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HomeMy Public PortalAboutORD-CC-2008-361 fl Ordinance 2008-36 AN ORDINANCE GRANTING TO QUESTAR GAS COMPANY A FRANCHISE FOR THE CONSTRUCTION, OPERATION AND MAINTENANCE OF A NATURAL GAS DISTRIBUTION SYSTEM IN MOAB CITY, GRAND COUNTY, STATE OF UTAH. WHEREAS, Questar Gas Company, a Utah corporation, (Questar Gas) desires to construct, maintain and operate a gas distribution system within the City of Moab (City); and WHEREAS, The Moab City Council has determined that it is in the best interest of the citizens of the City to grant a franchise to Questar Gas to use the roads and streets within the City for such purpose; NOW, THEREFORE, the City Council ordains as follows: 1. Grant of Franchise. The City grants to Questar Gas a nonexclusive franchise (Franchise) to construct, maintain and operate in the present and future roads, streets, alleys, highways and other public rights -of -way within City limits, including any property annexed or otherwise acquired by the City after the effective date of this Franchise, (collectively, Streets) a distribution system for furnishing natural and manufactured gas to the City and its inhabitants for heating and other purposes. Questar Gas shall have the right to erect, construct, equip and maintain along, over and under the Streets a system of mains, pipes, laterals and related equipment (Facilities) as are reasonably necessary for supplying gas service in accordance with this Franchise. 2. Consideration. In consideration of this Franchise, Questar Gas shall pay to City the sum of $50.00 upon acceptance of this Franchise and shall provide gas service in accordance with the terms of this Franchise. 3. Term. This Franchise is granted for a term of fifteen (15) years. At the expiration of the initial term, the Franchise shall continue in effect upon the same terms and conditions for up to one additional term of ten (10) years. The City may terminate the Franchise at the end of the initial 1 term by giving Questar Gas written notice of the City's intent to so terminate not less than ninety (90) calendar days before the expiration of the initial term. The parties agree to consult with one another and commence negotiations with respect to a renewal of this Franchise no later than six (6) months prior to the expiration of the Franchise term. 4. Acceptance. Within sixty (60) days after the passage of this ordinance, Questar Gas shall file with the City an unconditional written acceptance of the Franchise declaring its acceptance of the Franchise and its intention to be bound by the terms and conditions of the Franchise. 5. Construction and Maintenance of Facilities. All Facilities shall be constructed and installed so as to interfere as little as possible with traffic over and public use of the Streets and to cause minimum interference with the rights and reasonable convenience of property owners who adjoin any of the Streets. All Facilities shall be constructed in a workmanlike manner and in accordance with established gas distribution construction practices and in a manner which protects public safety and the Facilities from all traffic loads. All Facilities that are installed during the term of the Franchise shall be sited without unreasonable additional cost to Questar Gas to be visually unobtrusive and to preserve the natural beauty and neighborhood aesthetics within the City limits. Questar Gas shall repair or replace, at its own expense, any and all rights of way, pavements, sidewalks, street improvements, excavations, other facilities, landscaping, or other improvements, public or private, that it damages in the Franchise operations. 6. Compliance with Ordinances --Conflict. Questar Gas shall comply with all City ordinances, regulations and requirements and shall pay all applicable excavation fees and charges that are or may be prescribed by the City with respect to the construction, maintenance and operation of all Facilities. However, these obligations shall apply only as long as such ordinances, regulations, requirements or fees are not preempted by or otherwise in conflict with any applicable statutory or constitutional law, rule or regulation, or the tariffs approved by regulatory bodies having jurisdiction V W L) 2 n over Questar Gas, including this Franchise and any lawful revisions made and accepted by Questar Gas during the term of the Franchise. The City shall have the right to inspect the construction, operation and maintenance of the Facilities to ensure the proper compliance with applicable City ordinances, regulations and requirements. In the event Questar Gas should fail to comply with the terms of any City ordinance, regulation or requirement, the City shall give Questar Gas written notice of such non-compliance and the time for correction provided by ordinance or a reasonable time for correction if there is no applicable ordinance. After written notice and failure of Questar Gas to make correction, the City may, at its sole risk, make such correction itself and charge the cost to Questar Gas including any minimum cost provided by ordinance. Nothing in this Franchise limits Questar Gas' right to oppose any ordinance, either existing, proposed, or adopted from and after the effective date of this Franchise. 7. Information Exchange. Upon request by either the City or Questar Gas, as reasonably necessary, Questar Gas and the City shall meet for the purpose of exchanging information and documents regarding construction and other similar work within the City limits, with a view towards coordinating their respective activities in those areas where such coordination may prove mutually beneficial. Any information regarding future capital improvements that may involve land acquisition shall be treated with confidentiality upon request to the extent that the City may lawfully do so. 8. Relocation. Upon written notice to Questar Gas, the City may require the relocation and removal or reinstallation (collectively, Relocation) of any Facilities located in, on, along, over, across, through, or under any of the Streets. After receipt of such written notice, Questar Gas shall diligently begin such Relocation of its Facilities as may be reasonably necessary to meet the City's requirements. The Relocation of Facilities by Questar Gas shall be at no cost to the City if (i) such 3 request is for the protection of the public health, safety and welfare pursuant to lawful authority delegated to the City; (ii) the Facilities have been installed pursuant to this or any other Questar Gas franchise and not pursuant to a property or other similar right, including, but not limited to, a right- of-way, grant, permit, or license from a state, federal, or other municipal or private entity; and (iii) the City provides a new location for the Facilities. Otherwise, a Relocation required by the City pursuant to such written notice shall be at the City's expense. Following Relocation of any Facilities, Questar Gas may maintain and operate such Facilities in a new location within City limits without additional payment. If a City project is funded by federal or state monies that include an amount allocated to defray the expenses of Relocation of Facilities, then the City shall compensate Questar Gas up to the extent of such amount for any Relocation costs mandated by the project to the extent that the City actually receives or is otherwise authorized to direct or approve payment of such federal or state funds. Notwithstanding the preceding paragraph, Questar Gas shall not be responsible for any costs associated with an authorized City project that are not attributable to Questar Gas' Facilities in the Streets. Further, all such costs shall be allocated among all utilities or other persons whose facilities or property are subject to Relocation due to an authorized City project. 9. Terms of Service. Questar Gas shall furnish gas service without preference or discrimination among customers of the same service class at reasonable rates, in accordance with all applicable tariffs approved by and on file with regulatory bodies having jurisdiction over Questar Gas, including revisions to such tariffs made during the term of the Franchise, and in conformity with all applicable constitutional and statutory requirements. Questar Gas may make and enforce reasonable rules and regulations in the conduct of its business, may require its customers to execute a gas service agreement as a condition to receiving service, and shall have the right to contract with its customers regarding the installation and operation of its Facilities. To secure safe and reliable W V 4 fl service to the customers, and in the public interest, Questar Gas shall have the right to prescribe the sizes and kinds of pipes and related Facilities to be used and shall have the right to refuse service to any customer who refuses to comply with Questar Gas' rules and regulations. 10. Indemnification. Questar Gas shall indemnify, defend and hold the City, its officers and employees, harmless from and against any and all claims, demands, liens, liabilities, damages, actions and proceedings arising from the exercise by Questar Gas of its rights under this Franchise, including its operations within City limits, and Questar Gas shall pay the reasonable cost of defense plus the City's reasonable attomeys' fees. Notwithstanding any provision to the contrary, Questar Gas shall not be obligated to indemnify, defend or hold the City harmless to the extent that any underlying claim, demand, lien, liability, damage, action and proceeding arises out of or in connection with any act or omission of the City or any of its agents, officers or employees. 11. Assignment. Questar Gas may assign or transfer its rights and obligations under the Franchise to any parent, affiliate, or subsidiary of Questar Gas, to any entity having fifty percent (50%) or more direct or indirect common ownership with Questar Gas, or to any successor -in - interest or transferee of Questar Gas having all necessary approvals, including those from the Utah Public Service Commission or its successor, to provide utility service within the City limits, and provided that any such assignee agrees to be bound by the terms of this Franchise. Otherwise, Questar Gas shall not transfer, assign or delegate any of its rights or obligations under the Franchise to another entity without the City's prior written approval, which approval shall not be unreasonably withheld or delayed. Inclusion of the Franchise as an asset of Questar Gas subject to the liens and mortgages of Questar Gas shall not constitute a transfer or assignment requiring the City's prior written consent. 12. Franchise Fee and Municipal Energy Tax. Questar Gas acknowledges that the City has levied a Franchise Fee in the amount of two and one half percent (2.5%) of the gross receipts payable 5 to Questar Gas under this Franchise, and a Municipal Energy Sales and Use Tax (MET) in the amount of one half of one percent (0.5%), on the sale or use of the delivered value of taxable energy within the City. Questar Gas agrees to collect the Franchise Fee and the MET in the amounts provided for above and pay said fee and tax directly to the City as provided in the Municipal Energy Sales and Use Tax Act (Utah Code Ann. § 10-1-301 et seq.) (the "Act") and as required by City ordinance to the extent consistent with the Act. To the extent permitted by the Act, the City may adjust the amount of the MET during the term of this Franchise. Nothing in this Franchise shall affect the City's right, under the Act, or any other applicable law then in effect, at any time hereafter to prospectively impose upon, charge or collect a municipal energy sales and use tax on the sale or use of taxable energy supplied by or through Questar Gas within the City, or to impose, charge or collect any lawful fee, tax, license fee, license tax, franchise fee or similar charge, or any combination or any of the foregoing provided the City is or becomes legally authorized to do so. Questar Gas reserves all lawful right to oppose any change or clarification in the law intended to permit such a charge or collection from Questar Gas. Franchisee shall provide, upon reasonable prior notice and request by City, information verifying that the Franchise Fees remitted to City are accurate and assessed and remitted in accordance with state and local laws. Said notice and request shall be directed in writing to Questar Gas, Director of Tax. Response to said request shall be provided within 45 days of receipt by the Director of Tax of the written request. Franchisee shall collect Municipal Energy Sales Tax and Sales Tax from Moab customers on a basis consistent with Franchise Fee collections and applicable state and local laws. The parties agree that customer confidentiality and other restrictions and requirements shall be maintained in the transfer of information pursuant to this Franchise Agreement. 6 13. Effect of Invalidity. If any portion of this Franchise is for any reason held illegal, invalid, or unconstitutional, such invalidity shall not affect the validity of any remaining portions of this Franchise. 14. Amendment. This Franchise shall not be altered or amended without the prior written consent of the parties. Nothing in this Franchise shall be construed to abrogate or impair the police powers possessed by the City under applicable law. 15. Effective Date. This ordinance shall become effective upon the date of acceptance by Questar Gas as established above. APPROVED and ADOPTED this 4th day of November, 2008. CITY OF MOAB ATTEST: 'r2eciae,c By City Recorder Rachel Ellison Mayor David Sakrison QUESTAR GAS COMPANY By: Ronald W. Jir.on Preside & C 0 7 CITY ACKNOWLEDGMENT STATE OF UTAH ) § COUNTY OF GRAND ) On the 4th day of November, 2008, personally appeared before me David Sakrison, who being duly sworn, did say that he is the Mayor of the CITY OF MOAB, a municipal corporation of the State of Utah, and that the foregoing instrument was signed in behalf of the City by authority of its gov: .. ledged to me that the City executed the same. My Commission Expires: -90-010 Notary Public Residing at: all E. CO Lath.- S+. QUESTAR GAS ACKNOWLEDGMENT STATE OF UTAH ) :§ COUNTY OF SALT LAKE) On the day of ,AQ71( , 2008, personally appeared before me Ronald W. Jibson, who being by me duly sworn did say that he is the President and CEO of QUESTAR GAS COMPANY, a Utah corporation, and that the foregoing instrument was signed in behalf of said corporation by authority of a resolution of its Board of Directors; and he acknowledged to me that said corporation executed the same. ry Public My Commission Expires: Residing at: Tor/ 6' NOTAR PUBLIC JOAN BECK 180 Ent 100 Souff, San take City, tttah 84111 My Commkakln Expires May 7, 2011 STATE OF UTAH 8 fl gal n ACCEPTANCE OF FRANCHISE This is to certify that Questar Gas Company accepts the franchise for the construction, operation and maintenance of a gas distribution system granted by the Council of Moab City in Grand County, State of Utah, as evidenced by Ordinance No. 2008-36 and adopted by the Mayor and Council on November 4, 2008. Questar Gas Company accepts the franchise as approved and agrees that it will be bound by and observe and carry out the terms and conditions of the franchise. This Acceptance of Franchise is signed on behalf of the corporation and by authority of a resolution of its Board of Directors. Dated at Salt Lake City, Utah this `l/ day of December, 2008. QUESTAR GAS COMPANY Ronal Preside on EO OUESTJR December 12, 2008 Rachel Ellison City Recorder Moab City 217 E. Center Street Moab, UT 84532 Dear Rachel, Questar Gas Company Community Relations P.O. Box 45360 Salt Lake City, UT 84145 Tel 801-324-5463 Brad.markus@questar.com Brad Markus Community Relations Manager Attached is a completed "Acceptance of Franchise" for Moab City. I am also including the $50.00 consideration of franchise fee as required in the agreement. Thank you for your prompt consideration of the agreement and your willingness to move the agreement before the Mayor and City Council Members. Please do not hesitate to contact me if you have any questions regarding this information. Sincerely, Brad Markus Community Relations Manager