during the
calendar year preceding the date of payment. City may, if it sees fit, have the
books and records of Company examined by a representative of City to ascertain
the correctness of the sworn reports agreed to be filed herein."
SECTION 2: In all respects, except as specifically and expressly amended by this
ordinance, the existing effective franchise ordinance heretofore duly passed by the governing
body of the City and duly accepted by Company shall remain in full force and effect according to
its terms until said franchise ordinance terminates as provided therein.
SECTION 3: The sections, paragraphs, sentences, clauses and phrases of this Ordinance
are severable. If any portion of this Ordinance is declared illegal or unconstitutional by the valid
final judgment or decree of any court of competent jurisdiction, such illegality or
unconstitutionality shall not affect the legality and enforceability of any of the remaining
portions of this Ordinance.
SECTION 4: This Ordinance shall be in full force and effect immediately upon its
passage and approval, provided that Company files with the City Secretary within thirty (30)
calendar days following adoption of this Ordinance its written acceptance of this Ordinance in
substantially the following form:
To the Honorable Mayor and City Council:
TXU Gas Distribution, a division of TXU Gas Company, acting by and through the undersigned
authorized officer, hereby accepts in all respects, on this the ~_ day of ~prY~- ,
2003, Ordinance No. 244 amending the current gas franchise between the City and TXU Gas and
the same shall constitute and be a binding contractual obligation of TXU Gas and the City.
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TXU Gas Distribution
A division of TXU Gas Company
BY ~ - ~..._-lam.
Vice President
SECTION 5: It is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place and purpose of said meeting was given as required.
PASSED AND APPROVED ON THIS 9th DAY OF JANUARY, 2003.
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CITY SECRE ARY
APPROVED AS TO FORM AND LEGALITY:
City Attorney
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TXU GAS
FRANCHISE FEE PROFILE
KENNEDALE ,TEXAS
HISTORICAL DATA
FRANCHISE FEE (Calendar Year 2000)
Revenue Class ~~~~ Pil~a1
Atnet~rtt Revenues 1i-olt~~e ~
Residential 4% 4% $317,197
Residential Govemmental - 4% $0
Commercial 4% 4% $129,412
Commercial Governmental - 4% $30,849
Industrial - 4% $56,140
Industrial Governmental - 4% $0
Transportation - 4% -----
3"~ Party Value of Gas - 4% -----
Service Charges - 4% $5,705
Contributions in Aid of Construction _ 4% History
Not Available -