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GAS ORDINANCE
ORDINANCE NO.385
CITY OF MEDINA, HENNEPIN COUNTY, MINNESOTA
AN ORDINANCE GRANTING CENTERPOINT ENERGY RESOURCES CORP., DB/A
CENTERPOINT ENERGY MINNESOTA GAS, ("CENTERPOINT ENERGY"), ITS
SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT,
OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE
TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY
FOR PUBLIC AND PRIVATE USE AND TO USE THE PUBLIC WAYS AND GROUNDS
OF THE CITY OF MEDINA, MINNESOTA, FOR SUCH PURPOSE; AND,
PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF.
THE CITY COUNCIL OF THE CITY OF MEDINA, HENNEPIN COUNTY,
MINNESOTA, ORDAINS:
SECTION 1. DEFINITIONS.
For purposes of this Ordinance, the following capitalized terms listed in alphabetical order
shall have the following meanings:
City. The City of Medina, County of Hennepin, State of Minnesota.
City Utility System. Facilities used for providing public utility service owned or operated
by City or an agency thereof, including sewer, storm sewer, water service, street lighting and traffic
signals, but excluding facilities for providing heating, lighting, or other forms of energy.
Commission. The Minnesota Public Utilities Commission, or any successor agency or
agencies, including an agency of the federal government, that preempts all or part of the authority to
regulate gas retail rates now vested in the Minnesota Public Utilities Commission.
Company. CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas
("CenterPoint Energy") a Delaware corporation, its successors and assigns including all successors
or assigns that own or operate any part or parts of the Gas Facilities subject to this franchise.
Gas Facilities. Gas transmission and distribution pipes, lines, ducts, fixtures, and all
necessary equipment and appurtenances owned or operated by the Company for the purpose of
providing gas energy for public or private use.
Gas. Natural gas, manufactured gas, mixture of natural gas and manufactured gas or other
forms of gas energy.
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Non -Betterment Costs. Costs incurred by Company from relocation, removal or
rearrangement of Gas Facilities that do not result in an improvement to the Gas Facilities.
Notice. A writing served by any party or parties on any other party or parties. Notice to
Company shall be mailed to CenterPoint Energy Minnegasco, V.P., Regulatory & Supply Service,
800 LaSalle Avenue, Minneapolis, MN 55402-2006. Notice to the City shall be mailed to the City
Administrator, City of Medina, 2052 County Road 24, Medina, MN 55340-9790. Either party may
change its address for the purpose of this Ordinance by written notice to the other party.
Public Way. Public right-of-way within the City as defined in Minn. Stat. § 237.162,
subd. 3.
Public Ground. Land owned or otherwise controlled by the City for park, open space or
similar public purpose, which is held for use in common by the public.
SECTION 2. ADOPTION OF FRANCHISE.
2.1. Grant of Franchise. City hereby grants Company, for a period of 20 years from the
date this Ordinance is passed and approved by the City, the right to import, manufacture, distribute
and sell gas for public and private use within and through the limits of the City as its boundaries
now exist or as they may be extended in the future. This right includes the provision of Gas that is
(i) manufactured by the Company or its affiliates and delivered by the Company, (ii) purchased and
delivered by the Company or (iii) purchased from another source by the retail customer and
delivered by the Company. For these purposes, Company may construct, operate, repair and
maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject
to the provisions of this Ordinance. Company may do all reasonable things necessary or customary
to accomplish these purposes, subject however, to such lawful regulations as may be adopted by
separate ordinance and as currently exist under Medina City Code Section 410 (the "Right -of -Way
Ordinance"). The Company shall be notified 60 days in advance of enactment of changes to the
Right -of -Way Ordinance. If a provision of the Right -of -Way Ordinance conflicts with a provision
on the same subject in this Ordinance, this Ordinance will control.
2.2. Service and Gas Rates. The service to be provided and the rates to be charged by
Company for gas service in City are subject to the jurisdiction of the Commission
2.3. Publication Expense. The expense of publication of this Ordinance shall be paid
by Company.
2.4. Dispute Resolution. If either party asserts that the other party is in default in the
performance of any obligation hereunder, the complaining party shall notify the other party of the
default and the desired remedy. The notification shall be written. Representatives of the parties
must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute
is not resolved within 30 days of the written notice, the parties may jointly select a mediator to
facilitate further discussion. The parties will equally share the fees and expenses of this mediator.
If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first
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meeting with the selected mediator, either party may commence an action in District Court to
interpret and enforce this franchise or for any other relief permitted by law.
2.5. Continuation of Franchise. If the City and the Company are unable to agree on the
terms of a new franchise by the time this franchise expires, this franchise will remain in effect until
a new franchise is agreed upon, or until 90 days after the City or the Company serves written Notice
to the other party of its intention to allow the franchise to expire.
SECTION 3. LOCATION, OTHER REGULATIONS.
3.1. Location of Facilities. Subject to regulation under the Right -of -Way Ordinance,
Gas Facilities in the Public Way shall be located, constructed, and maintained so as not to disrupt
normal operation of any City Utility System. Gas Facilities may be located on Public Grounds as
determined by the City.
3.2. Restoration of Public Ways and Public Ground. Restoration of the Public Way
shall be subject to the Right -of -Way Ordinance. After completing work requiring the opening of
Public Ground, the Company shall restore the Public Ground to as good a condition as formerly
existed, and shall maintain the surface in good condition for six (6) months thereafter. All work
shall be completed as promptly as weather permits. If Company shall not promptly perform and
complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in
the said condition and after demand to Company to cure, City shall, after passage of a reasonable
period of time following the demand, but not to exceed ten days, have the right to make the
restoration of the Public Ground at the expense of Company. Company shall pay to the City the
cost of such work done for or performed by the City. This remedy shall be in addition to any other
remedy available to the City for noncompliance with this Section.
3.3. Waiver of Performance Security. The City hereby waives any requirement for
Company to post a construction performance bond, certificate of insurance, letter of credit or any
other form of security or assurance that may be required under the Right -of -Way Ordinance. The
City reserves the right to require that the Company provide such security upon the City's adoption
of a resolution identifying the reasonable basis for requiring such security. The City further
reserves all other rights under the Right -of -Way Ordinance to enforce Company performance
requirements for work in the Public Way or Public Ground.
3.4. Avoid Damage to Gas Facilities. Nothing in this Ordinance relieves any person
from liability arising out of the failure to exercise reasonable care to avoid damaging Gas Facilities
while performing any activity.
SECTION 4. RELOCATIONS.
4.1. Relocation of Gas Facilities. Relocation of Gas Facilities in Public Ways shall be
subject to the Right -of -Way Ordinance. City may require Company at Company's expense to
relocate or remove its Gas Facilities from Public Grounds upon a finding by City that the Gas
Facilities have become or will become a substantial impairment to the existing or proposed public
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use of the Grounds. Relocation Gas Facilities in Public Ground shall comply with applicable City
ordinances consistent with law.
4.2. Projects with Federal Funding. Relocation, removal, or rearrangement of any
Company Gas Facilities made necessary because of the extension into or through City of a
federally -aided highway project shall be governed by the provisions of Minnesota Statutes
Section 161.46, as supplemented or amended.
4.3. No Waiver. The provisions of this Section 4 apply only to Gas Facilities
constructed in reliance on a permit or franchise from City, and Company does not waive its rights
under an easement or prescriptive right or State or County permit.
SECTION 5. CHANGE IN FORM OF GOVERNMENT.
Any change in the form of government of the City shall not affect the validity of this
Ordinance. Any governmental unit succeeding the City shall, without the consent of Company,
succeed to all of the rights and obligations of the City provided in this Ordinance.
SECTION 6. FRANCHISE FEE.
6.1. Reservation of Rights. The City reserves all rights under Minn. Stat. § 216B.36 to
require a franchise fee at any time during the term of this franchise. Any such fee shall be in
addition to permit fees required by the Right -of -Way Ordinance.
6.2. Fee Amount. The franchise fee may be (i) a percentage of gross revenues received
by the Company from its operations within the City, or (ii) a flat fee per customer based on metered
service to retail customers within the City or on some other similar basis, or (iii) a fee based on
units of energy delivered to any class of retail customers within the corporate limits of the City.
The method of imposing the franchise fee, the percentage of revenue rate, or the flat rate based on
metered service may differ for each customer class or combine the methods described in (i) — (iii)
above in assessing the fee. The City shall seek to use a formula that provides a stable and
predictable amount of fees, without placing the Company at a competitive disadvantage. If the
Company claims that the City required fee formula is discriminatory or otherwise places the
Company at a competitive disadvantage, the Company shall provide a formula that will produce a
substantially similar fee amount to the City and reimburse the City's reasonable fees and costs in
reviewing and implementing the formula. The City will attempt to accommodate the Company but
is under no franchise obligation to adopt the Company -proposed franchise fee formula.
6.3. Separate Ordinance. The franchise fee shall be imposed by separate ordinance
duly adopted by the City Council, which ordinance shall not be adopted until at least thirty (30)
days after the proposed ordinance has been mailed to the Company by certified mail. The fee shall
become effective sixty (60) days after the adopted ordinance has been mailed to the Company by
certified mail.
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6.4. Condition of Fee. The separate ordinance imposing the fee shall not be effective
against the Company unless it lawfully imposes a fee of the same or substantially similar amount on
the sale of gas energy within the City by any other gas energy supplier, provided that, as to such
supplier, the City has the authority or contractual right to require a franchise fee or similar fee
through a previously agreed upon franchise.
6.5. Collection of Fee. The franchise fee shall be payable not less than quarterly during
complete billing months of the period for which payment is to be made. The franchise fee formula
may be changed from time to time, however, the change shall meet the same notice requirements
and the fee may not be changed more often than annually. Such fee shall not exceed any amount
that the Company may legally charge to its customers prior to payment to the City. Such fee is
subject to subsequent reductions to account for uncollectibles and customer refunds incurred by the
Company. The Company agrees to make available for inspection by the City at reasonable times all
records necessary to audit the Company's determination of the franchise fee payments.
6.6. Continuation of Franchise Fee. If this franchise expires and the City and the
Company are unable to agree upon terms of a new franchise, the franchise fee, if any being imposed
by the City at the time this franchise expires, will remain in effect until a new franchise is agreed
upon.
SECTION 7. LIMITATION ON APPLICABILITY; NO WAIVER.
This Ordinance constitutes a franchise agreement between the City and its successors and
the Company and its successors and permitted assigns, as the only parties. No provision of this
franchise shall in any way inure to the benefit of any third person (including the public at large)
so as to constitute any such person as a third party beneficiary of the agreement or of any one or
more of the terms hereof, or otherwise give rise to any cause of action in any person not a party
hereto. This franchise agreement shall not be interpreted to constitute a waiver by the City of any
of its defenses of immunity or limitations on liability under Minnesota Statutes, Chapter 466.
SECTION 8. AMENDMENT PROCEDURE.
Either party to this franchise agreement may at any time propose that the agreement be
amended. This Ordinance may be amended at any time by the City passing a subsequent ordinance
declaring the provisions of the amendment, which amendatory ordinance shall become effective
upon the filing of Company's written consent thereto with the City Administrator within 60 days
after the effective date of the amendatory ordinance.
SECTION 9. PREVIOUS FRANCHISES SUPERSEDED.
This franchise supersedes and replaces previous franchises granted to the Company or its
predecessors. Upon Company acceptance of this franchise under Section 2.2, the previous
franchise shall terminate.
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SECTION 10. EFFECTIVE DATE.
This franchise Ordinance shall be effective upon passage and publication as required by
law, and acceptance by Company. If Company does not file a written acceptance with the City
within 90 days after the date the City Council adopts this Ordinance, or otherwise places the City on
written notice, at any earlier time, that the Company does not accept all terms of this franchise, the
City Council by resolution may either repeal this Ordinance or seek its enforcement in a court of
competent jurisdiction.
Adopted by the City Council of the City of Medina this 17th day of May, 2005.
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Bru e . Workman, Mayor
Attest:
Chad M. Adams, Administrator -Clerk
Published in the South Crow River News on the 20th day of June, 2005.
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