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16-97-Ordinance-Granting a Franchise Agreement to Denton County Electric Cooperative-12/01/1997CITY OF SANGER ORDINANCE NO. 16-97 AN ORDINANCE GRANTING TO DENTON COUNTY ELECTRIC COOPERATIVE, A FRANCHISE FOR THE PURPOSE OF CONSTRUCTING, MAINTAINING, AND USING AN ELECTRIC POWER UTILITY SYSTEM IN THE CITY OF SANGER; REGULATING THE CONSTRUCTION WORK DONE BY THE GRANTEE IN THE TOWN; REQUIRING JOINT USE OF POLES, TRENCHES, AND CONDUITS IN CERTAIN INSTANCES; PRESCRIBING THE RELATIONSHIP AND RELATIVE RIGHTS BETWEEN GRANTEE AND OTHERS WITH RESPECT TO CONSTRUCTION IN THE TOWN AND LOCATION OF FACILITIES; PROVIDING FOR THE QUALITY OF SERVICE TO BE PROVIDED BY GRANTEE; PRESCRIBING THE DUTIES, RESPONSIBILITIES, AND RULE MAKING AUTHORITY OF THE TOWN COUNCIL AND THE TOWN WITH RESPECT TO ADMINISTRATION OF THIS FRANCHISE; REQUIRING CERTAIN RECORDS AND REPORTS AND PROVIDING FOR INSPECTIONS; RESERVING TO THE GOVERNING BODY OF THE TOWN THE RIGHT TO SET PROCEDURE FOR CHANGING THE RATES OF GRANTEE AND PROVIDING THE RIGHTS AND RESPONSIBILITIES OF THE GOVERNING BODY IN SETTING THE RATES; PROVIDING FOR CUSTOMER SECURITY DEPOSITS; PROVIDING FOR SUSPENSION OF SERVICE TO A CUSTOMER: PROVIDING FOR ENFORCEMENT OF THE FRANCHISE; PRESCRIBING THE COMPENSATION TO THE TOWN FROM THE GRANTEE FOR THE FRANCHISE PRIVILEGE; PROVIDING INDEMNITY OF THE TOWN AND ITS EMPLOYEES; SETTING FORTH THE TERM OF THE FRANCHISE AND ITS RENEWAL; REPEALING AN ORDINANCE PASSED AND APPROVED BY THE TOWN COUNCIL ON _ December 1 1997 , EXTENDING A FRANCHISE AGREEMENT BETWEEN THE CITY OF SANGER, TEXAS, AND DENTON COUNTY ELECTRIC COOPERATIVE, INC.; PROVIDING FOR ACCEPTANCE OF THE FRANCHISE BY GRANTEE; AND PROVIDING AN EFFECTIVE DATE BE IT ORDAINED by the Town council of the CITY OF SANGER, Texas: SECTION 1. PURPOSE There is hereby granted to Denton County Electric Cooperative, its successors, and assigns, hereinafter called "Grantee", for the full term of five (5) years from the effective date of this ordinance, the right, privilege, and franchise to have, acquire, construct, reconstruct, maintain, use, and operate in the CITY OF SANGER, Texas, hereinafter referred to as "Town", an electric power utility system, which shall include but not be limited to electric light, heat, power, and energy facilities, and a generation, transmission, and distribution system with such extensions thereof and additions thereto as shall hereafter be made; and to have, acquire, construct, reconstruct, maintain, use, and operate in, over, under, along, and across the present and future streets, highways, alleys, bridges, and public ways of the Town all necessary or desirable poles, towers, wires, cables, underground conduits, manholes, and other structures and appurtenances in connection with such electric power utility system. SECTION 2. CONSTRUCTION WORK - REGULATION BY TOWN (a) Work done in connection with the construction, reconstruction, maintenance, or repair of the utility system shall be subject to and governed by all laws, rules, and regulations of the Town and the state of Texas. (b) The placement of poles and excavations and other construction in the streets, alleys, and other public rights -of way shall interfere as little as practicable with the private property, in accordance with direction given by the authority of the governing body under the police and regulatory powers of the Town. SECTION 3. CONSTRUCTION AND MAINTENANCE; EXCAVATION (a) The construction, maintenance, and operation of Grantee's electric power utility system and property of Grantee subject to this franchise shall be subject to lawful police regulations of the governing body of the Town. The Town shall have power at any time to order and require Grantee to remove and abate any pole, wire, cable, or other structure that is unnecessarily dangerous to life or property, and in case Grantee, after notice, fails or refuses to act within a reasonable time, the Town shall have power to remove or abate the same at the expense of the Grantee, all without compensation or liability for damages to Grantee. Grantee shall promptly restore to as good condition as before working thereon, and to the reasonable satisfaction of the Town, all streets, alleys, and public rights -of way excavated by it. (b) Except in an emergency, the Grantee shall comply with applicable Town ordinances and rules pertaining to notification when excavating pavement in any alley, street, or unpaved public right-of-way. The Town shall be notified as soon as practicable regarding work performed under emergency conditions and Grantee shall comply with the Town's reasonable requirements for restoration of the excavated area. SECTION 4. JOINT USE OF POLES, TRENCHES, AND CONDUITS (a) The Grantee may be required to attach its wires to poles owned and maintained by another person or corporation, or to permit the wires of another public utility to be attached to the poles owned and maintained by the Grantee, upon reasonable terms and for just compensation including just compensation for any additional facilities of Grantee that may be required. In the event that Grantee and such other public utility are unable to agree on terms and compensation, or if same are not otherwise resolved or determined within a reasonable time, Town Manager or his designate, after due notice and a hearing, may prescribe terms and set compensation unless the setting of such compensation is beyond the jurisdiction of the Town. The Grantee may require such other public utility to furnish evidence of adequate insurance and provide indemnity covering the Grantee and adequate bonds covering the performance of such other public utility attaching to the Grantee's poles. Grantee's requirements for such insurance and indemnity must be reasonable. (b) Wires shall be located on poles in compliance with applicable safety standards. Grantee shall not be required to attach its wires to the poles of another public utility or to permit the wires of another public utility to be attached to Grantee's poles if it can be satisfactorily shown that Grantee will be subjected to increased risks of interruption of service or liability for accidents, or if the poles, wires, and appurtenances of such other public utility are not of the character, design, and construction required by or are not maintained in accordance with modern practice, or if sufficient clearance or space is not available on the pole. (c) Grantee may be required by the Town to share trench space for cables or ducts with another public utility for the placement of cables or wires underground. Compensation to the Grantee as well as terms of sharing trench space shall be resolved, as provided in subsection (a) of this Section. Also, Grantee may require insurance and indemnification, as provided in subsection (a) of this Section. Ducts, cables, or wires shall be placed in trenches in compliance with applicable safety standards and in a manner that does not interfere with Grantee's cables or wires. SECTION 5. UNDERGROUND CONDUITS AND POLES - USE BY TOWN If Grantee shall from time to time have spare ducts in its underground conduits or spare pins, crossarms, or space on any of its poles not needed for future anticipated load growth or emergencies, it shall permit the Town to use one such duct in each conduit or reasonable space on poles, or both, for the Town's police and fire alarm wires, traffic control wires or cable, or other similar, appropriate governmental use. If Grantee shall construct additional underground conduits or erect additional poles, the governing body of the Town may require the Grantee to provide one such duct in each conduit, or reasonable space on poles, or both, for the Town's use as aforesaid. In either event the Town shall pay Grantee for any additional facilities required plus a fair rental therefor. SECTION 6. CONFORMANCE WITH PUBLIC IMPROVEMENTS Whenever, by reason of the widening, straightening, or changes in the grade of any street it shall be deemed necessary by the governing body of the Town to remove, alter, change, adapt, or conform the underground or overhead facilities of Grantee, such alterations shall be made as soon as practicable by Grantee when ordered in writing by the Town, upon the furnishing of another right of way along said street by the Town to Grantee, without claim for reimbursement or damages against the Town. Provided, however, the if said requirements impose a financial hardship upon the Grantee, the Grantee shall have the right to present alternative proposals for the Town's consideration. Provided further that if such requirements involve the relocation of an existing underground transmission line of 60,000 volts or greater, the Grantee may charge the Town for the actual cost of such relocation. SECTION 7. WORK BY OTHERS (a) The Town serves the right to lay, and permit to be laid, sewer, gas, water, and other pipe lines, cables, and conduits, and to do and permit to be done any underground or overhead work that may be necessary or proper in, across, along, over, or under any street, alley, highway, easement or public place occupied by the Grantee, provided operational clearance and NESC compliance be maintained. The Town also reserves the right to change any curb or sidewalk of a street. In permitting such work to be done, the Town shall only reimburse the Grantee for actual damages so occasioned, but nothing herein shall prevent the Town from assessing responsibility for the payment of any damage to any other person or corporation. (b) In the event that the governing body of the Town authorizes someone other than the Grantee to occupy space under the surface of any street, alley, highway, or public place, such grant shall be subject to the rights herein granted or heretofore obtained by the Grantee. In the event that the governing body of the Town shall close or abandon any street, alley, highway, or public place which contains existing facilities of the Grantee, any conveyance of land within such closed or abandoned street, alley, highway, or public place shall be subject to the rights herein granted or heretofore obtained by Grantee; provided that the Grantee may be ordered to vacate any land so conveyed, if an alternate route is practicable, and if the Grantee is reimbursed by the person to whom the property is conveyed for the reasonable costs of removal and relocation of facilities. (c) If the Town shall require Grantee to adapt or conform its facilities, or in any way or manner to alter, relocate, or change its property to enable any other person or corporation, except the Town, to use, or use with greater convenience, said street, alley, highway, or public place, Grantee shall not be bound to make any such changes until such other person or corporation shall have undertaken, with good and sufficient bond, to reimburse the Grantee for any cost, loss, or expense which will be caused by, or arise out of such change, alteration, or relocation of Grantee's property. SECTION 8. AVAILABILITY, CHARACTER OF SERVICE Grantee shall at all times furnish service which is modern and sufficient to meet reasonable demands without undue interruption or fluctuations, under the rules and regulations set forth in Grantee's tariff, to any person, firm, or corporation that shall demand service within the Town; provided however, that it is not the intention of the parties hereto to create liability for the benefit of third parties but that this agreement shall be solely for the benefit of the parties hereto. SECTION 9. RESPONSIBILITY FOR ADMINISTRATION OF FRANCHISE (a) The Town Secretary is the principal Town officer responsible for the administration of this franchise and shall oversee and review the operations of Grantee under this franchise. (b) The Town Council may delegate to the Town Secretary the exercise of any of the powers conferred upon the Town by its Charter or by law relating to the supervising and regulating of Grantee in the exercise of the rights and privileges herein conferred, but the governing body of the Town reserves unto itself exclusively the power to fix and regulate the general charges and rates of Grantee, to the full extent that such power is provided in the Charter, this franchise and State law subject to Grantee's right of appeal as provided in the Public Utility Regulatory Act, as amended. The Town Council may approve or disapprove of miscellaneous fees and charges in connection with the rendition of utility service. The Town Secretary shall have the authority to make and publish, after notice and a hearing, such rules and regulations necessary to carry out the duties and powers conferred upon the Town as authorized by the Public Utility Regulatory Act, as amended. SECTION 10. RECORDS, REPORTS, AND INSPECTIONS (a) The Grantee shall use the system of accounts and the forms of books, accounts, records, and memoranda prescribed by the Public Utility Commission of Texas or any successor agency charged with regulating electric utilities. (b) Upon request the Grantee shall furnish the Town a copy of any report normally filed by Grantee with its other municipal regulatory authorities. (c) The Town Secretary shall have the right, at reasonable items, to inspect the plant, equipment, and other property of the Grantee, and to examine, audit, and obtain copies of the papers, books, accounts, documents, and other business records of the Grantee consistent with State law. (d) The Town shall retain all of the investigative powers and other rights provided to the Town by the Charter and State law. SECTION 11. RULES AND REGULATIONS (a) In order to insure uniform and reasonable application of conditions for service and to insure availability of service to all without discrimination, the Town Manager may exercise supervision of Grantee's application of the rules and regulations set forth in Grantee's tariff concerning service furnished under this franchise. (b) The Town Council may establish, after reasonable notice and hearing, such rules and regulations as may be in the public interest regarding rates, the furnishing of service, administration of customer accounts, and construction of Grantee facilities on Town property, subject to Grantee's rights of appeal under the Public Utility Regulatory Act, as amended. SECTION 12. SERVICE RATES (a) The Town Council hereby expressly reserves the right, power, and authority to fully regulate and fix the rates and charges for the services of the Grantee to its customers, fully reserving to the governing body all the rights, powers, privileges, and immunities, subject to the duties and responsibilities which the Constitution, the laws of the State, and the Charter confer upon the Town and subject to Grantee's rights of appeal under the Public Utility Regulatory Act, as amended. (b) Grantee may from time to time propose changes in its general rates by filing an application with the Town Secretary for consideration by the Town Council. Within a reasonable time consistent with law, the governing body shall afford Grantee a fair hearing with reference to the application and shall either approve or disapprove the proposed changes or make such order as may be reasonable. (c) In order to ascertain any and all facts, the Town Council shall have full power and authority to inspect, or cause to be inspected, the books of Grantee, and to inventory and appraise, or cause to be inventoried and appraised, the property of Grantee, and to compel the attendance of witnesses and the production of books and records, and to prescribe penalties for the failure or refusal of Grantee to testify or produce books and records as required by State law. (d) The Town Council of the Town has authority to require the Grantee to allocate costs of facilities, revenues, expenses, taxes, and reserves among service classifications consistent with State law. (e) Nothing contained in this ordinance or any section or subsection thereof shall be construed as to create a contractual right of the Town to regulate the rates or service rules and regulation of the Grantee or to create any power, authority, or jurisdiction of the Town to regulate or control the rates or service rules and regulations of the Grantee. The Town shall have only such regulatory power, authority, and jurisdiction respecting Grantee's rates, and service rules and regulations as may be provided by law. If the Public Utility Regulatory Act or other laws are amended or modified in such a way that the Town no longer has regulatory power, authority, and jurisdiction respecting Grantee's rates, or service rules and regulations, or either of them, then Grantee's rates and/or service rules shall be set by the Grantee's board of directors. SECTION 13. DEPOSITS Grantee shall have the right, subject to such rules and regulations in Grantee's approved tariff and consistent with applicable State or Federal law, regulations or rules, to require a reasonable security deposit for the payment of bills. SECTION 14. SUSPENSION OF SERVICE Subject to State, Federal and local laws, rules, and regulations and the rules regulations set forth in Grantee's tariff, the Grantee shall have the right to discontinue or suspend service to any customer who fails to pay a bill presented for service or make a reasonable deposit, as may be required until such bill together with any expense for disconnecting and reconnecting the service is paid. In addition, the Grantee may discontinue or suspend service without notice, for as long as the condition exists, where a known dangerous condition exists. The Grantee shall not be required to furnish service to any customer who is in default of payment or who fails to pay a reasonable deposit in accordance with the rules and regulations, set forth in Grantee's tariff, or who shall fail to comply with rules and regulations regarding proper use of facilities furnished by the Grantee; provided however, that nothing herein shall authorize Grantee to discontinue, suspend, or refuse to furnish service where Grantee is otherwise legally prohibited from taking such action. SECTION 15. FRANCHISE AND OTHER VIOLATIONS Upon evidence being received by the governing body of the Town that a violation of this franchise, Town Charter provision, or ordinance lawfully regulating Grantee in the furnishing of service hereunder is occurring or has occurred, it shall at once cause an investigation to be made. If the governing body of the Town finds that such a violation exists or has occurred, it shall take the appropriate steps to secure compliance. SECTION 16. COMPENSATION TO THE TOWN In consideration of the grant of said right, privilege and franchise by Grantor and as full payment for the right, privilege and franchise of using and occupying the said streets, alleys, highways and public grounds and ways, and in lieu of any and all occupation taxes, assessments, municipal charges, fees, easement taxes, franchise taxes, license and inspection fees or charges, street taxes, street or alley rentals and all other taxes, charges, levies, fees and rentals of whatsoever kind and character which Grantor may impose or hereafter be authorized or empowered to levy and collect, excepting only the usual general or special ad valorem taxes which Grantor is authorized to levy and impose upon real and personal property, Grantee shall pay to Grantor annually and on a quarterly basis of each year during the term hereof, beginning in February 1, 1998, a sum equal to four percent (40) of its gross revenues received by Grantee during the preceding-6welve (12) month period from the retail sale of electricity within the corporate limits of Grantor. On or before September 1 of each year a report shall be filed by Grantee with Grantor showing its gross revenues as aforesaid for the said preceding twelve-month (12) period and the payment made hereunder shall be based upon said report. The Grantee is hereby authorized to surcharge to customers within the Town all or any portion of the gross receipts assessment. All bills for services rendered within the Town shall be adjusted by the same percentage as the gross receipts assessment specified herein, less any percentage that is recovered by the Cooperative through base rates or other charges. Nothing in this franchise shall be construed to prohibit Town from levying the usual general or special ad valorem taxes which Town is authorized to levy and impose upon real and personal property, general sales and use tax, assessments for public improvements, and sums to which the Town may be entitled under Section 24 of the Public Utility Regulatory Act. SECTION 17. ASSIGNMENT OF FRANCHISE; PRESERVATION OF RECORDS (a) The Grantee shall be a legal entity with legal rights to operate, construct, reconstruct, and maintain an electric power and energy system in the Town. Grantee's primary and principal purpose shall be the provision of electric public utility service. (b) This grant shall not be assignable to another person, partnership, or corporation, unless said other person, partnership, or corporation is an affiliate of Texas Utilities Company, without the express consent, which shall not be withheld unreasonably, of the governing body of the Town, such consent to be evidenced by an ordinance that fully recites the terms and conditions, if any, upon which such consent is given. SECTION 18. CONFORMITY TO CONSTITUTION, STATUTES, CHARTER, AND TOWN CODE OF ORDINANCES This ordinance is passed subject to the applicable provisions of the Constitution and Laws of the State of Texas, the Charter of the CITY OF SANGER, and the Code of Ordinances of the CITY OF SANGER. This franchise agreement shall in no way affect or impair the rights, obligations, or remedies of the parties under the Public Utility Regulatory Act of Texas, or amendments thereto. SECTION 19. INDEMNITY Grantee shall indemnify and save whole and harmless the Town and all of its officers, agents, and employees from any and all claims for injury or damage to persons or property occasioned by, or arising out of the construction, maintenance, operation, or repair of the generation, transmission, or distribution system, or by the conduct of Grantee's business in the Town provided, however, nothing herein shall be construed to indemnify the Town against the Town's own negligence or fault. It is understood that it is not the intention of the parties hereto to create liability for the benefit of third parties, but that this agreement shall be solely for the benefit of the parties hereto. SECTION 20. NON-EXCLUSIVE This franchise is not exclusive, and nothing herein contained shall be construed so as to prevent Town from granting other like or similar rights, privileges, and franchises to any person, firm or corporation. SECTION 21. REPEAL That the Ordinance extending the franchise agreement between the CITY OF SANGER and Denton County Electric Cooperative adopted by the Town Council of the CITY OF SANGER on , be and the same is hereby specifically repealed. All other ordinances, rules, regulations, and agreements which in any manner relate to the regulation of or provision for electric utility services by Grantee shall remain in full force and effect until and unless duly modified pursuant to applicable State law. SECTION 22. EFFECTIVE DATE; AUTHENTICATION; TERM This ordinance shall take effect thirty (30) days after its passage on second reading and upon acceptance by Grantee in accordance with the provisions of the Charter of the CITY OF SANGER, and it is accordingly so ordained. This franchise shall continue for a period of five (5) years from the effective date. SECTION 23. ACCEPTANCE OF FRANCHISE; PUBLICATION (a) The grantee shall, within thirty (30) days form the passage of this ordinance, file in the office of the Town Secretary a written instrument signed and acknowledged by a duly authorized officer, in substantially the following form: To the Honorable Mayor and Town Council of the CITY OF SANGER: The Grantee, Denton County Electric Cooperative acting by and through the undersigned authorized officer, hereby accepts Ordinance No. 16_97 granting a franchise to Denton County Electric Cooperative. _ A thorized Representative DENTON COUNTY ELECTRIC COOPERATIVE ATTEST: S retary Executed this, the 17'h day of (b) The acceptance shall be duly acknowledged by the person executing the same. In the event the acceptance is not filed within the thirty (30) day period, this ordinance and the rights and privileges hereby granted shall terminate and become null and void. PASSED AND APPROVED this the 1st day of December 1 1997. THE CITY OF S ZNGER, TEXAS Mayor ATTEST: 01F S'A4f,%', .......... Town By Secretary 0 a 0• 9 1 a N 4010 By Tow Attorney CITY OF SANGER ORDINANCE NO. 16 - 97 AN ORDINANCE GRANTING TO DENTON COUNTY ELECTRIC COOPERATIVE, INC. ("Cooperative") A TEXAS CORPORATION, ITS SUCCESSORS AND ASSIGNS, THE RIGHT, PRIVILEGE AND FRANCHISE TO USE THE PRESENT AND FUTURE STREETS, AVENUES, ALLEYS, ROADS, HIGHWAYS, SIDEWALKS, EASEMENTS AND OTHER PUBLIC RIGHTS - OF -WAY OF THE CITY OF SANGER, TEXAS ("City") CERTIFICATED BY THE PUBLIC UTILITY COMAUSSION OF TEXAS TO THE COOPERATIVE FOR CONSTRUCTION AND OPERATION OF ITS ELECTRIC DISTRIBUTION SYSTEM; REGULATING THE USE OF THE STREETS BY SAID COOPERATIVE AND THE REPAIR AND RESTORATION OF STREETS DISTURBED BY CONSTRUCTION; PROVIDING FOR THE TEMPORARY REMOVAL, RAISING AND LOWERING OF CABLES AND OTHER EQUIPMENT AND MATERIAL; PROVIDING FOR COMPENSATION TO BE PAID TO THE CITY; PROVIDING THAT THIS FRANCHISE SHALL NOT BE EXCLUSIVE; PROVIDING A SEVERABILITY CLAUSE; RESERVING ALL POWERS OF REGULATION; PROVIDING FOR INDEMNITY BY THE COOPERATIVE TO THE CITY; MAKING MISCELLANEOUS PROVISIONS RELATIVE TO THIS GRANT OF FRANCHISE; PROVIDING FOR ACCEPTANCE BY THE COOPERATIVE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Cooperative, a Texas corporation, is now and has been engaged in the electric utility business in the State of Texas and, in furtherance thereof, has erected and maintained certain items of its physical plant in the City pursuant to such rights as may have been granted it by and under the laws of the State of Texas, and subject to the reasonable exercise of the police powers granted by and under the said laws to the City; and WHEREAS, it is hereby found and determined by the City Council of the City that it is in the best interest of the City that a franchise be awarded to the Cooperative stating the agreement between the Cooperative and the City under which the Cooperative may use the streets, alleys and other public rights of way to maintain and construct its physical plant in the City; and WHEREAS, the City Council finds that this Cooperative fully meets all the legal, character, financial, and technical qualifications, as well as all other qualifications necessary to assure adequate and reliable electric utility service is provided to its customers within the City; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER, TEXAS THAT: Section 1. DEFINITIONS. For the purpose of this ordinance the following terms phrases, words, abbreviations and their derivations shall have the meaning given herein. When not; inconsistent with the context, words used in the present tense include the 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 always mandatory, and not merely directory. A. "Anniversary Date" shall mean the date on which this franchise is accepted by the Cooperative. B. "City" shall mean the City of Sanger , Texas, a (home -rule OR general law) municipal corporation. C. "Electric Distribution System" shall mean the Cooperative's system of cables, wires, lines, poles, towers, anchors, guy wires, insulators, transformers, substations, conduits, ducts, and any associated equipment, or plant, or other facilities designed and constructed for the purpose of producing, transmitting or distributing electricity to or from customers or locations within the City, as the same now exists and may from time to time be placed, removed, constructed, reconstructed, extended and maintained. D. "Cooperative" shall mean Denton County Electric Cooperative, Inc., a Texas corporation, its successors and assigns. E. "Gross Receipts" shall mean the annual receipts collected by the Cooperative from its customers for the sale of electric energy to business and residential customers within the corporate boundaries of the City. (Tax Code § 182.025) F. "Public Utility Commission Of Texas" or "PUC" shall mean that agency as presently constituted by the laws of the State of Texas or any successor agency. Section 2. GRANT OF AUTHORITY. Subject to the terms, conditions and provisions of this ordinance, the right, privilege and franchise is hereby extended and granted to the Cooperative, its successors and assigns to use the present and future streets, avenues, roads, highways, sidewalks, alleys, easements and other public rights of way of the City for all uses associated with the provision or termination of electric utility service including the construction, reconstruction, upgrade, maintenance and operation of its Electric Distribution System in accordance with the terms of this franchise agreement, within the City's corporate limits, as the same are now and as the same may be from time to time extended. The right, privilege and franchise granted hereunder are granted subject to the existing charter and ordinances of the City, and are subject to such lawful changes by charter provision or ordinance as may be necessary to the public health and safety by the city in the exercise of its lawful police powers. Section 3. TERM OF FRANCHISE. Upon the filing with the City by the Cooperative of the acceptance required herein, this franchise shall be in full force and effect for an initial term of five (5) years from the effective date of this ordinance continuing and so long thereafter until terminated by either Grantee or City giving twelve months written notice. Section 4. CONSTRUCTION AND MAINTENANCE OF ELECTRIC DISTRIBUTION SYSTEM. The Cooperative may construct new facilities on city streets, easements or rights -of -way. All poles to be placed shall be so set that they will not unreasonably interfere with the flow of water in any gutter or drain, and so located that the same will interfere as little as practicable with the ordinary travel on the street or sidewalk and so as not to unreasonably obstruct visibility at public street intersections. The location and route of all poles, stubs, guys, anchors, conduits and cables placed and constructed and to be placed and constructed by the Cooperative in the construction and maintenance of its Electric Distribution System in the City, and the location of all conduits laid and to be laid by the Cooperative within the limits of the City shall be subject to the lawful, reasonable and proper regulation. The cooperative will give reasonable consideration to requests by the City to relocate underground any of its aerial facilities or place new facilities underground. Section 5. CONDITIONS OF STREET OCCUPANCY. A. Use. All structures, poles, and facilities erected or maintained by the Cooperative on streets, alleys, avenues, highways or other public rights of way within the City shall be located so as not to cause unreasonable interference with the use of the streets and with the rights of the owners or occupiers of property which adjoins any of such streets. B. Restoration. That portion of the surface of any street disturbed by the Cooperative in laying, constructing, maintaining, operating, using, extending, removing, replacing or repairing its Electric Distribution System shall be restored by the Cooperative as soon as practicable after the completion of the work at its cost and expense to as good a condition as before the commencement of the work, and the Cooperative shall maintain the restoration work to the reasonable satisfaction of the City for one year from the date of completion of such restoration work. No street shall be encumbered by construction, maintenance, removal, restoration or repair work by the Cooperative for a longer period than shall be reasonably necessary to execute such work. If there is an unreasonable delay by the Cooperative in restoring and maintaining streets after such excavations or repairs have been made, the City shall have the right without further notice to restore or repair the same and to require the Cooperative to pay the reasonable cost of such restoration or repair. C. Relocation. Whenever by reason of the construction, repair, maintenance, relocation, widening, raising or lowering of the grade of any street by the City or by the location or manner of construction, reconstruction, maintenance or repair of any public property, structure or facility by the City, it shall be necessary for the Cooperative to move, relocate, change, alter or modify any of its poles, facilities or structures located on streets, alleys or public rights of way owned by the City, such change, relocation, alteration or modification as shall be necessary shall be made by the Cooperative, at its cost and expense, reasonably promptly after Cooperative is directed in writing to do so by the City, without claim for or right of reimbursement of cost or damages against the City. Nothing contained in this Section shall affect the right of the Cooperative to make claims, including claims for costs or damages, in the event the City requires or requests the Cooperative to move, relocate, change, alter, or modify any of its property located in easements or property owned by the Cooperative. In the event the City is considering relocation of Cooperative facilities located in private easements owned by the Cooperative, then the City shall first provide a description of the facilities, their location and relocation and request an estimate of the costs for relocation. The Cooperative shall estimate the costs of relocation within 45 days. If the City requests the Cooperative to relocate its facilities, then, to the extent such facilities are located in easements or property owned by the Cooperative, the City shall pay within thirty (30) days of invoice the Cooperative's estimate of costs. D. Temporary Raising or Lowering of Wire for Building Moving. Upon written request of any person holding a building moving permit issued by the City, the Cooperative shall raise, or lower its wires and cables temporarily to permit the moving of houses, buildings or other bulky structures. The reasonable expense of such temporary raising or lowering shall be paid by the benefited person, and the Cooperative may require such payment in advance, the Cooperative being without obligation to raise, or lower its wires and cables until such payment shall have been made. The Cooperative shall be given not less than seventy-two (72) hours advance written notice to arrange for such temporary wire and cable adjustments, E. Tree Trimming. The City Council may, from time to time, pass ordinances regulating the trimming or removal of trees on or along City property, however, reasonable tree trimming and vegetation control shall be allowed. F. Placement of Fixtures. The Cooperative shall not place poles, towers or similar fixtures where the same will unduly interfere with any gas, electric, or telephone fixture, water hydrant or main, drainage facility or sanitary sewer, and all such poles, towers and similar facilities shall be placed in such manner as not to unreasonably interfere with the usual travel or use of the streets. G. Use of Poles and Ducts. Nothing contained in this franchise shall be construed to require or permit any pole attachments for electric light or power wires or communications facilities or systems not provided by the Cooperative to be attached to the Cooperative's poles or other physical plant by the City, or for the City, nor to require or permit any electric light or power wires or communications facilities or systems not provided by the Cooperative to be placed in any duct in the Cooperative's conduit by the City or for the City. If the City desires pole attachments for electric light or power wires or communications facilities or systems not provided by the Cooperative, or if the City desires to place electric light or power wires or communications facilities or systems not provided by the Cooperative in any Cooperative duct, then a further separate, noncontingent agreement shall be prerequisite to such attachments or such use of any duct by the City. Section 6. INDEMNIFICATION AND LIABILITY FOR DAMAGES. The Cooperative shall pay, and by its acceptance of this franchise specifically agrees that it will pay, the following: A. Damages and Penalties. All damages and penalties which the City, its officers, agents or employees, may legally be required to pay as a result of damages arising out of the installation, maintenance, or operation by the Cooperative of its Electric Distribution System within the public rights of way of the City, whether or not any act or omission complained of is authorized, allowed, or prohibited by this franchise; and B. Expenses. All expenses incurred by the City in defending itself, its officers, agents or employees, against any and all claims for damages or penalties described in Section 6.A provided the City gives the Cooperative prompt notice of any such claim and the opportunity to defend such claim. These expenses shall include all out-of-pocket expenses, such as, but not limited to, attorney fees, expert witness fees and court costs and shall also include the reasonable value of any services rendered by any officers or employees of the City. C. It is the intent of this section and by its acceptance of this franchise the Cooperative specifically agrees that the Cooperative shall indemnify and hold the City, its officers, agents and employees, harmless from all liability, damage, cost or expense arising from claims for injury to persons, damage to property or penalties to the extent caused by any conduct of Cooperative undertaken by reason of this franchise. The City shall not and does not by reason of the granting of this franchise assume any liability of the Cooperative whatsoever for injury to persons, damage to property or penalties. D. This provision is not intended to create a cause of action or liability for the benefit of third parties, but is solely for the benefit of the Cooperative and the City. Section 7. LIABILITY INSURANCE A. Minimum Coverage. Within thirty (30) days after the effective date of this franchise, the Cooperative shall file with the City Manager and shall maintain throughout the term of this franchise a policy of comprehensive general insurance, including an endorsement for contractual liability, issued by an insurance company duly authorized to do business in the State of Texas insuring the City and the Cooperative with respect to the installation, maintenance, and operation of the Cooperative's Electric Distribution System. The amounts designated herein are minimum requirements and do not establish the limits of the franchisee's liability: 1) Comprehensive General Liability: One Million Dollars ($1,000,000.00) combined single limit per occurrence for bodily injury, personal injury and property damage. 2) Automobile Liability: One Million Dollars ($1,000,000.00) combined single limit per accident for bodily injury and property damage. 3) Worker's Compensation and Employers Liability: 4) Workers' Compensation limits statutory for the State of Texas and Employers Liability limits of One Million Dollars ($1,000,000.00) per accident. 5) Excess and Umbrella Liability Insurance in a form following the underlying coverages in an amount of One Million Dollars ($1,000,000.00) each occurrence and One Million Dollars ($1,000,000.00) aggregate. B. Notice of Cancellation or Reduction. Such liability insurance shall contain the provisions that written notice of expiration, cancellation, reduction or material change in coverage of the policy shall be delivered to the City Manager and to the Cooperative at least thirty (30) days in advance of the effective date thereof. C. Term. Such liability insurance shall be kept in full force and effect by the Cooperative during the existence of this franchise and thereafter for a period of not less than 12 months. Section 8. UNDERGROUND INSTALLATION. In portions of the City having all telephone lines and electric utility lines underground, as required by ordinance, any and all of the Cooperative's lines, cables and wires installed after the date of such ordinances shall also be buried. This provision does not affect the existing Electric Distribution System or any substitutions or replacements. Section 9 GOVERNING LAW; LIMITATIONS; COMPLIANCE. A. Governing Law. This ordinance shall be construed in accordance with the City Charter and City Code in effect on the Effective Date of this ordinance to the extent that such charter and code are not in conflict with or in violation of the constitution and Laws of the United States or the State of Texas. B. Limitations. This ordinance shall be governed by and construed in accordance with the laws of the State of Texas. Should either party desire to pursue any claim or cause of action against the other relating to this ordinance, notwithstanding any provisions of any law, the party desiring to assert such claim or cause of action must do so in a form with appropriate jurisdiction within four years of the date that such claim or cause of action first arose or said claim or cause of action shall be forever barred. C. Compliance. Notwithstanding any other provision of this franchise to the contrary, the City and the Cooperative shall at all times comply with all laws, rules and regulations of the state and federal government and any administrative agencies thereof, with respect to the subject matter of this ordinance. Section 10. PAYMENT TO THE CITY. A. In consideration for the rights and privileges herein granted, the administration of this franchise by the City, the temporary interference with the use of public rights of way and other costs and obligations undertaken by the City herein, the Cooperative hereby agrees to pay to the City during the term of this franchise a sum of money equal to four percent (4%) of annual Gross Receipts as herein defined. Franchise fee payments shall be paid quarterly on or before each May 1, August 1, November 1, and February 1 for the most recently ended calendar quarter. The Cooperative shall file with the City Manager within thirty (30) days after the expiration of each quarter of each calendar year, or portion thereof during which this franchise is in effect, a statement showing in reasonable detail the Gross Receipts collected during the preceding quarter of the calendar year. Such statement shall be accompanied by the cooperative's payment to City of four percent (4%) of the Gross Revenue for such quarter. An interest charge shall be assessed on a franchise fee payment not paid on the due date at the rate of ten percent (10%) per year for each day that the franchise fee payment is late, and a check for the interest due shall accompany the late franchise fee payment. The Grantee is hereby authorized to surcharge to customers within the City all or any portion of the gross receipts assessment. All bills for services rendered within the City shall be adjusted by the same percentage as the gross receipts assessment specified herein, less any percentage that is recovered by the Cooperative through base rates or other charges. The consideration set forth in this section shall be paid and received in lieu of any other license, charge, fee, street or alley rental, or other character of charge for use and occupancy of the streets, alleys and public places of the City and in lieu of any pole tax or inspection fee tax or other tax, any lawful permit, inspection or other fee whether charged to the Cooperative or any of its contractors; and any imposition other than the usual general ad valorem taxes, special assessments to abutting landowners or sales taxes now or hereafter lawfully levied. Section 11. RECORDS AND REPORTS. A. Book of Account. The Cooperative shall keep complete end accurate books of accounts and records of its business and operations from which Gross Receipts may be determined. To the extent practicable, copies of relevant portions of such books of accounts and records shall be made available at the Cooperative's office nearest to the City upon reasonable request. B. Access by City. The City Manager or his duly designated officers, agents, or representatives, shall have access to all books of accounts and records of the Cooperative relating to this franchise as reasonably needed to determine the accuracy of any and all reports relating to your receipts to the City. Any confidential or proprietary matters disclosed to the City shall be held in confidence and disclosed only as needed to enforce the City's rights under this ordinance. Section 12. AREA OF THE CITY AFFECTED. A. This franchise shall extend to and include any and all territory that is within the corporate limits that have been certificated to the Cooperative by the Public Utility Commission of Texas. The territory is more particularly described in Exhibit "A," attached hereto and incorporated herein by reference. B. Additionally, this franchise shall extend to any and all territory which is annexed by the City during the term of this franchise and certificated to the Cooperative by the Public Utility Commission of Texas. In the event of disannexation, this franchise shall be reduced to the territory that continues to be in the City. C. The City shall promptly furnish the Cooperative with maps of the affected franchise area in the event of an annexation or disannexation. Within sixty (60) days from the date such maps are furnished, the Cooperative shall identify all customers located within such annexed or disannexed territory and adjust its accounting system accordingly. For the purposes of calculating Gross Receipts, customers, if any, included within an annexed area shall be deemed to commence 60 days from the date the City furnishes the maps to the Cooperative. Section 13. NON-EXCLUSIVE FRANCHISE. Nothing contained in this ordinance shall ever be construed as conferring upon the Cooperative any exclusive rights or privileges of any nature whatsoever. Section 14. DEFAULT; REMEDIES. In addition to all rights and powers of the City by virtue of this franchise or otherwise, the City reserves the rights to terminate and cancel this franchise in accordance with the following provisions: A. Violation of Provisions. This franchise may be terminated by the City in the event the Cooperative shall by act or omission materially violate any term, condition or provision of this franchise and shall fail or refuse to effect compliance within thirty (30) days following written demand by the city to do so. B. Method of Termination and Cancellation. Any such termination and cancellation of this franchise shall be by ordinance adopted by City Council; provided, however, before any such ordinance is adopted, the Cooperative shall be given at least thirty (30) days' advance written notice, which notice shall set forth the causes and reasons for the proposed termination and cancellation, shall advise the Cooperative that it will be provided an opportunity to be heard by City Council regarding such proposed action before any such action is taken, and shall set forth the time, date, and place of the hearing. In no event shall such hearing be held less than thirty (30) days following delivery of such notice to the Cooperative. C. Force Maieure. Other than its failure, refusal or inability to pay its debts and obligations, including, specifically, the payments to the City required by this franchise, the Cooperative shall not be declared in default or be subject to a sanction under any provision of this franchise in those cases in which performance of such provision is prevented by reasons beyond its reasonable control. Section 15. RATE REGULATION; RESERVE OF REGULATORY POWERS; RESERVE OF LEGAL RIGHTS. A. Rate Regulation. It is understood that the Cooperative has elected to be exempt from rate regulation as provided in Section 2.2011 of the Public Utility Regulatory Act of 1995. The City shall have only such regulatory power, authority, and jurisdiction respecting the Cooperative's rates, if any, as may be provided by law. B. Regulatory Powers. The City by the granting of this franchise does not render or to any extent lose, waive impair, or lessen the lawful powers and rights, now or hereafter vested in the City under the Constitution and statutes of the State of Texas and under the Charter of the City, to regulate the use of the streets by the Cooperative. C. Legal Rights. The Cooperative by accepting this franchise does not surrender or to any extent lose, waive, impair or lessen the lawful powers and rights now or hereafter vested in the Cooperative under the constitution and the statutes of the State of Texas and or the United States of America. Section 16. GOVERNMENTAL FUNCTION. All of the lawful regulations and activities required by this franchise are hereby declared to be governmental and for the health, safety, and welfare of the general public. Section 17. ASSIGNMENT. This franchise may be assigned by the Cooperative upon ninety (90) days advance written notice to the City. Section 18. PUBLICATION COST. In compliance with the provisions of Article Section of the City Charter, the Cooperative shall pay the cost of those publications of this franchise required by such Charter provisions. Section 19. ACCEPTANCE. The Cooperative shall, within thirty (30) days from the date franchise takes effect, file with the City Secretary of the City a written statement signed in its name and behalf in substantially the following form; "To the Honorable Mayor and City Council" Denton County Electric Cooperative, Inc., for itself, successors and assigns, hereby accepts the attached Franchise and agrees to be bound by all of its terms and provisions. Denton County Electric Cooperative, Inc. Dated: day of , 19 Y Section 20. SEVERABILITY. If any provisions, section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be unconstitutional, void, or invalid (or for any reason unenforceable), to the extent practicable, the validity of the remaining portions of this franchise shall not be affected thereby, it being the intent of the City in adopting this ordinance that so long as practicable no portion hereof or provision hereof shall become inoperative or fail by reason of any unconstitutionality or invalidity of any other portion, provision, or regulation, and to this end, all provisions of this ordinance are declared to be severable. If a modification of this ordinance by severance of valid provisions from invalid provisions results in an ordinance that is not practicable, in the opinion of either party, then the parties agree to meet promptly and discuss any necessary amendments or modifications to this ordinance. If the parties are unable to agree on necessary amendments or modifications within a reasonable period of time, then this ordinance may be terminated by either party by providing thirty (30) days' written notice to the other. Section 21. PASSAGE AND EFFECTIVE DATE. This franchise, having been published as required by Article , Section of the City Charter shall take effect and be in force from and after thirty (30) days following its final passage and approval. APPROVED this 1st day of December A.D. 1997.