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TC Ord. No. 2000-11 Granting a franshise to Holy Cross EnergyTOWN OF AVON ORDINANCE NO. 11 (SERIES OF 2000) AN ORDINANCE OF THE TOWN OF AVON, EAGLE COUNTY, COLORADO GRANTING A FRANCHISE TO HOLY CROSS ENERGY, ITS SUCCESSORS AND ASSIGNS, TO LOCATE, BUILD, INSTALL, CONSTRUCT, ACQUIRE, PURCHASE, EXTEND, MAINTAIN, REPAIR AND OPERATE INTO, WITHIN AND THROUGH THE TOWN�T OF AVON, ALL NECESSARY AND CONVENIENT.. FACILITIES FOR THE PURCHASE, GENERATION, TRANSMISSION AND DISTRIBUTION OF ELECTRICAL ENERGY, AND TO FURNISH, SELL AND DISTRIBUTE SAID ELECTRICAL ENERGY TO THE RESIDENTS OF THE TOWN FOR LIGHT, HEAT, POWER AND OTHER PURPOSES BY MEANS OF CONDUITS, CABLES, POLES AND WIRES STRUNG THEREON, OR OTHERWISE ON, OVER, UNDER, ALONG, ACROSS AND THROUGH ALL STREETS AND OTHER PUBLIC WAYS IN SAID TOWN OF AVON, COLORADO, AND FIXING THE TERMS AND CONDITIONS THEREOF. NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: ARTICLE 1 SHORT TITLE 1.1 This Ordinance shall be known and may be cited as the "Holy Cross Energy Franchise Ordinance." ARTICLE 2 DEFINITIONS For the purpose of this Ordinance, the following terms shall have the meaning given herein: 2.1 "Town" is the Town of Avon, Eagle County, Colorado, the municipal corporation as is now constituted or as the same may be enlarged or expanded from time to time through annexation. 2.2 "Company" refers to Holy Cross Energy, a Colorado corporation, its successors and assigns. 2.3 "Council" refers to the legislative body of the Town, known as the Town Council of the Town of Avon, Colorado. 2.4 "Facilities" refers to all overhead and underground electric facilities, buildings, and structures necessary to provide electricity into, within and through the Town including, but not limited to, such essential apparatus, appliances, plants, systems, substations, works, transmission and distribution lines and structures, anchors, cabinets, cables, conduits, guy posts and guy wires, meters, microwave and communication facilities, overhead and underground lines, pedestals, poles, regulators, sectionalizers, switchgears, transformers, various pad mounted and pole mounted equipment, vaults, wires, and all 2 other related electrical equipment required for the distribution, generation, maintenance, operation, purchase, and transmission of electrical energy. 2.5 "Public Easements" refers to easements created and available for use by any public utility for its facilities. 2.6 "Private Easements" refers to easements created and available only for use by the Company for its Facilities, or by the Company and other selected users or utilities. 2.7 "Residents" refers to and includes all persons, businesses, industry, governmental agencies, and any other entity whatsoever, presently maintaining a residence, business, farm, ranch or other enterprise located within, in whole or in part, the boundaries of the Town. 2.8 "Revenues ", unless otherwise specified, refers to and are the gross amounts of money that the Company receives from its customers within the Town from the sale of electrical energy for any particular period of time. 2.9 "Streets and Other Public Ways" refers to streets, alleys, viaducts, bridges, roads, lanes and other public ways in the Town, subject to limitations stated herein. ARTICLE 3 GRANT OF FRANCHISE 3.1 Grant of Right to Serve. Subject to the conditions, terms and provisions contained in this Franchise, the Town hereby grants to the Company a non - exclusive right, privilege and authority to locate, build, install, construct, acquire, purchase, extend, maintain, repair and operate into, within and through all of the Town boundaries all necessary and convenient Facilities for the purchase, generation, transmission, and distribution of 3 electrical energy. Such grant is made together,with the non - exclusive right and privilege to furnish, sell, and distribute said electrical energy to the Residents for light, heat, power and other purposes. 3.2 Scope of Grant. Such grant includes the right and the obligation to furnish electrical energy using the Company's Facilities, either overhead, underground, or otherwise, on, over, under, along, across and through any and all Streets and Other Public Ways, and on, over, under, along, across and through any extension, connection with, or continuation of, the same and /or on, over, under, along, across and through any and all such new Streets and Other Public Ways as may be hereafter laid out, opened, located, or constructed within the boundaries of the Town. The Company is further granted the right, privilege and authority to excavate in, occupy and use any and all Streets and Other Public Ways and Public Easements. Any such excavation, occupation and use must be in accordance with Town standards and regulations, and will be undertaken under the supervision of the properly constituted authority of the Town for the purpose of bringing electrical energy into, within and through the Town and supplying electrical energy to the Residents. 3.3 Service to Town Facilities. The Town hereby grants to the Company the right, privilege, and authority to provide street and security lighting to the Town, and to serve all Town owned or operated structures, plants, equipment, or Town apparatus and facilities, including the right, privilege, and authority to furnish, sell, and distribute electrical energy necessary for such. 3.4 Duration of Franchise. This Ordinance shall be in full force and effect from and after its passage as by law required and the terms, conditions and covenants hereof shall remain in full force and effect for a period of twenty (20) years from and after such enactment. 4 ARTICLE 4 SPECIFIC ELEMENTS OF GRANT 4.1 Recreational Areas. The Company shall not have the right to locate, build, or construct Facilities under, across, or through public parks or recreational areas, open space or other Town owned property located within the Town except as expressly set forth in this Franchise or with prior written approval granted by the Town's Council. This Ordinance shall never be construed to limit the Company's rights of eminent domain as provided by law. 4.2 Trees and Shrubs. The Company shall have the right to control the growth of trees and shrubs as may be reasonably necessary to protect its Facilities. The Company may use machinery or other lawful methods to control such growth, but shall not use chemicals for such purpose. Annually, on a date mutually agreed to by both parties, representatives of each party shall meet and /or consult to discuss problems related to the means and methods of controlling such growth. Prior to cutting down or removing any tree, the Company shall consult with a representative of the Town for the purpose of determining whether such cutting or removal is the only reasonable and cost effective means of protecting the Company's Facilities. 4.3 Location of Company's Facilities. Wherever reasonable and practicable, the Company will endeavor to install its Facilities within Public Easements. The Company shall locate its Facilities within the Town so as to cause minimum interference with any of the Town's facilities or property, including without limitation water lines, sewer lines, storm drains, and the proper use of Streets and Other Public Ways, and so as to cause minimum 5 interference with the rights or reasonable convenience of property owners whose property adjoins any of the said Streets and Other Public Ways. 4.4 Restoration of Public and Private Improvements. Should it become necessary for the Company, in exercising its rights and performing its duties hereunder, to interfere with any sidewalk, graveled or paved street, road, alley, water line, sewer line, storm drain, or any other public or private improvement, the Company shall at its own expense and in a quality workmanlike manner, repair or cause to be repaired and restored to its original condition such sidewalk, graveled or paved street, road, alley, water line, sewer line, storm drain, or other public or private improvement after the installation of its Facilities, provided, however, that upon failure of the Company to do such required repairs within a reasonable time and in a workmanlike manner, the Town may perform the required work and charge the Company for all reasonable costs thereof. 4.5 Use of Facilities. The Company shall have the right to make such use of its Facilities and other property owned by Company, for uses other than the uses contemplated in the Franchise Ordinance, as it deems proper so long as such other uses do not interfere with its ability to supply electrical energy. 4.6 Changed Conditions — Overhead. If at any time it shall be necessary to change the position of any overhead electrical Facilities of the Company to permit the Town to lay, make or change street grades, pavements, sewer mains, water mains, storm drains, or other Town works, such changes shall be made by the Company at its own expense, after reasonable notice from the Town. This provision shall not apply to any changes that result from new development within the Town. The costs associated with changing 6 overhead electric facilities to accommodate such new development shall be borne by the developer, the Town or some other party, but not the Company. 4.7 Compliance with Town Requirements. The Company shall comply with all Town requirements regarding curb and pavement cuts, excavating, digging and related construction, maintenance and operational activities except as otherwise provided for in this Franchise Ordinance. 4.8 Town Review of Construction and Design. Prior to construction of any significant Facilities within the Town, if requested by the Town, the Company shall furnish to the Town the plans for such proposed construction.. In addition, the Company shall assess and report on the impact of its proposed construction on the Town environment. Such plans and reports may be reviewed by the Town to ascertain, inter alia, (1) that all applicable laws including building and zoning codes and air and water pollution regulations are complied with; (2) that aesthetic and good planning principles have been given due consideration; and (3) that adverse impact on the environment has been minimized. 4.9 vital Improvement Projects. The Company and the Town shall inform one another of any capital improvement projects anticipated within the Town that may impact the facilities or operations of either party. The party proposing such capital improvements shall inform the other party of the nature of such improvements within a reasonable time after plans for such improvements have been substantially formulated. Each party shall cooperate in the timely exchange of all necessary information, design data, drawings, and reports to properly assess and evaluate the potential impacts of said improvements. 4.10 Maintenance of Facilities. The Company shall install, maintain, repair, replace, and upgrade its Facilities to ensure both the adequacy of, and quality of, electric service to all 7 Residents. All excavation and construction work done by or under the authority of the Company shall be done in a timely and expeditious manner which minimizes the inconvenience to the Town and all Residents. 4.11 Town Not Required to Advance Funds. Upon receipt from the Town of an authorization to proceed, and a promise to pay for construction, the Company shall extend its Facilities to the Town for municipal uses therein or for any municipal facility outside the boundaries of the Town and within the Company's certificated territory, without requiring the Town to advance funds prior to construction. 4.12 Scheduled Interruptions. The Company shall, whenever possible, give notice, either oral or written, to the Town and its affected Residents, of planned service interruptions of significant duration. 4.13 Cooperation with Other Utilities. When undertaking a project of undergrounding, the Town and the Company shall work with other utilities or companies to attempt to have all lines undergrounded as part of the same project. The Company shall not be required to pay the costs of any other utility in connection with work under this section. ARTICLE 5 RATES, REGULATIONS, UNIFORMITY OF SERVICE AND UPGRADES 5.1 Furnishing Electrical Energy. The Company shall furnish electrical energy within the boundaries of the Town, and to the Residents thereof at the Company's applicable and effective rates and under the terms and conditions set forth in the Rate Schedules, Standards for Service, Rules and Regulations, and Service Connection and Extension Policies, adopted by and on file with the Company, subject only to regulations thereof as 8 is provided by law. The Company shall not, as to rates, charges, service, facilities, rules, regulations or in any other respect, make or grant any preference or advantage to any Resident, provided that nothing in this grant shall be taken to prohibit the establishment from time to time of a graduated scale of charges and classified rate schedules to which any customer coming within an established classification would be entitled. 5.2 Facility Upgrades. The Company will, from time to time, during the term of this Franchise make such improvements, enlargements and extensions of its Facilities incorporating, when reasonable and practical, technological advances within the industry as the business of the Company and the growth of the Town justify, in accordance with its Standards for Service, Rules and Regulations, and Service Connection and Extension Policies for electric service concurrently in effect and on file with the Company, subject only to regulations thereof as is provided by law. 5.3 Reliable Supply of Electricity. The Company shall take all reasonable and necessary steps to provide an adequate supply of electricity to its customers at the lowest reasonable cost consistent with long -term reliable supplies. If the supply of electricity to its customers should be interrupted, the Company shall take all necessary and reasonable actions to restore such supply within the shortest practicable time. In the event the Company's electric system, or any part thereof, is partially or wholly destroyed or incapacitated, the Company shall use due diligence to restore its system to satisfactory service within the shortest practicable time. 5.4 Maps and Regulations. The Company shall submit copies of its Standards for Service, Service Connection and Extension Policies, Rules and Regulations, and maps of its Facilities within the Town boundaries to the Town Clerk. All changes in such maps, 9 Standards for Service, Rules and Regulations, and policies, shall be submitted to the Town as the same may from time to time occur. 5.5 Subdivision Review. The Company shall analyze any subdivision plats or planned unit development plans submitted to it by the Town and respond to any request by the Town for information regarding the adequacy of its Facilities necessary to serve such proposed plat or plan and answer any other questions posed to the Company by the Town regarding said plat or plan as are within the knowledge of the Company. The Company shall respond to said requests or questions within reasonable time limits set by the Town's Subdivision Regulations. 5.6 Interrelationship of Laws, Rates, Regulations and Ordinances. The Company shall comply with all County, State or Federal laws, and rules and regulations related to the subject matter hereof. The Company also agrees to abide by all ordinances and resolutions of the Town, unless and except to the extent that this Franchise Ordinance shall relieve the Company of the obligation to comply with the terms and conditions of such other ordinances or any other provisions hereof. The Company, from time to time, may promulgate such rules, regulations, terms and conditions governing the conduct of its business, including the use of electrical energy and the payment therefor, and the interference with, or alteration of, any of the Company's property upon the premises of its customers as shall be necessary to provide a safe, continuous and uninterrupted service to each and all of such customers and the proper measurement thereof and payment therefor. Any such rules, regulations, terms and conditions must not be inconsistent with this Franchise Ordinance, but no ordinance of the Town may regulate the Company's rates or charges for the furnishing of electrical energy, or shall lessen the safety of providing such 10 energy to its customers, nor shall any such ordinance alter the manner in which service is extended to such customers. ARTICLE 6 USE OF COMPANY FACILITIES 6.1 Use of Poles by Town. The Town shall have the right, without cost, to jointly use all poles and suitable overhead structures within the Town for the purpose of stringing wires thereon for any reasonable Town authorized use; which use shall not include the distribution or transmission of electricity; provided, however, that the Company shall assume no liability, nor shall it be put to any additional expense, in connection therewith, and said use shall not interfere in any unreasonable manner with the Company's use of same, or the use thereof by the Company's permittees, licensees, or other existing users of such Facilities. The Company agrees to permit Town licensees, permittees and franchisees, except those holding an electric utility franchise or license from the Town, to use its Facilities upon reasonable terms and conditions to be contractually agreed upon with the Company, in writing. 6.2 Joint Use of Trenches. If the Company installs new electric underground conduit or opens a trench or replaces such conduit, the Company shall provide adequate advance notice to permit additional installation of similar facilities in the same trench by the Town, or installation of other types of municipal facilities, subject to applicable rules and regulations. If the Town elects to use the trench it will so notify the Company. The Town shall provide the materials at no expense to the Company. The Town shall reimburse to the Company only those monies paid by the Company to an independent contractor for labor costs to install Town furnished materials' by such independent contractor. The Company shall include copies of invoices from the independent contractor to substantiate the Company's request for reimbursement. If the installation of Town furnished materials is performed solely by the Company's employees, there will be no labor charge to the Town. Such action by the Town shall not unnecessarily interfere with the Company's Facilities or delay the accomplishment of the project. The Town shall be responsible for ensuring that required vertical and horizontal separations between its facilities and that of the Company's is strictly maintained. The Town and Company shall jointly hold each other harmless from any liability or damage resulting from their respective facilities being installed in a joint trench. ARTICLE 7 INDEMNIFICATION AND POLICE POWER 7.1 Town Held Harmless. The Company shall indemnify, defend and save the Town, its officers and employees, harmless from and against all liability or damage and all claims or demands whatsoever in nature arising out of the operations of the Company within the Town pursuant to this Franchise, and the securing of, and the exercise by the Company of, the Franchise rights granted in this ordinance and shall pay all reasonable expenses arising therefrom. The Town shall provide prompt written notice to the Company of the pendency of any claim or action against the Town arising out of the exercise by the Company of its Franchise rights. The Company will be permitted, at its own expense, to appear and defend or to assist in defense of such claim. Notwithstanding any provision hereof to the contrary, the Company shall not be obligated to indemnify, defend or hold 1% the Town harmless to the extent of any claim, demand, or lien arising out of, or in connection with, any negligent act or failure to act by the Town or any of its officers, employees, or agents unless the Company shall become obligated to indemnify, defend or hold the Town harmless by virtue of the comparative negligence laws of Colorado. 7.2 Police Power Reserved. The right is hereby reserved to the Town to adopt from time to time, in addition to the provisions herein contained, such ordinances as may be deemed necessary in the exercise of its police power, provided that such regulations shall be reasonable and not destructive of the rights herein granted, and not in conflict with the laws of the State of Colorado, or with orders of other authorities having jurisdiction in the premises. ARTICLE 8 FRANCHISE FEE 8.1 Franchise Fee. In consideration for the grant of this Franchise, the Company shall pay to the Town a sum equal to three percent (3 %) of its gross Revenues collected from the sale of electricity within the boundaries of the Town. Electric Revenues received from service to the Town facilities will not be assessed a 3% fee under this section nor will the Town be paid the 3% fee from such Revenues collected from Town facilities. To the extent required by law, the three percent (3 %) shall be surcharged to the Residents. This surcharge is in addition to any charges specified in the Company's tariffs and any applicable taxes. 8.2 Change of Franchise Fee — Town Initiated. The Town expressly reserves the right to notify the Company of its desire to revise the Franchise Fee to a different percentage of 13 8.3 8.4 8.5 revenue prior to October 1 of the even numbered years during the term of this franchise, which revised Franchise Fee shall become effective on the next succeeding January 1, following notification. Provided, however, that the maximum amount of the Franchise Fee shall be five percent (5 %) of the Revenues collected within the boundaries of the Town. Notification to the consumer shall be given by the Town no less than thirty (30) days prior to January 1, the effective date of the scheduled increase. All expenses associated with notification shall be paid entirely by the Town. Payment. Payment of the Franchise Fee shall be made by the Company to the Town on or before thirty (30) days after the end of each quarter of each calendar year for the preceding three (3) month period, but shall be adjusted for the portions of the calendar quarters at the beginning and at the end of this Franchise. All payments shall be made to the Town Clerk. Revenue Audit. For the purpose of ascertaining or auditing the correct amount to be paid under the provisions of this Article, the Company shall file with the Town Manager, or such other official as shall be designated by the Town from time to time, a statement, in such reasonable form as the Town may require, showing the total gross receipts received by the Company from the sale of electricity to Residents within the boundaries of the Town for the preceding three (3) month period. The Town Manager or any official appointed by the Council shall have access to the books of said Company for the purpose of confirming the gross Revenues received from operations within the Town. Correction of Underpayment/Overpayment. Should either the Company or Town discover either an underpayment or overpayment of the Franchise Fee, the party making such discovery shall inform the other party within a reasonable time. If the error is 14 substantiated as an underpayment, the Company shall make payment of the deficiency within thirty (30) days of the date the error was substantiated. If the error is substantiated as an overpayment, a credit equal to the overpayment will be applied to the next Franchise payment due the Town. 8.6 Occupation Tax Alternative. In the event the said Franchise Fee levied herein should be declared invalid and/or shall be set aside by a Court of competent jurisdiction, then, and in such event, and in lieu thereof, the Town may thereafter levy an occupation tax upon the Company, not to exceed in any one calendar year five percent (5 %) of the gross Revenues collected from the sale of electricity within the boundaries of the Town for that calendar year. Such occupation tax shall be adjusted for any Franchise Fees previously paid to the Town in such calendar year. In the event the Town shall enact such an occupation tax, in lieu of the Franchise Fee, all of the remaining terms, conditions and provisions of this Ordinance shall remain in full force and effect for the period stated herein. Such occupation tax ordinance or enactment shall be designed to meet all legal requirements to ensure that it is not construed as an income tax. 8.7 Franchise Fee Payment in Lieu of Other Fees. The Franchise Fee paid by the Company is accepted by the Town in lieu of any occupation tax, license tax, permit charge, inspection fee, contractors license fees, or similar tax on the privilege of doing business or in connection with the physical operation thereof, but does not exempt the Company from any lawful taxation upon its property or any other tax not related to the Franchise or the physical operation thereof and does not exempt the Company from payment of head taxes or other fees or taxes assessed generally upon business. 15 8.8 Payment of Expenses Incurred by Town in Relation to Ordinance. At the Town's option, the Company shall pay in advance or reimburse the Town for expenses incurred in publication of notices and ordinances and for photocopying of documents arising out of the negotiations or process of obtaining this franchise. 8.9 Termination of Franchise. If this Franchise is terminated by either the Company or the Town for whatever reason, or is declared null and void, all Franchise Fees or occupation taxes levied herein shall be suspended as of the date the Franchise is legally terminated. Final payment of any Franchise Fee or occupation tax owed and due the Town shall be made on or before thirty (30) days after the date the Franchise is legally terminated. ARTICLE 9 REPORTS 9.1 Reports. The Company shall submit reasonable and necessary reports containing, or based upon, information readily obtainable from the Company's books and records as the Town may request with respect to the operations of the Company under this Franchise, and shall, if requested, provide the Town with a list of real property within the Town which is owned by the Company. 9.2 Copies of Tariffs. Upon request, the Company shall furnish the Town with copies of any tariffs currently in use. 16 ARTICLE 10 ADMINISTRATION 10.1 Amendments. At any time during the term of this Franchise, the Town through its Council, or the Company, may propose amendments to this Franchise by giving thirty (30) days written notice to the other party of the proposed amendment(s) desired, and both parties thereafter, through their designated representatives, shall within a reasonable time, negotiate in good faith in an effort to agree upon a mutually satisfactory amendment(s). No amendment(s) to this Franchise shall be effective until mutually agreed upon in writing by the Town and the Company and until all public notice requirements pursuant to Colorado statutes, and ordinance requirements of the Town, have been met. This section shall not apply to Franchise Fee changes under Article 8. 10.2 Revocation of Privileges by Condemnation. In the event, at any time during the term of this Franchise, the Town shall condemn any of the Facilities of the Company within the boundaries of the Town, and thereby revoke all or any part of the privilege and authority herein granted to the Company to serve the Residents, then and in such event the Town shall pay to the Company just compensation as provided by the laws of the State of Colorado for such rights and facilities by reason of such condemnation. 10.3 Compliance Impaired. Both the Company and the Town recognize there may be circumstances whereby compliance with the provisions of this Franchise is impossible or is delayed because of circumstances beyond the Company's or Town's control. In those instances, the Company or Town shall use its best efforts to comply in a timely manner and to the extent possible. 17 10.4 Company's Failure to Perform. It is agreed that in case of the failure of the Company to perform and carry out any of the stipulations, terms, conditions, and agreements herein set forth in any substantial particular, wherein such failure is within the Company's control and with respect to which redress is not otherwise herein provided, the Town, acting through its Council, may, after hearing, determine such substantial failure; and, thereupon, after notice given the Company of such failure, the Company may have a reasonable time, not less than ninety (90) days, unless otherwise agreed by the parties, in which to remedy the conditions respecting which such notice shall have been given. After the expiration of such time and the failure to correct such conditions, the Council shall determine whether any or all rights and privileges granted the Company under this ordinance shall be forfeited and may declare this Franchise null and void. V 10.5 Ownership of Facilities. All Facilities used or placed by the Company, either within or outside the boundaries of the Town shall be and remain the property of the Company. 10.6 Transfer of Rights. The Company shall not transfer or assign any rights under this Franchise to a third party, excepting only corporate reorganizations of the Company not including a third party, unless the Town shall approve in writing such transfer or assignment. Approval of the transfer or assignment shall not be unreasonably withheld. 10.7 Removal of Facilities. Upon the expiration of this Franchise, if thereafter the Company Facilities shall not be used for electric, telephone, or cable TV purposes for a period of twelve (12) successive months, the Town shall have the option of having the Company remove such Facilities or claim such Facilities as its own. If the Town should require the Company to remove its Facilities such removal shall only apply to those Facilities that are above ground and have a visual impact on the surrounding area. If the Town elects to 18 have the Company remove the Facilities, it shall give written notice to the Company within thirty (30) days after expiration of the twelve (12) month period above described directing it to remove such Facilities, and the Company shall remove the same no later than ninety (90) days after the date of such notice, unless the Company and the Town agree to a longer period within which removal shall occur. Any Facilities, either underground or overhead, remaining after the twelve (12) month, thirty (30) day, and ninety (90) day periods above described, that have not been expressly claimed by the Town or removed by the Company, shall be deemed to have been abandoned. Any cost incurred by the Town in removing abandoned Facilities, and any liability associated with Facilities abandoned by the Company shall be. the liability of the Company. For any Facilities claimed by the Town, any liability associated with such Facilities shall become the liability of the Town. 10.8 Non - renewal of Franchise, Alternative Electric Service. If this Franchise is not renewed, or if it is declared null and void, or the Company terminates any service provided for herein for any reason, and the Town has not provided for alternative electric service to the Residents, the Company shall not remove its Facilities and shall be obligated to continue electric service to the Residents until alternative electric service is provided. The Company will not withhold any temporary services necessary to protect the public. ARTICLE 11 COMMUNITY ENHANCEMENT FUND 11.1 Purpose. The Company is committed to programs designed to make a difference in people's lives and the communities in which they reside. The Company will voluntarily WE make monetary resources available to the Town for such programs and/or activities. Programs for which such funds shall be spent shall be limited to: (1) Beautification projects; (2) Energy conservation projects; (3) Equipment and technology upgrades for schools; (4) Scholarship funds; (5) Acquisition of open space and /or park land and development thereof; (6) Sponsorship of special community events; (7) Undergrounding of overhead electric and other utility lines. Funds made available under this Article may be spent for other purposes only with the express written consent of the Company. This program has been initiated solely by the Company; the Town has not made the program a requirement for this Franchise. Funding for this program is not a cost of doing business but is a voluntary contribution by the Company. 11.2 Payments to the Fund. After enactment of this Ordinance, the Company will establish an initial fund amount of $2,000.00. The Company shall then make annual payments to the fund equal to one percent (1%) of its prior year's gross Revenues, prorated for the portions of the months at the beginning and end of the term of this Franchise, collected from the sale of electricity within the boundaries of the Town, or $2,000.00, whichever amount is greater. Said payments shall be made into the fund no later than February 15`h of the year subsequent to the year in which the gross Revenues are received by the Company. 11.3 The Fund. The Fund established by the Company shall be maintained in a bank account in the name of the Town, but shall be maintained separately from all other funds and accounts held by the Town. 11.4 Payments from the Fund. All payments from the fund shall be for projects described in Section 11.1 hereof. Prior to any such expenditure, authorization to withdraw from the 20 fund shall be given by resolution or ordinance duly enacted by the Council, and such resolution or ordinance shall clearly describe the nature and purpose of the project for which the expenditure is made. Prior to any expenditure, the Town shall notify the Company of its intended use of the funds. Unless the Company objects, in writing, prior to such expenditure, the Company shall have waived its right to object in the future if the funds are expended for the use identified in the notice. 11.5 Audits. The Town may audit the Company's books related to gross Revenues collected within the Town at any reasonable time and with reasonable prior notice. The Company may audit the fund account, expenditures from the fund, and resolutions and ordinances authorizing such expenditures at any reasonable time and with reasonable prior notice. 11.6 Forfeiture of Enhancement Funds. The Company shall have the express right to temporarily suspend or terminate in full its annual contributions to the Enhancement Fund if it is determined that funds allocated and paid to the Town are being, or have been, misappropriated, administered with bias or discrimination, or for other inappropriate actions. 11.7 Advances of Funds. The Company shall consider advances of funds, subject to the provisions of this Section, for all such projects that specifically involve undergrounding of overhead lines or projects acceptable to the Company which are related to the Company's existing Facilities. The Town shall make all reasonable attempts to plan and budget use of the Fund without advancement of future Funds. However, if the Town requests and the Company and the Town agree that it is in the mutual interest of both, the Company shall anticipate Fund amounts to be available for up to three (3) years in advance. Both parties shall enter into a special agreement concerning the advanced 21 Funds. Any amounts advanced shall be credited against amounts to be expended in succeeding years until such advances are eliminated. ARTICLE 12 UNDERGROUNDING 12.1 At Consumer's Request. If a customer within the Town should request that new facilities be installed underground, or for the conversion of existing overhead facilities to underground facilities, or if Town ordinances or resolutions require a customer or customers to install facilities underground, the Company shall proceed in accordance with its Line Extension Policy, Advice Letter Number 8, dated July 30, 1976 (herein "Line Extension Policy ") and in accordance with its Policy Statement, Conversion From Overhead to Underground Facilities, June 15, 1988 (herein "Underground Conversion Policy "), as each may from time to time be amended. 12.2 Town Requested Undergrounding. Except for the Company's contributions to the Community Enhancement Fund, which may be used by the Town to pay for the undergrounding of the Company's Facilities, any request, requirement imposed by resolution or ordinance, or other communication from the Town to the Company, asking, or requiring the Company to underground new facilities or existing overhead facilities, or move, remove, or replace existing underground facilities, shall be responded to in accordance with the provisions of the Company's Line Extension Policy, Underground Conversion Policy, or other customary practice in use by the Company. The Town acknowledges receipt of a copy of both policies. 22 12.3 Relocation of Underground Facilities. Nothing hereinabove shall be construed to obligate the Company to pay for the removal and relocation of its Facilities where such is at the request or demand of a person, or a public or private entity under circumstances which require the party requesting or demanding such to pay for the relocation under other provisions hereof, or under the provisions of the Company's Line Extension Policy, Underground Conversion Policy, or other customary practice in use by the Company. 12.4 Governmental Mandates. This Franchise or the Town Municipal Code, as either may be amended from time to time, shall not prohibit or limit the Company's right to enforce its collection of the increased costs of new underground construction, or conversion, in accordance with the provisions of the Company's Line Extension Policy, Underground Conversion Policy, customary practices of the Company, or state law. Anything in this Franchise, or in the Municipal Code, that would be a contributing factor to the ultimate effect of causing the Company to convert overhead electric lines or Facilities to underground lines or Facilities, or which would result in new construction of lines or Facilities being placed underground, when such could have been constructed overhead, shall be deemed to be a mandatory requirement of the Town. ARTICLE 13 MISCELLANEOUS 13.1 Changes in Utility Regulation. In the event new legislation materially affects the terms and conditions of this Franchise Ordinance, the parties agree to renegotiate the affected terms and conditions in good faith. The parties hereto acknowledge that regulatory and legislative changes in the electric utility, gas utility and other energy industries are 23 currently being discussed nationwide and statewide; that some changes in utility industry sectors have already been implemented; and that other changes may be made in the future, during the tern of this Franchise. One likely scenario is the implementation of open access to electric customers, and other energy customers, making such customers available to all utilities, thus eliminating or limiting territorial protections Under this scenario one utility may contract to sell a type of energy to a customer, while another utility transports the energy to the customer for a fee charged to the other utility or the customer. The parties agree, that insofar as future changes in the utility laws will allow, the Company shall always retain the right to bill customers for electric utility transportation services and electric energy sales within the Town if it is the provider of either the I. electric energy product or the transportation of such prodtdct. The parties agree that this will provide the most efficient and convenient electric utility service to the Residents and provide assurance to the Town of franchise fee collection for each component charged for the sale and delivery of electric energy products within the boundaries of the Town. 13.2 Successors and Assigns. The rights, privileges, franchises and obligations granted and contained in this Ordinance shall inure to the benefit of and be binding upon the Company, its successors and assigns. 13.3 Representatives. Both parties shall designate from time to time in writing representatives to act as franchise agents for the Company and the Town. Such will be the persons to whom notices shall be sent regarding any action to be taken under this Ordinance. Notice shall be in writing and forwarded'by certified mail or hand delivery to the persons and addresses as hereinafter stated, unless the persons and addresses are changed at the 24 written request of either party. Until any such change shall hereafter be made, notices shall be sent to the Town Mayor and to the Company's General Manager. Currently the addresses for each are as follows: For the Town: Judy Yoder, Mayor Town of Avon P. O. Box 975 400 Benchmark Road Avon, CO 81620 For the Company: Holy Cross Energy Attention: General Manager P.O. Drawer 2150 3799 Highway 82 Glenwood Springs, CO 81602 13.4 Severability. Should any one or more provisions of this Franchise be determined to be illegal or unenforceable, all other provisions nevertheless shall remain effective; provided, however, the parties shall forthwith enter into good faith negotiations and proceed with due diligence to draft provisions that will achieve the original intent of stricken provisions. 13.5 Entire Agreement. This Franchise constitutes the entire agreement of the parties. There have been no representations made other than those contained in this Franchise. ARTICLE 14 APPROVAL 14.1 Town Approval. This grant of Franchise shall not become effective until approved by the Town in accordance with its ordinances and the statutes of the State of Colorado. 14.2 Company Approval. The Company shall file with the Town Clerk its written acceptance of this Franchise and of all its terms and provisions within fifteen (15) business days after the final adoption of this Franchise by the Town. The acceptance shall be in the form and 25 content approved by the Town Attorney. If the Company shall fail to timely file its written acceptance as herein provided, this Franchise shall become null and void. 14.3 Public Health, Safety and Welfare. The Council hereby finds, determines and declares that this Ordinance is necessary and proper for the health, safety and welfare of the Town and the Residents thereof. INTRODUCED, PASSED ON FIRST READING, APPROVED AND ORDERED POSTED, this day of , 2000, and a public hearing on this Ordinance shall be held at the regular meeting of the Town Council of the Town of Avon, Colorado on the day of 2000, at 5:30 p.m., in the Municipal Building of the Town of Avon, Colorado. 3m- - = Attest: Kris Nash, Town Clerk INTRODUCED, PASSED ON SECOND READING, APPROVED AND ORDERED POSTED, this day of , 2000. Attest: Kris Nash, Town Clerk APPROVED AS TO FORM: Burt Levin, Town Attorney 26 Judy Yoder, Mayor CROSS F 1 tiF - O 2 < r O O SSO ,6O August 30, 2000 Ms. Kris Nash Town Clerk Town of Avon P. O. Box 975 Avon, CO 81620 -0975 RE: Town of Avon, Ordinance No. 11, Series of 2000 Dear Ms. Nash: 3799 HIGHWAY 82 • PO. DRAWER 2150 GLENWOOD SPRINGS, COLORADO 81602 (970) 945 -5491 • FAX (970) 945 -4081 Pursuant to our recent phone conversation, enclosed are two (2) original Ordinance documents and thirty -two (double sided) copies. This documentation is being furnished for your notification requirements (by posting such Ordinance in various locales) and for consideration of the Ordinance at the regularly scheduled Town Council meeting on Tuesday, September 12, 2000. Based on the premise that Town Council will approve this Ordinance on first reading and adopt such at the second reading scheduled for Tuesday, September 26th, according to the Town's Charter, when does this Ordinance come into effect? Assuming that there are no delays encountered with the Town's approval process, Holy Cross Energy's Board of Directors will draft a resolution authorizing our management to accept the terms and conditions of the Ordinance after its passage by the Town, at their Board meeting on Wednesday, September 20, 2000. It has been a pleasure working with Town Staff on the renewal of electric franchise. The cooperative attitude exhibited by Town staff along with the timely responses received for comment /review processes have been greatly appreciated. Thank you. Sincerely, HOLY CROSS ENERGY Step en B. Casey, Supervisor of Contract Services SBC Enclosures M: \Word \Franchise Documents \Avon \Nash Letter (8- 30- 00).doc MEMORANDUM FROM: Burt Levin TO: Hon. Mayor and Town Council RE: Renewal of Holy Cross Electric Energy Franchise DATE: October 19, 2000 Attached is the first reader copy of the renewed franchise ordinance for Holy Cross. Council approved this action in August (see attached memo of August 16th), but it was withheld because of some questions for Holy Cross by the staff. We are planning on meeting with Holy Cross in the future to address these issues, but they are not part of the franchise ordinance. This is the same standard franchise which is in effect in Vail and other jurisdictions serviced by Holy Cross. I� • MEMORANDUM FROM: Burt Levin TO: Hon. Mayor and Town Council CC: Bill Efting, Larry Brooks, Scott Wright, Norm Wood RE: Renewal of Holy Cross Energy Franchise DATE: August 16, 2000 The Town's 20 year franchise with Holy Cross Electric (for provision of electricity) is due to expire this December. Representatives of Holy Cross have provided us with a draft ordinance for another 20 year renewal of the franchise (see attached). Holy Cross passes the franchise fee through to its Avon customers, so it has no strong feelings about the amount of the fee. Under the current franchise the Town collects from Holy Cross a franchise fee of 3% of its gross revenues from sales of electricity in Avon. The 3% fee is what about 85% of towns collect (a small percentage collect 4% or 5 %). • The 3% fee amounted to about $113,000 in revenue to the Town during 1999. (If the Town wished to raise the franchise fee, a TABOR election would probably be required.) The draft franchise ordinance Holy Cross has presented is the same ordinance which was recently enacted by the Towns of Vail and Snowmass Village. It continues the fee at 3 %. The.Holy Cross representatives asked that I particularly draw your attention to Article 11 on page 19. This new article represents Holy Cross's effort to give something back to the community. Under this article Holy Cross will donate to the Town an additional 1% of its gross revenues in Avon to a fund maintained by the Town and to be used for any of 7 public purposes enumerated in § 11.1. This will amount to a gift to the Town of over $30,000 annually if current rates are continued. _...If.any member_ of the_. Council wishes_ representatives of Holy Cross.to_attend a work session to discuss this matter, they would be happy to do so. Please let me know if you want me to invite them. So far as I know, the Town has not had any problems with Holy Cross of the nature encountered with TCI /ATT. If there are no concerns with the ordinance as drafted, I will put it on the next agenda for enactment. • TOWN OF AVON ORD� YANCE NO. 11 (SERIES OF 2000) AN ORDINANCE OF THE TOWN OF AVON, EAGLE COUNTY, COLORADO GRANTING A FRANCHISE TO HOLY CROSS ENERGY, ITS SUCCESSORS AND ASSIGNS, TO LOCATE, BUILD, INSTALL, CONSTRUCT, ACQUIRE, PURCHASE, EXTEND, MAINTAIN, REPAIR AND OPERATE INTO, WITHIN AND THROUGH THE, 'TOWN OF AVON, ALL NECESSARY AND CONVENIENT FACILITIES FOR THE PURCHASE, GENERATION, TRANSMISSION AND DISTRIBUTION OF ELECTRICAL, ENERGY, AND TO FURNISH, SELL AND DISTRIBUTE SAID ELECTRICAL ENERGY TO THE RESIDENTS OF THE TOWN FOR LIGHT, LSAT, POWER AND OTHER PURPOSES BY MEANS OF CONDUITS, CABLES, POLES AND WIRES STRUNG THEREON, OR OTHERWISE ON, OVER, UNDER, ALONG, ACROSS AND THROUGH ALL STREETS AND OTHER PUBLIC WAYS IN SAID TOWN OF AVON, COLORADO, AND FIXING THE TERMS AND CONDITIONS THEREOF. NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: ARTICLE I SHORT TITLE 1.1 This Ordinance shall be known and may be cited as the "Holy Cross Energy Franchise Ordinance." ARTICLE 2 DEFINITIONS For the purpose of this Ordinance, the following terms shall have the meaning given herein: 2.1 "Town" is the Town of Avon, Eagle County, Colorado, the municipal corporation as is now constituted or as the same may be enlarged or expanded from time to time through annexation. 2.2 "Company" refers to Holy Cross Energy, a Colorado corporation, its successors and assigns. 2.3 "Council" refers to the legislative body of the Town, known as the Town Council of the Town of Avon, Colorado. 2.4 "Facilities" refers to all overhead and underground electric facilities, buildings, and structures necessary to provide electricity into, within and through the Town including, but not limited to, such essential apparatus, appliances, plants, systems, substations, works, transmission and distribution lines and structures, anchors, cabinets, cables, conduits, guy posts and guy wires, meters, microwave and communication facilities, overhead and underground lines, pedestals, poles, regulators, sectionalizers, switchgears, transformers; various pad mounted and pole mounted equipment, vaults, wires, and all 2 other related electrical equipment required for the distribution, generation, maintenance, operation, purchase, and transmission of electrical energy. 2.5 "Public Easements" refers to easements created and available for use by any public utility for its facilities. 2.6 "Private Easements" refers to easements created and available only for use by the Company for its Facilities, or by the Company and other selected users or utilities. 2.7 "Residents" refers to and includes all persons, businesses, industry, governmental agencies, and any other entity whatsoever, presently maintaining a residence, business, farm, ranch or other enterprise located within, in whole or in part, the boundaries of the Town. 2.8 "Revenues ", unless otherwise specified, refers to and are the gross amounts of money that the Company receives from its customers within the Town from. the sale of electrical energy for any particular period of time. 2.9 "Streets and Other Public Ways" refers to streets, alleys, viaducts, bridges, roads, lanes and other public ways in the Town, subject to limitations stated herein. ARTICLE LE 3 GRANT OF FRANCHISE 3.1 Grant of Right to Serve. Subject to the conditions, terms and provisions contained in this Franchise, the Town hereby grants to the Company a non - exclusive right, privilege and authority to locate, build, install, construct, acquire, purchase, extend, maintain, repair and operate into, within and through all of the Town boundaries all necessary and convenient Facilities for the purchase, generation, transmission, and distribution of 3 electrical energy. Such grant is made together with the non - exclusive right and privilege to furnish, sell, and distribute said electrical energy to the Residents for light, heat, power and other purposes. 3.2 Scope of Grant. Such grant includes the right and the obligation to furnish electrical energy using the Company's Facilities, either overhead, underground, or otherwise, on, over, under, along, across and through any and all Streets and Other Public Ways, and on, over, under, along, across and through any extension, connection with, or continuation of, the same and /or on, over, under, along, across and through any and all such new Streets and Other Public Ways as may be hereafter laid out, opened, located, or constructed within the boundaries of the Town. The Company is further granted the right, privilege and authority to excavate in, occupy and use any and all Streets and Other Public Ways and Public Easements. Any such excavation, occupation and use must be in accordance with Town standards and regulations, and will be undertaken under the supervision of the properly constituted authority of the Town for the purpose of bringing electrical energy into, within and through the Town and supplying electrical energy to the Residents. 3.3 Service to Town Facilities. The Town hereby grants to the Company the right, privilege, and authority to provide street and security lighting to the Town, and to serve all Town owned or operated structures, plants, equipment, or Town apparatus and facilities, including the right, privilege, and authority to furnish, sell, and distribute electrical energy necessary for such. 3.4 Duration of Franchise. This Ordinance shall be in full force and effect from and after its passage as by law required and the terms, conditions and covenants hereof shall remain in full force and effect for a period of twenty (20) years from and after such enactment. 4 ARTICLE 4 SPECIFIC ELEMENTS OF GRANT 4.1 Recreational Areas. The Company shall not have the right to locate, build, or construct Facilities under, across, or through public parks or recreational areas, open space or other Town owned property located within the Town except as expressly set forth in this Franchise or with prior written approval granted by the Town's Council. This Ordinance shall never be construed to limit the Company's rights of eminent domain as provided by law. 4.2 Trees and Shrubs. The Company shall have the right to control the growth of trees and shrubs as may be reasonably necessary to protect its Facilities. The Company may use machinery or other lawful methods to control such growth, but shall not use chemicals for such purpose. Annually, on a date mutually agreed to by both parties, representatives of each party shall meet and /or consult to discuss problems related to the means and methods of controlling such growth. Prior to cutting down or removing any tree, the Company shall consult with a representative of the Town for the purpose of determining whether such cutting or removal is the only. reasonable and cost effective means of protecting the Company's Facilities. 4.3 Location of Company's Facilities. Wherever reasonable and practicable, the Company will endeavor to install its Facilities within Public Easements. The Company shall locate its Facilities within the Town so as to cause minimum interference with any of the Town's facilities or property, including without limitation water lines, sewer lines, storm drains, and the proper use of Streets and Other Public Ways, and so as to cause minimum 5 interference with the rights or reasonable convenience of property owners whose property adjoins any of the said Streets and Other Public Ways. 4.4 Restoration of Public and Private Improvements. Should it become necessary for the Company, in exercising its rights and performing its duties hereunder, to interfere with any sidewalk, graveled or paved street, road, alley, water line, sewer line, storm drain, or any other public or private improvement, the Company shall at its own expense and in a quality workmanlike manner, repair or cause to be repaired and restored to its original condition such sidewalk, graveled or paved street, road, alley, water line, sewer line, storm drain, or other public or private improvement after the installation of its Facilities, provided, however, that upon failure of the Company to do such required repairs within a reasonable time and in a workmanlike manner, the Town may perform the required work and charge the Company for all reasonable costs thereof. 4.5 Use of Facilities. The Company shall have the right to make such use of its Facilities and other property owned by Company, for uses other than the uses contemplated in the Franchise Ordinance, as it deems proper so long as such other uses do not interfere with its ability to supply electrical energy. 4.6 Changed Conditions — Overhead. If at any time it shall be necessary to change the position of any overhead electrical Facilities of the Company to permit the Town to lay, make or change street grades, pavements, sewer mains, water mains, storm drains, or other Town works, such changes shall be made by the Company at its own expense, after reasonable notice from the Town. This provision shall not apply to any changes that result from new development within the Town. The costs associated with changing G1 overhead electric facilities to accommodate such new development shall be borne by the developer, the Town or some other party, but not the Company. 4.7 Compliance with Town Requirements. The Company shall comply with all Town requirements regarding curb and pavement cuts, excavating, digging and related construction, maintenance and operational activities except as otherwise provided for in this Franchise Ordinance. 4.8 Town Review of Construction and Dgsien. Prior to construction of any significant Facilities within the Town, if requested by the Town, the Company shall furnish to the Town the plans for such proposed construction. In addition, the Company shall assess and report on the impact of its proposed construction on the Town environment. Such plans and reports may be reviewed by the Town to ascertain, inter alia, (1) that all applicable laws including building and zoning codes and air and water pollution regulations are complied with; (2) that aesthetic and good planning principles have been given due consideration; and (3) that adverse impact on the environment has been minimized. 4.9 Capital Improvement Projects. The Company and the Town shall inform one another of any capital improvement projects anticipated within the Town that may impact the facilities or operations of either party. The party proposing such capital improvements shall inform the other party of the nature of such improvements within a reasonable time after plans for such improvements have been substantially formulated. Each party shall cooperate in the timely exchange of all necessary information, design data, drawings, and reports to properly assess and evaluate the potential impacts of said improvements. 4.10 Maintenance of Facilities. The Company shall install, maintain, repair, replace, and upgrade its Facilities to ensure both the adequacy of, and quality of, electric service to all W Residents. All excavation and construction work done by or under the authority of the Company shall be done in a timely and expeditious manner which minimizes the inconvenience to the Town and all Residents. 4.11 Town Not Required to Advance Funds. Upon receipt from the Town of an authorization to proceed, and a promise to pay for construction, the Company shall extend its Facilities to the Town for municipal uses therein or for any municipal facility outside the boundaries of the Town and within the Company's certificated territory, without requiring the Town to advance funds prior to construction. 4.12 Scheduled Interruptions. The Company shall, whenever possible, give notice, either oral or written, to the Town and its affected Residents, of planned service interruptions of significant duration. 4.13 Cooperation with Other Utilities. When undertaking a project of undergrounding, the Town and the Company shall work with other utilities or companies to attempt to have all lines undergrounded as part of the same project. The Company shall not be required to pay the costs of any other utility in connection with work under this section. ARTICLE 5 RATES, REGULATIONS, UNIFORMITY OF SERVICE, AND UPGRADES 5.1 Furnishing Electrical Energy. The Company shall furnish electrical energy within the boundaries of the Town, and to the Residents thereof at the Company's applicable and effective rates and under the terms and conditions set forth in the Rate Schedules, Standards for Service, Rules and Regulations, and Service Connection and Extension Policies, adopted by and on file with the Company, subject only to regulations thereof as 8 is provided by law. The Company shall not, as to rates, charges, service, facilities, rules, regulations or in any other respect, make or grant any preference or advantage to any Resident, provided that nothing in this grant shall be taken to prohibit the establishment from time to time of a graduated scale of charges and classified rate schedules to which any customer coming within an established classification would be entitled. 5.2 Facility Upgrades. The Company will, from time to time, during the term of this Franchise make such improvements, enlargements and extensions of its Facilities incorporating, when reasonable and practical, technological advances within the industry as the business of the Company and the growth of the Town justify, in accordance with its Standards for Service, Rules and Regulations, and Service Connection and Extension Policies for electric service concurrently in effect and on file with the Company, subject only to regulations thereof as is provided by law. 5.3 Reliable Supply of Electricity. The Company shall take all reasonable and necessary steps to provide an adequate supply of electricity to its customers at the lowest reasonable cost consistent with long -term reliable supplies. If the supply of electricity to its customers should be interrupted, the Company shall take all necessary and reasonable actions to restore such supply within the shortest practicable time. In the event the Company's electric system, or any part thereof, is partially or wholly destroyed or incapacitated, the Company shall use due diligence to restore its system to satisfactory service within the shortest practicable time. 5.4 Maps and Regulations. The Company shall submit copies of its Standards for Service, Service Connection and Extension Policies, Rules and Regulations, and maps of its Facilities within the Town boundaries to the Town Clerk. All changes in such maps, 9 Standards for Service, Rules and Regulations, and policies, shall be submitted to the Town as the same may from time to time occur. 5.5 Subdivision Review. The Company shall analyze any subdivision plats or planned unit development plans submitted to it by the Town and respond to any request by the Town for information regarding the adequacy of its Facilities necessary to serve such proposed plat or plan and answer any other questions posed to the Company by the Town regarding said plat or plan as are within the knowledge of the Company. The Company shall respond to said requests or questions within reasonable time limits set by the Town's Subdivision Regulations. 5.6 Interrelationship of Laws, Rates, Regulations and Ordinances. The Company shall comply with all County, State or Federal laws, and rules and regulations related to the subject matter hereof. The Company also agrees to abide by all ordinances and resolutions of the Town, unless and except to the extent that this Franchise Ordinance shall relieve the Company of the obligation to comply with the terms and conditions of such other ordinances or any other provisions hereof. The Company, from time to time, may promulgate such rules, regulations, terms and conditions governing the conduct of its business, including the use of electrical energy and the payment therefor, and the interference with, or alteration of, any of the Company's property upon the premises of its customers as shall be necessary to provide a safe, continuous and uninterrupted service to each and all of such customers and the proper measurement thereof and payment therefor. Any such rules, regulations, terms and conditions must not be inconsistent with this Franchise Ordinance, but no ordinance of the Town may regulate the Company's rates or charges for the furnishing of electrical energy, or shall lessen the safety of providing such 1101 energy to its customers, nor shall any such ordinance alter the manner in which service is extended to such customers. ARTICLE 6 USE OF COMPANY FACILITIES 6.1 Use of Poles by Town. The Town shall have the right, without cost, to jointly use all poles and suitable overhead structures within the Town for the purpose of stringing wires thereon for any reasonable Town authorized use; which use shall not include the distribution or transmission of electricity; provided, however, that the Company shall assume no liability, nor shall it be put to any additional expense, in connection therewith, and said use shall not interfere in any unreasonable manner with the Company's use of same, or the use thereof by the Company's permittees, licensees, or other existing users of such Facilities. The Company agrees to permit Town licensees, permittees and franchisees, except those holding an electric utility franchise or license from the Town, to use its Facilities upon reasonable terms and conditions to be contractually agreed upon with the Company, in writing. 6.2 Joint Use of Trenches. If the Company installs new electric underground conduit or opens a trench or replaces such conduit, the Company shall provide adequate advance notice to permit additional installation of similar facilities in the same trench by the Town, or installation of other types of municipal facilities, subject to applicable rules and regulations. If the Town elects to use the trench it will so notify the Company. The Town shall provide the materials at no expense to the Company. The Town shall reimburse to the Company only those monies paid by the Company to an independent 11 contractor for labor costs to install Town furnished materials by such independent contractor. The Company shall include copies of invoices from the independent contractor to substantiate the Company's request for reimbursement. If the installation of Town furnished materials is performed solely by the Company's employees, there will be no labor charge to the Town. Such action by the Town shall not unnecessarily interfere with the Company's Facilities or delay the accomplishment of the project. The Town shall be responsible for ensuring that required vertical and horizontal separations between its facilities and that of the Company's is strictly maintained. The Town and Company shall jointly hold each other harmless from any liability or damage resulting from their respective facilities being installed in a joint trench. ARTICLE 7 INDEMNIFICATION AND POLICE POWER 7.1 Town Held Harmless. The Company shall indemnify, defend and save the Town, its officers and employees, harmless from and against all liability or damage and all claims or demands whatsoever in nature arising out of the operations of the Company within the Town pursuant to this Franchise, and the securing of, and the exercise by the Company of, the Franchise rights granted in this ordinance and shall pay all reasonable expenses arising therefrom. The Town shall provide prompt written notice to the Company of the pendency of any claim or action against the Town arising out of the exercise by the Company of its Franchise rights. The Company will be permitted, at its own expense, to appear and defend or to assist in defense of such claim. Notwithstanding any provision hereof to the contrary, the Company shall not be obligated to indemnify, defend or hold 12 the Town harmless to the extent of any claim, demand, or lien arising out of, or in connection with, any negligent act or failure to act by the Town or any of its officers, employees, or agents unless the Company shall become obligated to indemnify, defend or hold the Town harmless by virtue of the comparative negligence laws of Colorado. 7.2 Police Power Reserved. The right is hereby reserved to the Town to adopt from time to time, in addition to the provisions herein contained, such ordinances as may be deemed necessary in the exercise of its police power, provided that such regulations shall be reasonable and not destructive of the rights herein granted, and not in conflict with the laws of the State of Colorado, or with orders of other authorities having jurisdiction in the premises. ARTffC L1E 8 FRANCHISE FEE 8.1 Franchise Fee. In consideration for the grant of this Franchise, the Company shall pay to the Town a sum equal to three percent (3 %) of its gross Revenues collected from the sale of electricity within the boundaries of the Town. Electric Revenues received from service to the Town facilities will not be assessed a 3% fee under this section nor will the Town be paid the 3% fee from such Revenues collected from Town facilities. To the extent required by law, the three percent (3 %) shall be surcharged to the Residents. This surcharge is in addition to any charges specified in the Company's tariffs and any applicable taxes. 8.2 Change of Franchise Fee — Town Initiated. The Town expressly reserves the right to notify the Company of its desire to revise the Franchise Fee to a different percentage of 13 8.3 8.4 8.5 revenue prior to October 1 of the even numbered years during the term of this franchise, which revised Franchise Fee shall become effective on the next succeeding January 1, following notification. Provided, however, that the maximum amount of the Franchise Fee shall be five percent (5 %) of the Revenues collected within the boundaries of the Town. Notification to the consumer shall be given by the Town no less than thirty (30) days prior to January 1, the effective date of the scheduled increase. All expenses associated with notification shall be paid entirely by the Town. Payment. Payment of the Franchise Fee shall be made by the Company to the Town on or before thirty (30) days after the end of each quarter of each calendar year for the preceding three (3) month period, but shall be adjusted for the portions of the calendar quarters at the beginning and at the end of this Franchise. All payments shall be made to the Town Clerk. Revenue Audit. For the purpose of ascertaining or auditing the correct amount to be paid under the provisions of this Article, the Company shall file with the Town Manager, or such other official as shall be designated by the Town from time to time, a statement, in such reasonable form as the Town may require, showing the total gross receipts received by the Company from the sale of electricity to Residents within the boundaries of the Town for the preceding three (3) month period. The Town Manager or any official appointed by the Council shall have access to the books of said Company for the purpose of confirming the gross Revenues received from operations within the Town. Correction of Underpayment /Overpayment. Should either the Company or Town discover either an underpayment or overpayment of the Franchise Fee, the party making such discovery shall inform the other party within a reasonable time. If the error is 14 substantiated as an underpayment, the Company shall make payment of the deficiency within thirty (30) days of the date the error was substantiated. If the error is substantiated as an overpayment, a credit equal to the overpayment will be applied to the next Franchise payment due the Town. 8.6 Occupation Tax Alternative. In the event the said Franchise Fee levied herein should be declared invalid and/or shall be set aside by a Court of competent jurisdiction, then, and in such event, and in lieu thereof, the Town may thereafter levy an occupation tax upon the Company, not to exceed in any one calendar year five percent (5 %) of the gross Revenues collected from the sale of electricity within the boundaries of the Town for that calendar year. Such occupation tax shall be adjusted for any Franchise Fees previously paid to the Town in such calendar year. In the event the Town shall enact such an occupation tax, in lieu of the Franchise Fee, all of the remaining terms, conditions and provisions of this Ordinance shall remain in full force and effect for the period stated herein. Such occupation tax ordinance or enactment shall be designed to meet all legal requirements to ensure that it is not construed as an income tax. 8.7 Franchise Fee Payment in Lieu of Other Fees. The Franchise Fee paid by the Company is accepted by the Town in lieu of any occupation tax, license tax, permit charge, inspection fee, contractors license fees, or similar tax on the privilege of doing business or in connection with the physical operation thereof, but does not exempt the Company from any lawful taxation upon its property or any other tax not related to the Franchise or the physical operation thereof and does not exempt the Company from payment of head taxes or other fees or taxes assessed generally upon business. I& 8.8 Payment of Expenses Incurred by Town in Relation to Ordinance. At the Town's option, the Company shall pay in advance or reimburse the Town for expenses incurred in publication of notices and ordinances and for photocopying of documents arising out of the negotiations or process of obtaining this franchise. 8.9 Termination of Franchise. If this Franchise is terminated by either the Company or the Town for whatever reason, or is declared null and void, all Franchise Fees or occupation taxes levied herein shall be suspended as of the date the Franchise is legally terminated. Final payment of any Franchise Fee or occupation tax owed and due the Town shall be made on or before thirty (30) days after the date the Franchise is legally terminated. ARTICLE 9 REPORTS 9.1 Reports. The Company shall submit reasonable and necessary reports containing, or based upon, information readily obtainable from the Company's books and records as the Town may request with respect to the operations of the Company under this Franchise, and shall, if requested, provide the Town with a list of real property within the Town which is owned by the Company. 9.2 Copies of Tariffs. Upon request, the Company shall furnish the Town with copies of any tariffs currently in use. 16 ARTICLE L]E fl0 ADMINISTRATION 10.1 Amendments. At any time during the term of this Franchise, the Town through its Council, or the Company, may propose amendments to this Franchise by giving thirty (30) days written notice to the other party of the proposed amendment(s) desired, and both parties thereafter, through their designated representatives, shall within a reasonable time, negotiate in good faith in an effort to agree upon a mutually satisfactory amendment(s). No amendment(s) to this Franchise shall be effective until mutually agreed upon in writing by the Town and the Company and until all public notice requirements pursuant to Colorado statutes, and ordinance requirements of the Town, have been met. This section shall not apply to Franchise Fee changes under Article 8. 10.2 Revocation of Privileges by Condemnation. In the event, at any time during the term of this Franchise, the Town shall condemn any of the Facilities of the Company within the boundaries of the Town, and thereby revoke all or any part of the privilege and authority herein granted to the Company to serve the Residents, then and in such event the Town shall pay to the Company just compensation as provided by the laws of the State of Colorado for such rights and facilities by reason of such condemnation. 10.3 Compliance Impaired. Both the Company and the Town recognize there may be circumstances whereby compliance with the provisions of this Franchise is impossible or is delayed because of circumstances beyond the Company's or Town's control. In those instances, the Company or Town shall use its best efforts to comply in a timely manner and to the extent possible. 17 10.4 Company's Failure to Perform. It is agreed that in case of the failure of the Company to perform and carry out any of the stipulations, terms, conditions, and agreements herein set forth in any substantial particular, wherein such failure is within the Company's control and with respect to which redress is not otherwise herein provided, the Town, acting through its Council, may, after hearing, determine such substantial failure; and, thereupon, after notice given the Company of such failure, the Company may have a reasonable time, not less than ninety (90) days, unless otherwise agreed by the parties, in which to remedy the conditions respecting which such notice shall have been given. After the expiration of such time and the failure to correct such conditions, the Council shall determine whether any or all rights and privileges granted the Company under this ordinance shall be forfeited and may declare this Franchise null and void. 10.5 Ownership of Facilities. All Facilities used or placed by the Company, either within or outside the boundaries of the Town shall be and remain the property of the Company. 10.6 Transfer of Rights. The Company shall not transfer or assign any rights under this Franchise to a third party, excepting only corporate reorganizations of the Company not including a third party, unless the Town shall approve in writing such transfer or assignment. Approval of the transfer or assignment shall not be unreasonably withheld. 10.7 Removal of Facilities. Upon the expiration of this Franchise, if thereafter the Company Facilities shall not be used for electric, telephone, or cable TV purposes for a period of twelve (12) successive months; the Town shall have the option of having the Company remove such Facilities or claim such Facilities as its own. If the Town should require the Company to remove its Facilities such removal shall only apply to those Facilities that are above ground and have a visual impact on the surrounding area. If the Town elects to 18 have the Company remove the Facilities, it shall give written notice to the Company within thirty (30) days after expiration of the twelve (12) month period above described directing it to remove such Facilities, and the Company shall remove the same no later than ninety (90) days after the date of such notice, unless the Company and the Town agree to a longer period within which removal shall occur. Any Facilities, either underground or overhead, remaining after the twelve (12) month, thirty (30) day, and ninety (90) day periods above described, that have not been expressly claimed by the Town or removed by the Company, shall be deemed to have been abandoned. Any cost incurred by the Town in removing abandoned Facilities, and any liability associated with Facilities abandoned by the Company shall be the liability of the Company. For any Facilities claimed by the Town, any liability associated with such Facilities shall become the liability of the Town. 10.8 Non - renewal of Franchise; Alternative Electric Service. If this Franchise is not renewed, or if it is declared null and void, or the Company terminates any service provided for herein for any reason, and the Town has not provided for alternative electric service to the Residents, the Company shall not remove its Facilities and shall be obligated to continue electric service to the Residents until alternative electric service is provided. The Company will not withhold any temporary services necessary to protect the public. A><8'1<'> C LlE 11 COMMUNITY ENHANCEMENT FUND 11.1 Purpose. The Company is committed to programs designed to make a difference in people's lives and the communities in which they reside. The Company will voluntarily WE make monetary resources available to the Town for such programs and /or activities. Programs for which such funds shall be spent shall be limited to: (1) Beautification projects; (2) Energy conservation projects; (3) Equipment and technology upgrades for schools; (4) Scholarship funds; (5) Acquisition of open space and /or park land and development thereof, (6) Sponsorship of special community events; (7) Undergrounding of overhead electric and other utility lines. Funds made available under this Article may be spent for other purposes only with the express written consent of the Company. This program has been initiated solely by the Company; the Town has not made the program a requirement for this Franchise. Funding for this program is not a cost of doing business but is a voluntary contribution by the Company. 11.2 Payments to the Fund. After enactment of this Ordinance, the Company will establish an initial fund amount of $2,000.00. The Company shall then make annual payments to the fund equal to one percent (1 %) of its prior year's gross Revenues, prorated for the portions of the months at the beginning and end of the term of this Franchise, collected from the sale of electricity within the boundaries of the Town, or $2,000.00, whichever amount is greater. Said payments shall be made into the fund no later than February 15`h of the year subsequent to the year in which the gross Revenues are received by the Company. 11.3 The Fund. The Fund established by the Company shall be maintained in a bank account in the name of the Town, but shall be maintained separately from all other funds and accounts held by the Town. 11.4 Payments from the Fund. All payments from the fund shall be for projects described in Section 11.1 hereof. Prior to any such expenditure, authorization to withdraw from the 20 fund shall be given by resolution or ordinance duly enacted by the Council, and such resolution or ordinance shall clearly describe the nature and purpose of the project for which the expenditure is made. Prior to any expenditure, the Town shall notify the Company of its intended use of the funds. Unless the Company objects, in writing, prior to such expenditure, the Company shall have waived its right to object in the future if the funds are expended for the use identified in the notice. 11.5 Audits. The Town may audit the Company's books related to gross Revenues collected within the Town at any reasonable time and with reasonable prior notice. The Company may audit the fund account, expenditures from the fund, and resolutions and ordinances authorizing such expenditures at any reasonable time and with reasonable prior notice. 11.6 Forfeiture of Enhancement Funds. The Company shall have the express right to temporarily suspend or terminate in full its annual contributions to the Enhancement Fund if it is determined that funds allocated and paid to the Town are being, or have been, misappropriated, administered with bias or discrimination, or for other inappropriate actions. 11.7 Advances of Funds. The Company shall consider advances of funds, subject to the provisions of this Section, for all such projects that specifically involve undergrounding of overhead lines or projects acceptable to the Company which are related to the Company's existing Facilities. The Town shall make all reasonable attempts to plan and budget use of the Fund without advancement of future Funds. However, if the Town requests and the Company and the Town agree that it is in the mutual interest of both, the Company shall anticipate Fund amounts to be available for up to three (3) years in advance. Both parties shall enter into a special agreement concerning the advanced 21 Funds. Any amounts advanced shall be credited against amounts to be expended in succeeding years until such advances are eliminated. AlEBT11C L]E 12 UNDERGROUNDING 12.1 At Consumer's Request. If a customer within the Town should request that new facilities be installed underground, or for the conversion of existing overhead facilities to underground facilities, or if Town ordinances or resolutions require a customer or customers to install facilities underground, the Company shall proceed in accordance with its Line Extension Policy, Advice Letter Number 8, dated July 30, 1976 (herein "Line Extension Policy ") and in accordance with its Policy Statement, Conversion From Overhead to Underground Facilities, June 15, 1988 (herein "Underground Conversion Policy "), as each may from time to time be amended. 12.2 Town Requested Undergrounding. Except for the Company's contributions to the Community Enhancement Fund, which may be used by the Town to pay for the undergrounding of the Company's Facilities, any request, requirement imposed by resolution or ordinance, or other communication from the Town to the Company, asking, or requiring the Company to underground new facilities or existing overhead facilities, or move, remove, or replace existing underground facilities, shall be responded to in accordance with the provisions of the Company's Line Extension Policy, Underground Conversion Policy, or other customary practice in use by the Company. The Town acknowledges receipt of a copy of both policies. 22 12.3 Relocation of Underground Facilities. Nothing hereinabove shall be construed to obligate the Company to pay for the removal and relocation of its Facilities where such is at the request or demand of a person, or a public or private entity under circumstances which require the party requesting or demanding such to pay for the relocation under other provisions hereof, or under the provisions of the Company's Line Extension Policy, Underground Conversion Policy, or other customary practice in use by the Company. 12.4 Governmental Mandates. This Franchise or the Town Municipal Code, as either may be amended from time to time, shall not prohibit or limit the Company's right to enforce its collection of the increased costs of new underground construction, or conversion, in accordance with the provisions of the Company's Line Extension Policy, Underground Conversion Policy, customary practices of the Company, or state law. Anything in this Franchise, or in the Municipal Code, that would be a contributing factor to the ultimate effect of causing the Company to convert overhead electric lines or Facilities to underground lines or Facilities, or which would result in new construction of lines or Facilities being placed underground, when such could have been constructed overhead, shall be deemed to be a mandatory requirement of the Town. ARTICLE 13 MISCELLANEOUS 13.1 Changes in Utility Regulation. In the event new legislation materially affects the terms and conditions of this Franchise Ordinance, the parties agree to renegotiate the affected terms and conditions in good faith. The parties hereto acknowledge that regulatory and legislative changes in the electric utility, gas utility and other energy industries are 23 currently being discussed nationwide and statewide; that some changes in utility industry sectors have already been implemented; and that other changes may be made in the future, during the teen of this Franchise. One likely scenario is the implementation of open access to electric customers, and other energy customers, making such customers available to all utilities, thus eliminating or limiting territorial protections. Under this scenario one utility may contract to sell a type of energy to a customer, *pile another utility transports the energy to the customer for a fee charged to the other utility or the customer. The parties agree, that insofar as future changes in the utility laws will allow, the Company shall always retain the right to bill customers for electric utility transportation services and electric energy sales within the Town if it is the provider of either the 0 electric energy product or the transportation of such product. The parties agree that this will provide the most efficient and convenient electric utility service to the Residents and provide assurance to the Town of franchise fee collection for each component charged for the sale and delivery of electric energy products within the boundaries of the Town. 13,2 Successors and Assigns. The rights, privileges, franchises and obligations granted and contained in this Ordinance shall inure to the benefit of and be binding upon the Company, its successors and assigns. 13.3 Representatives. Both parties shall designate frorn time to time in waiting representatives to act as franchise agents for the Company and the Town. Such will be the persons to whom notices shall be sent regarding any action to be taken under this Ordinance. Notice shall be in writing and forwarded'by certified mail or hand delivery to the persons and addresses as hereinafter stated, unless the persons and addresses are changed at the 24 13.4 13.5 14.1 14.2 written request of either party. Until any such change shall hereafter be made, notices shall be sent to the Town Mayor and to the Company's General Manager. Currently the addresses for each are as follows: For the Town: Judy Yoder, Mayor Town of Avon P. O. Box 975 400 Benchmark Road Avon, CO 81620 For the Company Holy Cross Energy Attention: General Manager P.O. Drawer 2150 3799 Highway 82 Glenwood Springs, CO 81602 Severability. Should any one or more provisions of this Franchise be determined to be illegal or unenforceable, all other provisions nevertheless shall remain effective; provided, however, the parties shall forthwith enter into good faith negotiations and proceed with due diligence to draft provisions that will achieve the original intent of stricken provisions. Entire Agreement. This Franchise constitutes the entire agreement of the parties. There have been no representations made other than those contained in this Franchise. ARTICLE 14 APPROVAL Town Approval. This grant of Franchise shall not become effective until approved by the Town in accordance with its ordinances and the statutes of the State of Colorado. CompanyApproval. The Company shall file with the Town Clerk its written acceptance of this Franchise and of all its terms and provisions within fifteen (15) business days after the final adoption of this Franchise by the Town. The acceptance shall be in the form and 25 content approved by the Town Attorney. If the Company shall fail to timely file its written acceptance as herein provided, this Franchise shall become null and void. 14.3 Public Health, Safety and Welfare. The Council hereby finds, determines and declares that this Ordinance is necessary and proper for the health, safety and welfare of the Town and the Residents thereof. INTRODUCED, PASSED ON FIRST READING, APPROVED AND ORDERED POSTED, this day of , 2000, and a public hearing on this Ordinance shall be held at the regular meeting of the Town Council of the Town of Avon, Colorado on the day of 2000, at 5:30 p.m., in the Municipal Building of the Town of Avon, Colorado. Attest: Kris Nash, Town Clerk INTRODUCED, PASSED ON SECOND READING, APPROVED AND ORDERED POSTED, this day of , 2000. Attest: Kris Nash, Town Clerk APPROVED AS TO FORM: Burt Levin, Town Attorney 26 Judy Yoder, Mayor