HomeMy Public PortalAboutORD-CC-2008-361
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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
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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
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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
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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
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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
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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.
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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
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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
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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