02-03-19-Ordinance-Granting Atmos Franchise-03/18/2019ORDINANCE NO: 02-03-19
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
SANGER, DENTON COUNTY, TEXAS, FOR THE TRANSPORTATION, DELIVERY, SALE,
AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID CITY FOR ALL
PURPOSES; PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF
THE PUBLIC RIGHTS -OF -WAYS; AND PROVIDING THAT SUCH FEE SHALL BE IN LIEU
OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES; AND REPEALING
ALL PREVIOUS GAS FRANCHISE ORDINANCES.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER, TEXAS:
SECTION 1. GRANT OF AUTHORITY: The City of Sanger, Texas, hereinafter called "City,"
hereby grants to Atmos Energy Corporation, Mid -Tex Division, hereinafter called "Atmos Energy," its
successors and assigns, consent to use and occupy the present and future streets, alleys, highways, public
utility easements, public ways and other public places ("Public Rights -of -Way"), for the purpose of
laying, maintaining, constructing, protecting, operating, and replacing therein and thereon pipelines and
all other appurtenant equipment (the "System") 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 the City corporate limits, as such
limits may be amended from time to time during the term of this franchise, said consent being granted for
a term ending December 31, 2039.
SECTION 2. CONSTRUCTION MAINTENANCE OPERATION & RELOCATION OF
ATMOS ENERGY FACILITIES:
A. Atmos Energy shall lay, maintain, construct, operate, and replace its pipes, mains, laterals, and
other equipment to minimize interference with traffic, place or cause to be placed appropriate
barriers to mark excavations or obstructions, and restore to approximate original condition all
Public Rights -of -Way that it may disturb. In determining the location of the facilities of the City
and other users of Public Right -of -Way within City, City shall minimize interference with then
existing facilities of Atmos Energy and shall require other users of Public Rights -of -Way to
minimize interference with existing facilities of Atmos Energy. In the event of a conflict between
the location of the proposed facilities of Atmos Energy and the location of the existing facilities
of City or other users of Public Rights -of -Way within Public Rights -of -Way that cannot
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otherwise be resolved, City or an authorized agent of City shall resolve the conflict and determine
the location of the respective facilities within the Public Rights -of -Way.
Atmos Energy or contractors working on behalf of Atmos Energy shall not be required to pay for
street cutting, street excavation or other special permits related to excavations in Public Rights -of -
Way in connection with Atmos Energy's operations in Public Rights -of -Way. City shall provide
Atmos Energy 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 Atmos Energy as soon as
reasonably possible of any projects that will affect Atmos Energy's facilities located in the Public
Rights -of -Way. When required by City to remove or relocate its mains, laterals, and/or other
facilities lying within Public Rights -of -Way, Atmos Energy shall do so as soon as practically
possible with respect to the scope of the project. In no event shall Atmos Energy be required to
remove or relocate its facilities in less than thirty (30) days from the time notice is given to Atmos
Energy by City.
B. If City, in constructing its sewers, drainage, water lines, streets, or utilities, should request that
Atmos Energy remove or relocate its mains, laterals, and other facilities lying within Public
Rights -of -Way, Atmos Energy shall do so at its own expense for facilities that are in conflict,
unless such work is for the primary purpose of beautification or to accommodate a private
developer. Facilities are deemed to be in conflict to the extent that the proposed City facilities are
determined by Atmos Energy to be inconsistent with gas distribution industry standard safe
operating practices for existing facilities. Atmos Energy shall not be required to relocate facilities
to a depth of greater than four (4) feet unless prior agreement is obtained from Atmos Energy.
When Ahnos Energy is required by City to remove or relocate its mains, laterals, and other
facilities lying within Public Rights -of -Way to accommodate a request by City, and costs of
utility removals or relocations are eligible under federal, state, county, local or other programs for
reimbursement of costs and expenses incurred by Atmos Energy as a result of such removal or
relocation, and such reimbursement is required to be handled through City, Armes Energy costs
and expenses shall be included in any application by City for reimbursement if Atmos Energy
submits its cost and expense documentation to City prior to the filing of the application. City
shall provide reasonable written notice to Atmos Energy of the deadline for Armes Energy to
submit documentation of the costs and expenses of such relocation to City. In the event that the
City does not provide sufficient written notice to Atmos Energy as set forth in this paragraph, the
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City shall be responsible for fifty percent (50%) of the cost of the removal or relocation of Armes
Energy's facilities.
If Atmos Energy is required by City to remove or relocate its mains, laterals, or other facilities
lying within Public Rights -of -Way for any reason other than the construction or reconstruction of
sewers, drainage, water lines, streets or utilities by City, Atmos Energy shall be entitled to
reimbursement from City or others of the cost and expense of such removal or relocation.
C. When Atmos Energy is required to remove or relocate its mains, laterals or other facilities to
accommodate construction by City without reimbursement from City, Atmos Energy 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 Armes
Energy 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
Company is required by City to perform relocation. City shall not require that Company
document request for reimbursement as a pre -condition to recovery of such relocation costs.
D. If City abandons any Public Rights -of -Way in which Armes Energy has facilities, such
abandonment shall be conditioned on Armes Energy's right to maintain its use 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 Atmos Energy for all removal or relocation expenses if Atmos Energy
agrees to the removal or relocation of its facilities following abandonment of the Public Right -of -
Way. If the party to whom the Public Right -of -Way is abandoned requests Armes Energy to
remove or relocate its facilities and Atmos Energy 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.
SECTION 3. INDEMNITY & INSURANCE: In the event of injury to any person or damage to
any property by reason of Atmos Energy's construction, operation, maintenance, or replacement of Armes
Energy's pipeline system within Public Rights -of -Way, Armes Energy shall indemnify and keep harmless
City from any and all liability in connection therewith, except to the extent such injury or damage is
attributable to the fault of the City, including, without limitation, the City's negligent or intentional acts or
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omissions. Atmos Energy's insurance of its obligations and risks undertaken pursuant to this franchise
may be in the form of self-insurance to the extent permitted by applicable law, under an Atmos Energy
plan of self-insurance maintained in accordance with sound accounting and risk -management practices.
SECTION 4. NON-EXCLUSIVE FRANCHISE: 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.
SECTION 5. PAYMENTS TO CITY:
A. Alums Energy, its successors and assigns, agrees to pay and City agrees to accept, on or before
the I st day of April, 2020, and on or before the same day of each succeeding year during the term
of this franchise the last payment being made on the 1st day of April, 2039, a sum of money
which shall be equivalent to five percent (5%) of the Gross Revenues, as defined in 5.13 below,
received by Atmos Energy during the preceding calendar year.
B. "Gross Revenues" shall mean:
(1) all revenues received by Atmos Energy from the sale of gas to all classes of customers
(excluding gas sold to another gas utility in the City for resale to its customers within
City) within the City;
(2) all revenues received by Atmos Energy from the transportation of gas through the System
of Atmos Energy within the City to customers located within the City (excluding any
gas transported to another gas utility in City for resale to its customers within
City);
(3) the value of gas transported by Armes Energy for Transport Customers through the
System of Attnos Energy within the City ("Third Party Sales")(excluding the value of
any gas transported to another gas utility in City for resale to its customers within
City), with the value of such gas to be established by utilizing Atmos Energy's monthly
Weighted Average Cost of Gas charged to industrial customers in the Mid -Tex division,
as reasonably near the time as the transportation service is performed; and
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C.
(4) "Gross Revenues" shall also include the following "miscellaneous charges": charges to
comiect, disconnect, or reconnect gas and charges to handle returned checks from
consumers within the City.
(5) "Gross Revenues" shall not include:
(a) revenues billed but not ultimately collected or received by Atmos
Energy;
(b) contributions in aid of construction;
(e) the revenue of any affiliate or subsidiary of Atmos Energy;
(d) sales tax and franchise fees paid to the City;
(e) interest or investment income earned by Atmos Energy; and
(f) 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.
The initial payment for the rights and privileges herein provided shall be for the privilege period
January I through December 31, 2020, and each succeeding payment shall be for the privilege
period of the calendar year in which the payment is made.
It is also expressly agreed that the aforesaid payments shall be in lieu of any and all other and
additional occupation taxes, easement, franchise taxes or charges (whether levied as an ad
valorem, special, or other character of tax or charge), municipal license, permit, and inspection
fees, bonds, 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 that City may
now impose or hereafter levy and collect from Atmos Energy or Atmos Energy's agents,
excepting only the usual general or special ad valorem taxes that City is authorized to levy and
impose upon real and personal property. If the 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 fianchise 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 Atmos Energy's
obligations, if any, to pay any such taxes, licenses, charges, fees, rentals, easement or franchise
taxes or charges aforesaid.
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D. Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid by Atmos Energy
If Atmos Energy 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 Atmos Energy's Mid -Tex Division, 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 Atmos Energy to
City pursuant to this Ordinance may, at the election of the 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. The City acknowledges
that the exercise of this right is conditioned upon the City's acceptance of all terms and conditions
of the other municipal franchise in toto. The City may request waiver of certain terms and
Company may grant, in its sole reasonable discretion, such waiver.
E. Atmos Energy Franchise Fee Recovery Tariff
(1) Atmos Energy may file with the City a tariff or tariff amendment(s) to provide for the
recovery of the franchise fees under this agreement.
(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 Atmos
Energy's rates; (ii) if the City intervenes in any regulatory proceeding before a federal or
state agency in which the recovery of Atmos Energy's franchise fees is an issue, the City
will take an affirmative position supporting 100% recovery of such franchise fees by
Atmos Energy 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 Atmos Energy.
(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 Atoms Energy.
F. Lease of Facilities Within City's Rights -of -Way. Atmos Energy shall have the right to lease,
license or otherwise grant to a party other than Atmos Energy the use of its facilities within the
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City's public rights -of -way provided: (i) Atmos Energy 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) Atmos Energy makes the franchise fee payment due on the revenues from such lease
pursuant to Section 5 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.
SECTION 6. ACCEPTANCE OF FRANCHISE: In order to accept this franchise, Atmos
Energy must file with the City Secretary its written acceptance of this franchise ordinance within sixty
(60) days after its final passage and approval by City. If such written acceptance of this franchise
ordinance is not filed by Atmos Energy, the franchise ordinance shall be rendered null and void.
When this franchise ordinance becomes effective, all previous ordinances of City granting
franchises for gas delivery purposes that were held by Atmos Energy shall be automatically canceled and
annulled, and shall be of no further force and effect.
SECTION 7. PARAGRAPH HEADINGS. CONSTRUCTION: The paragraph headings
contained in this ordinance are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several paragraphs hereof. Both parties have participated in the preparation of
this ordinance and this ordinance shall not be construed either more or less strongly against or for either
ply.
SECTION 8. EFFECTIVE DATE:
effective as of August 1, 2019.
If Atmos Energy accepts this ordinance, it becomes
PASSED AND APPROVED on this the /U day of 2019.
ATTEST:
Che 1 pr,
City Secretary
y r�1x A �as Muir, Mayor
�� 1t" 1"" %pity of Sanger, Texas
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STATE OF TEXAS
COUNTY OF DENTON
CITY OF SANGER
I, Cheryl Price, City Secretary of the City of Sanger, Denton 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 Sanger, Texas, at a session, held on the YS— day of
2019, as it appears of record ' the Minutes
approved by City Council on the /91 day of L-7Zow,�', 2019..
WITNESS MY HAND AND
201 .
't
4.TEX AS ...r
this the/9 day of
6
yt?ri, ity Secretary
of S er, Texas
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