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TC Ord. No. 2004-06 Granting by franchise to public service company of Co its affiliates successors and addings the right to use the streets within the town to furnish sell, transport and distribute gas to the Town and to alll residents of the town grantiTOWN OF AVON, COLORADO ORDINANCE NO. 04-06 SERIES 2004 AN ORDINANCE OF THE TOWN OF AVON, EAGLE COUNTY, COLORADO, GRANTING BY FRANCHISE TO PUBLIC SERVICE COMPANY OF COLORADO, ITS AFFILIATES, SUCCESSORS AND ASSIGNS, THE RIGHT TO USE THE STREETS WITHIN THE TOWN TO FURNISH, SELL, TRANSPORT AND DISTRIBUTE GAS TO THE TOWN AND TO ALL RESIDENTS OF THE TOWN, GRANTING THE RIGHT TO ACQUIRE, CONSTRUCT, INSTALL, LOCATE, MAINTAIN, OPERATE AND EXTEND INTO, WITHIN AND THROUGH THE TOWN ALL FACILITIES REASONABLY NECESSARY TO FURNISH, SELL, TRANSPORT AND DISTRIBUTE GAS WITHIN AND THROUGH THE TOWN; AND FIXING THE TERMS AND CONDITIONS THEREOF. WHEREAS, Public Service Company of Colorado has filed it application with the Town of Avon, Colorado, for the granting to it by the Town of Avon of a franchise in terms as hereinafter set forth; and BE IT ORDAINED BY THE TOWN COUNCIL OF AVON, EAGLE COUNTY, COLORADO: ARTICLE 1 DEFINITIONS §1.1 For the purpose of this franchise agreement, the following words and phrases shall have the meaning given in this article. When not inconsistent with context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is mandatory and "may" is permissive. Words not defined in this article shall be given their common and ordinary meaning. § 1.2 "Council" or "Town Council" refers to and is the legislative body of the Town of Avon, Eagle County, Colorado. §1.3 "Company" refers to and is Public Service Company of Colorado, its successors, assigns, affiliates and subsidiaries. § 1.4 "Facilities" refer to and are all apparatuses reasonably necessary for the Company to provide gas service into, within and through the Town, including but not limited to plants, works, systems, substations, equipment, pipes, mains, conduit, gas compressors, Ordinance No. 04-06 Page 1 of 13 meters, meter reading devices, communication and data transfer equipment, control equipment, gas regulator stations,. §1.5 "Party" or "Parties" refers to and includes the Company and the Town, either singly or collectively as the context requires. § 1.6 "Public Utilities Commission" or "PUC" refers to and is the Public Utilities Commission of the State of Colorado or other state agency succeeding to the regulatory powers of the Public Utilities Commission. §1.7 "Residents" refers to and includes all persons, businesses, industry, governmental agencies, and any other entity whatsoever, presently located or hereinafter to be located, in whole or in part, within the territorial boundaries of the Town. §1.8 "Revenues" refer to and are those amounts of money which the Company receives from its customers within the Town from the sale of gas under rates authorized by the Public Utilities Commission as well as from the transportation of gas to its customers within the Town and represents amounts billed under such rates as adjusted for refunds, net write- off of uncollectible accounts, corrections or regulatory adjustments. Regulatory adjustments refer to, by way of explanation, but not limitation, credits, surcharges, refunds and pro-forma adjustments pursuant to federal or state regulation. § 1.9 "Streets" refer to and are streets, alleys, viaducts, bridges, roads, lanes and other public rights-of-way in the Town. "Streets" shall also include public easements and other public places within the Town that are suitable locations for the placement of Facilities. §1.10 "Town" refers to and is the municipal corporation designated as the Town of Avon, Eagle County, Colorado. ARTICLE 2 GRANT OF FRANCHISE §2.1 Grant of Franchise. The Town hereby grants to the Company the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the Town. The Town also hereby grants to the Company the right to Ordinance No. 04-06 Page 2 of 13 acquire, construct, install, locate, maintain, operate and extend into, within and through the Town all Facilities reasonably necessary to furnish, sell, transport and distribute gas within and through the Town. These rights shall extend to all areas of the Town as it is now constituted and to additional areas as the Town may increase in size by annexation or otherwise. If the boundaries of the Town are expanded during the term of this franchise, the Company shall extend service to Residents in the expanded area at the earliest practicable time and in accordance with the Company's extension policy. Service to the expanded area shall be in accordance with requirements of the PUC and the terms of this franchise, including payment of franchise fees. The rights granted by this franchise are not, and shall not be deemed to be, granted exclusively to the Company, and the Town reserves the right to make or grant a similar franchise to any other person, firm, or corporation. Except as otherwise specifically provided herein, the Town retains the right through the exercise of its police power to use, control, and regulate the use of the Streets, and the space above and beneath said Streets. The Town retains the right to impose such other regulations as may be determined by the Town to be necessary in the reasonable exercise of its police power to protect the health, safety, and welfare of the public. §2.2 Term of Franchise. This franchise shall take effect upon its adoption and shall supersede any prior franchise grants to the Company by the Town. The term of this franchise shall be twenty (20) years. AR9PICT F A FRANCHISE FEE §3.1 Franchise Fee As consideration for the franchise rights granted herein, and in recognition of the fact that the grant to the Company of the right to use Town Streets is a valuable right, the Company shall pay the Town a sum equal to three percent (3%) of all Ordinance No. 04-06 Page 3 of 13 Revenues received from the sale and transportation of gas within the Town, excluding revenues received from the Town for the sale of gas to the Town. §3.2 Surcharge of Franchise Fees. The Company shall charge a franchise fee to all Town residents that use facilities of the Company in Town Streets to obtain gas. No franchise fee shall be charged to the Town for gas service provided to the Town for its own consumption. §3.3 Remittance Schedule. Franchise fees that are collected from Residents shall be remitted by the Company to the Town in monthly installments not more than thirty (30) days following the close of each month. All payments shall be made to the Finance Director. In the event that either the Town or the Company discovers that there has been an error in the calculation of the franchise fee payment to the Town, the error shall be corrected in the next monthly payment, subject to the following provisions: In the event an error by the Company results in an overpayment of the franchise fee to the Town in excess of $5,000, credit for the overpayment shall be spread over the same period the error was undiscovered; if the overpayment is $5,000 or less, credit shall be taken against the next payment. In no event shall either Party be required to refund any over- or underpayment more than 3 years from the date of the over- or underpayment. §3.4 Audit Rights; Protection of Confidential Information. The Finance Director, or his or her agent, shall have access to the metering records of the Company during normal business hours upon reasonable notice for the purpose of auditing to ascertain that the franchise fee has been correctly computed and paid. Except as provided in Section 3.6, all information obtained by the Finance Director during a franchise fee audit shall be kept confidential and shall be utilized for the sole purpose of verifying that the franchise fee has been correctly computed and paid. §3.5 Enforcement of Town Sales and Use Tax Laws. The Town may use the metered information obtained from franchise fee audits for the purpose of enforcing its sales and use tax laws. Upon request by the Town, the Company shall supply the Town with a list Ordinance No. 04-06 Page 4 of 13 of all suppliers of gas that utilize Company Facilities within the Town Streets to sell gas to Town Residents. §3.6 Franchise Fee Payment in Lieu of Certain Taxes and Other Fees. The Town accepts payment of the franchise fee by the Company in lieu of any occupation tax, occupancy tax, license tax, or similar tax or fee the Town might charge the Company or its subcontractors for the privilege of doing business in the Town, for the use or occupation of Town Streets, or for the installation, operation and maintenance of Company Facilities. Payment of the franchise fee does not exempt the Company from any lawful taxation upon its property or from any other tax not related to the franchise or the occupation or use of Town Streets, including the payment of head taxes, sales taxes or other fees or taxes assessed generally upon businesses. ARTICLE 4 SUPPLY, CONSTRUCTION AND DESIGN §4.1 Obligations Regarding Company Facilities. The Company shall install, maintain, repair, renovate and replace its Facilities with due diligence in a good and workerlike manner. Company Facilities shall not interfere with the Town's water mains, sewer mains or other municipal uses of the Streets. The Company shall construct and maintain its Facilities in such a way as to minimize interference with trees and other natural features. The Company shall install underground all gas pipelines serving new residential subdivisions. §4.2 Excavation and Construction. All excavation and construction work performed by the Company shall be done in a manner that minimizes inconvenience to the public. All property disturbed by Company excavation or construction activities shall be restored by the Company at its expense to substantially its former condition. §4.3 Relocation of Company Facilities. The Company shall relocate, at its expense, Facilities in the Streets that interfere with a public project undertaken and paid for by the Town with public funds. The Town shall provide at its expense sufficient right-of-way for the Company to relocate its Facilities. The Company shall relocate its Facilities at the Ordinance No. 04-06 Page 5 of 13 request of the Town or other person to avoid interference with other non-publicly- financed projects, but the expense of the relocation and the new right-of-way shall be paid in advance by the Town or by the person conducting the project and requesting the relocation. Relocation shall be completed within a reasonable time after a request and payment therefore is made (if applicable). In the event that the Town requests the Company to relocate the same Facilities within five (5) years of completion of a prior relocation, the subsequent relocation shall be at the Town's expense. Underground Facilities shall be relocated underground. Above ground Facilities shall be relocated above ground, unless the Town pays the additional cost of relocating above-ground Facilities underground . §4.4 Town Not Required to Advance Funds. Upon receipt of the Town's authorization for billing and construction, the Company shall extend its Facilities to provide gas to the Town for municipal uses within the Company's certificated service area, without requiring the Town to advance funds prior to construction. Nothing in this section shall release the Town from the obligation to pay for the extension of Facilities once complete, in accord with the Company's gas tariffs on file with the Public Utilities Commission. ARTICLE 5 COMPLIANCE §5.1 Compliance with Applicable Laws. The Company and all of its contractors shall comply with all applicable Town laws, ordinances and regulations. The Company shall require its contractors working in the streets to hold the necessary licenses and permits required by the Town. §5.2 Compliance with Town Requirements. The Company will comply with all Town building and zoning codes and requirements regarding curb and pavement cuts, excavating, digging and related construction activities. Ordinance No. 04-06 Page 6 of 13 §5.3 Inspection. The Town shall have the right to inspect any portion of the Company's Facilities in the Town Streets. The Company agrees to cooperate with the Town in conducting the inspection. ARTICLE 6 PUBLIC UTILITIES COMMISSION REGULATION §6.1 Compliance with Orders by the Public Utilities Commission. The provision of gas service by the Company is regulated in whole or in part by regulatory agencies including the Public Utilities Commission. The Company is obligated by law to comply with all lawful PUC orders, rules, and regulations. The Town shall impose no obligation on the Company that interferes with the Company's ability to comply with lawful regulatory orders, rules, and regulations. §6.2 Certificates to Exercise Franchise Rights. The Town agrees to assist the Company, if necessary, in obtaining PUC approval of a certificate to exercise the franchise rights conferred under this Franchise, including negotiating a change to any provision of this franchise agreement which the PUC may require in order to obtain the certificate. ARTICIX.. 7 TOWN USE OF COMPANY FACILITIES §7.1 Trenches Available for Town Use. If the Company opens a trench to install its Facilities, the Company shall provide advance notice to the Town to permit the Town to install Town Facilities in the same trench at the Town's expense. The Town's installation of its Facilities shall not interfere with the Company's Facilities or delay the commencement or completion of the Company's construction project. ARTICLE 8 INDEMNIFICATION OF THE TOWN §8.1 Town Held Harmless and Indemnified. The Company shall indemnify, defend and hold the Town harmless from and against all liability or damage and all claims or demands Ordinance No. 04-06 Page 7 of 13 arising out of Company's operations within the Town pursuant to this franchise. 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 shall be permitted, at its own expense, to appear and defend or to assist in defense of such claim. The Company shall not be obligated to indemnify, defend, or hold the Town harmless to the extent any claim, demand or lien arises out of or in connection with any intentional or negligent act or failure to act of the Town or any of its officials, agents or employees, or to the extent that any claim, demand, or lien arises out of or in connection with the use of Town facilities. §8.2 Payment of Ordinance Expenses. The Company shall reimburse the Town for actual out- of-pocket expenses incurred in publishing notices and ordinances and conducting elections related to this franchise. AID T11-1 F Q TRANSFER OF FRANCHISE §9.1 Consent of Town Required. The Company shall not transfer or assign any rights under this franchise to an unaffiliated third party, except by merger with such third party, or, except when the transfer is made in response to legislation or regulatory orders, unless *the Town shall approve in writing such transfer or assignment. Approval of the transfer or assignment shall not be unreasonably withheld. §9.2 Transfer Fee. In order that the Town may share in the value this franchise adds to the Company's operations, any transfer or assignment of rights under this franchise requiring the approval of the Town under §9.1 shall be subject to the condition that the transferee shall promptly pay to the Town a transfer fee, which shall be calculated by multiplying one million dollars by a fraction of which the numerator equals the then population of the Town of Avon which is served by the Company, and the denominator equals the then population of the City and County of Denver. Such transfer fee shall not be recovered from a surcharge placed only on the rates of Town Residents. Ordinance No. 04-06 Page 8 of 13 ARTICLE 10 MUNICIPALIZATION §10.1 Town's Right to Condemn. During the term of this franchise, the Town agrees not to condemn the Facilities of the Company or to otherwise restrict the Company's opportunity to conduct business in the Town, except as specifically provided in C.R.S. § 31-15-707. §10.2 Operation of a Municipal Utility or Competing Distributors. If, during the term of this franchise, the Town operates a municipal gas utility or issues to another entity a franchise to use the Streets for the placement of gas Facilities, the Company shall no longer be required to collect and pay franchise fees under Article 3 unless substantially the same terms and conditions apply to the service provided by the Town or by the other entity. In addition, the following sections of this franchise shall no longer apply to the Company unless substantially the same provisions are applicable to all other gas distributors, including the Town: Articles 3.3, 3.4, 3.5, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 7.1, 9.1 and 9.2. ARTICLE 11 UNCONTROLLABLE FORCES § 11.1 Uncontrollable Forces. Neither the Town nor the Company shall be in breach of this franchise ordinance if a failure to perform any of the duties under this franchise is due to uncontrollable forces, which shall include but not be limited to accidents, breakdown of equipment, shortage of materials, acts of God, floods, storms, fires, sabotage, terrorist attack, strikes, riots, war, labor disputes, forces of nature, the authority and orders of government and other causes or contingencies of whatever nature beyond the reasonable control of the party affected, which could not reasonably have been anticipated and avoided. Ordinance No. 04-06 Page 9 of 13 ARTICLE 12 BREACH § 12.1 Breach. If the Company fails to perform any of the terms and conditions of this franchise and such failure is within the Company's control, the Town may notify the Company of the specific failure and shall allow the Company a reasonable time within which to remedy the failure. If the Company does not remedy the failure and the failure is of a substantial nature, the Town Council may terminate this franchise after a full evidentiary hearing. Termination of the franchise shall be by no less than 75% vote of all members of the Town Council. §12.2 Judicial Review. Any such termination of the franchise shall be subject to judicial review as provided by law. ARTICLE 13 AMENDMENTS § 13.1 Amendments to Franchise. This franchise may be amended only by a writing signed by both the Company and the Town, which is approved in the same manner as is required for the passage of this ordinance. ARTIC ,F. 1d. MISCELLANEOUS §14.1 Successors and Assigns. The rights, privileges, franchises and obligations, in whole or in part, granted and contained in this ordinance shall inure to the benefit of and be binding upon Public Service Company, its successors, assigns, affiliates and subsidiaries. § 14.2 Third Parties. Nothing contained in this franchise shall be construed to provide rights to third parties. §14.3 Representatives. Both parties shall, from time to time, designate, in writing, represen- tatives for the Company and the Town to whom notices shall be sent regarding any action to be taken under this ordinance. Notice shall be delivered in person or by certified mail to the persons and addresses hereinafter stated, unless the persons and addresses are Ordinance No. 04-06 Page 10 of 13 changed at the written request of either party. Until any such change shall be made, notices shall be sent as follows: To the Town: Town Clerk Town of Avon, Colorado P.O. Box 975 Avon, CO 81620 To the Company: Cynthia Evans Vice President Public Service Company of Colorado P. O. Box 840 Denver, CO 80201 § 14.4 Surcharge to Town Residents. The Company shall be permitted to surcharge to residents of the Town the franchise fee payments it makes to the Town. The Company shall be permitted to surcharge to residents of the Town any other payments it makes to the Town only to the extent and in the manner permitted by law or as otherwise ordered by the PUC. §14.5 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 a substitute term that will achieve the original intent of the Parties hereunder. § 14.6 Entire Agreement. This franchise constitutes the entire agreement of the Parties with respect to the matters contained herein and supersedes any and all prior written or oral agreements, negotiations, correspondence, understandings and communications with respect to this franchise. § 14.7 Headings for Reference Only. The headings in this franchise are for reference only and convey no substantive rights or impose no substantive obligations on the Parties. Ordinance No. 04-06 Page 11 of 13 § 14.8 Responsibility for Language. The Town and the Company hereby acknowledge that each bears co-extensive and identical responsibility for the language in this franchise. In case of ambiguity, there shall be no presumptions based upon responsibility for drafting this franchise. § 14.9 No Waiver of Rights. Neither the Town nor the Company waives any rights under the statutes and constitution of the State of Colorado or of the United States except as otherwise specifically set forth herein. § 14.10 Prevailing Party. In any judicial or administrative action to enforce any of the terms or conditions of this franchise, the prevailing party shall be entitled to recover its costs and expenses incurred in such action, including reasonable attorney fees. §14.11 Approval of Franchise. The Company shall promptly file, in writing, its acceptance of this franchise and of any amendment of this franchise following the Town's final approval of the same. The failure to file such an acceptance within 45 days of said final adoption shall be deemed an acceptance of such franchise or amendment thereof. INTRODUCED, READ, PASSED ON FIRST READING AND ORDERED POSTED THIS DAY OF QP~ 200 A PUBLIC HEARING ON THIS ORDINANCE SHALL BE HELD AT THE REGULAR MEETING OF THE TOWN COUNCIL ON THE I0-'-' DAY OF , 20 0"(.AT 5:30 PM IN THE COUNCIL CHAMBERS, AVON MUNICIPA BUILDING, 400 BENCHMARK ROAD, AVON, COLORADO 11 OF Albert D. Reynolds, Mayor El A If~~ ATTEST: Patty cK nny, To n C1 rk Ordinance No. 04-06 Page 12 of 13 INTRODUCED, PASSED, ADOPTED AND APPROVED ON SECOND READING AND 11 ORDERED POSTED THIS DAY OF m , 200 . ATTEST: Albert D. ,9 E A , Pat ~ Mc enny, Town n C®~ ~ .-z APPROVED AS TO FORM: Ut % To n Attorney Publication Dates: ACCEPTED: PUBLIC SERVICE COMPANY OF COLORADO By:_ Print Name & Title: Ordinance No. 04-06 Page 13 of 13 Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager From: Scott Wright, Finance Director Date: May 6, 2004 Re: Public Hearing - Gas Franchise Ordinance No. 04-06 Summary: The Town's current twenty-year gas franchise agreement with Public Service Company of Colorado ("PSCo") expires May 31, 2004. Staff has been working with Wade Haerle from Xcel Energy (the DBA name for PSCo) in drafting a new franchise agreement. Council, at it s last meeting, adopted on 1St reading this new franchise agreement. In summary, the franchise agreement conveys the right to PSCo to provide public utility service (in this case natural gas) within Town of Avon boundaries and allow the use of Town rights-of-way for the location of utility facilities and equipment, in exchange for the payment of a franchise fee. These rights are non-exclusive and the Town reserves the right to make or grant a similar franchise to any other company. The Town reserves the right to control and regulate the use of its streets and to impose other regulations to protect the health, safety and welfare of the public. PSCo shall not interfere with municipal uses of the streets and must comply with all Town building and zoning codes and requirements. The franchise agreement is for a term of twenty years. A CML survey indicated that most gas franchises are for twenty or twenty-five year terms. The franchise fee is equal to three percent (3%) of revenues. This is the typical approach and percentage found in most existing franchises. Xcel Energy paid $47,404 and $38,322 in franchise fees for 2003 and 2002, respectively. Town Manager Comments: , Page 1 STATE OF COLORADO ) COUNTY OF EAGLE ) SS TOWN OF AVON ) NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 11T" DAY OF MAY 2004, AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF THE FOLLOWING ORDINANCE: Ordinance No. 04-06, Series of 2004, An Ordinance of the Town of Avon, Eagle County, Colorado, Granting by Franchise to Public Service Company of Colorado, its affiliates, successors and assigns, the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the town, granting the right to acquire, construct, install, located, maintain, operate and extend into, within and through the Town all facilities reasonably necessary to furnish, sell, transport, and distribute gas within and through the Town; and fixing the Terms and conditions thereof. A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and may be inspected during regular business hours, Monday through Friday, 8 AM - 5 PM. Following this hearing, the Council may consider final passage of this Ordinance. This notice is given and posted by order of the Town Council of the Town of Avon, Colorado TOWN OF AVON, COLORADO BY: Patty McKenny Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON APRIL 30, 2004. ✓ AVON MUNICIPAL BUILDING, MAIN LOBBY ✓ ALPINE BANK, MAIN LOBBY ✓ AVON RECREATION CENTER, MAIN LOBBY ✓ CITY MARKET, MAIN LOBBY STATE OF COLORADO ) COUNTY OF EAGLE) SS TOWN OF AVON ) NOTICE IS HEREBY GIVEN THAT THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO ADOPTED ON THE 11TH DAY OF MAY 2004 THE FOLLOWING ORDINANCE: Ordinance No. 04-06, Series of 2004, An Ordinance of the Town of Avon, Eagle County, Colorado, Granting by Franchise to Public Service Company of Colorado, its affiliates, successors and assigns, the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the town, granting the right to acquire, construct, install, located, maintain, operate and extend into, within and through the Town all facilities reasonably necessary to furnish, sell, transport, and distribute gas within and through the Town; and fixing the Terms and conditions thereof. A copy of said Ordinance is attached hereto, and are also on file at the office of the Town Clerk, and may be inspected during regular business hours, Monday through Friday, 8 AM 5 PM. This notice is given and posted by order of the Town Council of the Town of Avon, Colorado TOWN OF AVON, COLORADO BY: Patty McKenny Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON MAY 14, 2004 ✓ AVON MUNICIPAL BUILDING, MAIN LOBBY ✓ ALPINE BANK, MAIN LOBBY ✓ AVON RECREATION CENTER, MAIN LOBBY ✓ CITY MARKET, MAIN LOBBY 4P STATE OF COLORADO ) COUNTY OF EAGLE) SS TOWN OF AVON ) NOTICE IS HEREBY GIVEN THAT THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO ADOPTED ON THE 11TH DAY OF MAY 2004 THE FOLLOWING ORDINANCE: Ordinance No. 04-06, Series of 2004, An Ordinance of the Town of Avon, Eagle County, Colorado, Granting by Franchise to Public Service Company of Colorado, its affiliates, successors and assigns, the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the town, granting the right to acquire, construct, install, located, maintain, operate and extend into, within and through the Town all facilities reasonably necessary to furnish, sell, transport, and distribute gas within and through the Town; and fixing the Terms and conditions thereof. A copy of said Ordinance is attached hereto, and are also on file at the office of the Town Clerk, and may be inspected during regular business hours, Monday through Friday, 8 AM 5 PM. This notice is given and posted by order of the Town Council of the Town of Avon, Colorado TOWN OF AVON, COLORADO BY: Patty McKenny Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON MAY 14, 2004 ✓ AVON MUNICIPAL BUILDING, MAIN LOBBY ✓ ALPINE BANK, MAIN LOBBY ✓ AVON RECREATION CENTER, MAIN LOBBY ✓ CITY MARKET, MAIN LOBBY 1* - r TOWN OF AVON, COLORADO ORDINANCE NO. 04-06 SERIES 2004 AN ORDINANCE OF THE TOWN OF AVON, EAGLE COUNTY, COLORADO, GRANTING BY FRANCHISE TO PUBLIC SERVICE COMPANY OF COLORADO, ITS AFFILIATES, SUCCESSORS AND ASSIGNS, THE RIGHT TO USE THE STREETS WITHIN THE TOWN TO FURNISH, SELL, TRANSPORT. AND DISTRIBUTE GAS TO THE TOWN AND TO ALL RESIDENTS OF THE TOWN, GRANTING THE RIGHT TO ACQUIRE, CONSTRUCT, INSTALL, LOCATE, MAINTAIN, OPERATE AND EXTEND INTO, WITHIN AND THROUGH THE TOWN ALL FACILITIES REASONABLY NECESSARY TO FURNISH, SELL, TRANSPORT AND DISTRIBUTE GAS WITHIN AND THROUGH THE TOWN; AND FIXING THE TERMS AND CONDITIONS THEREOF. WHEREAS, Public Service Company of Colorado has filed it application with the Town of Avon, Colorado, for the granting to it by the Town of Avon of a franchise in terms as hereinafter set forth; and BE IT ORDAINED BY THE TOWN COUNCIL OF AVON, EAGLE COUNTY, COLORADO: A RTTf T .F. 1 DEFINITIONS §1.1 For the purpose of this franchise agreement, the following words and phrases shall have the meaning given in this article. When not inconsistent with context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is mandatory and "may" is permissive. Words not defined in this article shall be given their common and ordinary meaning. §1.2 "Council" or "Town Council" refers to and is the legislative body of the Town of Avon, Eagle County, Colorado. §1.3 "Company" refers to and is Public Service Company of Colorado, its successors, assigns, affiliates and subsidiaries. §1.4 "Facilities" refer to and are all apparatuses reasonably necessary for the Company to provide gas service into, within and through the Town, including but not limited to plants, works, systems, substations, equipment, pipes, mains, conduit, gas compressors, Ordinance No. 04-06 Page 1 of 13 v meters, meter reading devices, communication and data transfer equipment, control equipment, gas regulator stations,. §1.5 "Party" or "Parties" refers to and includes the Company and the Town, either singly or collectively as the context requires. § 1.6 "Public Utilities Commission" or "PUC" refers to and is the Public Utilities Commission of the State of Colorado or other state agency succeeding to the regulatory powers of the Public Utilities Commission. §1.7 "Residents" refers to and includes all persons, businesses, industry, governmental agencies, and any other entity whatsoever, presently located or hereinafter to be located, in whole or in part, within the territorial boundaries of the Town. §1.8 "Revenues" refer to and are those amounts of money which the Company receives from its customers within the Town from the sale of gas under rates authorized by the Public Utilities Commission as well as from the transportation of gas to its customers within the Town and represents amounts billed under such rates as adjusted for refunds, net write- off. of uncollectible accounts, corrections or regulatory adjustments. Regulatory adjustments refer to, by way of explanation, but not limitation, credits, surcharges, refunds and pro-forma adjustments pursuant to federal or state regulation. §1.9 "Streets" refer to and are streets, alleys, viaducts, bridges, roads, lanes and other public rights-of-way in the Town. "Streets" shall also include public easements and other public places within the Town that are suitable locations for the placement of Facilities. §1.10 "Town" refers to and is the municipal corporation designated as the Town of Avon, Eagle County, Colorado. ARTICLE 2 GRANT OF FRANCHISE §2.1 Grant of Franchise. The Town hereby grants to the Company the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the Town. The Town also hereby grants to the Company the right to Ordinance No. 04-06 Page 2 of 13 a E acquire, construct, install, locate, maintain, operate and extend into, within and through the Town all Facilities reasonably necessary to furnish, sell, transport and distribute gas within and through the Town. These rights shall extend to all areas of the Town as it is now constituted and to additional areas as the Town may increase in size by annexation or otherwise. If the boundaries of the Town are expanded during the term of this franchise, the Company shall extend service to Residents in the expanded area at the earliest practicable time and in accordance with the Company's extension policy. Service to the expanded area shall be in accordance with requirements of the PUC and the terms of this franchise, including payment of franchise fees. The rights granted by this franchise are not, and shall not be deemed to be, granted exclusively to the Company, and the Town reserves the right to make or grant a similar franchise to any other person, firm, or corporation. Except as otherwise specifically provided herein, the Town retains the right through the exercise of its police power to use, control, and regulate the use of the Streets, and the space above and beneath said Streets. The Town retains the right to impose such other regulations as may be determined by the Town to be necessary in the reasonable exercise of its police power to protect the health, safety, and welfare of the public. §2.2 Term of Franchise. This franchise shall take effect upon its adoption and shall supersede any prior franchise grants to the Company by the Town. The term of this franchise shall be twenty (20) years. ARTICLE 3 FRANCHISE FEE §3.1 Franchise Fee. As consideration for the franchise rights granted herein, and in recognition of the fact that the grant to the Company of the right to use Town Streets is a valuable right, the Company shall pay the Town a sum equal to three percent (3%) of all Ordinance No. 04-06 Page 3 of 13 Revenues received from the sale and transportation of gas.within the Town, excluding §3.2 §3.3 §3.4 §3.5 revenues received from the Town for the sale of gas to the Town. Surcharge of Franchise Fees. The Company shall charge a franchise fee to all Town residents that use facilities of the Company in Town Streets to obtain gas. No franchise fee shall be charged to the Town for gas service provided to the Town for its own consumption. Remittance Schedule. Franchise fees that are collected from Residents shall be remitted by the Company to the Town in monthly installments not more than thirty (30) days following the close of each month. All payments shall be made to the Finance Director. In the event that either the Town or the Company discovers that there has been an error in the calculation of the franchise fee payment to the Town, the error shall be corrected in the next monthly payment, subject to the following provisions: In the event an error by the Company results in an overpayment of the franchise fee to the Town in excess of $5,000, credit for the overpayment shall be spread over the same period the error was undiscovered; if the overpayment is $5,000 or less, credit shall be taken against the next payment. In no event shall either Party be required to refund any over- or underpayment more than 3 years from the date of the over- or underpayment. Audit R i ¢hts• Protection of Confidential Information. The Finance Director, or his or her agent, shall have access to the metering records of the Company during normal business hours upon reasonable notice for the purpose of auditing to ascertain that the franchise fee has been correctly computed and paid. Except as provided in Section 3.6, all information obtained by the Finance Director during a franchise fee audit shall be kept confidential and shall be utilized for the sole purpose of verifying that the franchise fee has been correctly computed and paid. Enforcement of Town Sales and Use Tax Laws. The Town may use the metered information obtained from franchise fee audits for the purpose of enforcing its sales and use tax laws. Upon request by the Town, the Company shall supply the Town with a list Ordinance No. 04-06 Page 4 of 13 of all suppliers of gas that utilize Company Facilities within the Town Streets to sell gas to Town Residents. §3.6 Franchise Fee Payment in Lieu of Certain Taxes and Other Fees. The Town accepts payment of the franchise fee by the Company in lieu of any occupation tax, occupancy tax, license tax, or similar tax or fee the Town might charge the Company or its subcontractors for the privilege of doing business in the Town, for the use or occupation of Town Streets, or for the installation, operation and maintenance of Company Facilities. Payment of the franchise fee does not exempt the Company from any lawful taxation upon its property or from any other tax not related to the franchise or the occupation or use of Town Streets, including the payment of head taxes, sales taxes or other fees or taxes assessed generally upon businesses. A W1PYPT F A SUPPLY, CONSTRUCTION AND DESIGN §4.1 Obligations Regarding Company Facilities. The Company shall install, maintain, repair, renovate and replace its Facilities with due diligence in a good and workerlike manner. Company Facilities shall not interfere with the Town's water mains, sever mains or other municipal uses of the Streets. The Company shall construct and maintain its Facilities in such a way as to minimize interference with trees and other natural features. The Company shall install underground all gas pipelines serving new residential subdivisions. §4.2 Excavation and Construction. All excavation and construction work performed by the Company shall be done in a manner that minimizes inconvenience to the public. All property disturbed by Company excavation or construction activities shall be restored by the Company at its expense to substantially its former condition. §4.3 Relocation of Company Facilities. The Company shall relocate, at its expense, Facilities in the Streets that interfere with a public project undertaken and paid for by the Town with public funds. The Town-shall provide at its expense sufficient right-of-way for the Company to relocate its Facilities. The Company shall relocate its Facilities at the Ordinance No. 04-06 Page 5 of 13 request of the Town or other person to avoid interference with other non-publicly- financed projects, but the expense of the relocation and the new right-of-way shall be paid in advance by the Town or by the person conducting the project and requesting the relocation. Relocation shall be completed within a reasonable time after a request and payment therefore is made (if applicable). In the event that the Town requests the Company to relocate the same Facilities within five (5) years of completion of a prior relocation, the subsequent relocation shall be at the Town's expense. Underground Facilities shall be relocated underground. Above ground Facilities shall be relocated above ground, unless the Town pays the additional cost of relocating above-ground Facilities underground . §4.4 Town Not Required to Advance Funds. Upon receipt of the Town's authorization for billing and construction, the Company shall extend its. Facilities to provide gas to the Town for municipal uses within the Company's certificated service area, without requiring the Town to advance funds prior to construction. Nothing in this section shall release the Town from the obligation to pay for the extension of Facilities once complete, in accord with the Company's gas tariffs on file with the Public Utilities Commission. ARTICLE 5 COMPLIANCE §5.1 Compliance with Applicable Laws. The Company and all of its contractors shall comply with all applicable Town laws, ordinances and regulations. The Company shall require its contractors working in the streets to hold the necessary licenses and permits required by the Town. §5.2 Compliance with Town Requirements. The Company will comply with all Town building and zoning codes and requirements regarding curb and pavement cuts, excavating, digging and related construction activities: Ordinance No. 04-06 Page 6 of 13 §5.3 Inspection. The Town shall have the right to inspect any portion of the Company's Facilities in the Town Streets. The Company agrees to cooperate with the Town in conducting the inspection. ARTICLE 6 PUBLIC UTILITIES COMMISSION REGULATION §6.1 Compliance with Orders by the Public Utilities Commission. The provision of gas service by the Company is regulated in whole or in part by regulatory agencies including the Public Utilities Commission. The Company is obligated by law to comply with all lawful PUC orders, rules, and regulations. The Town shall impose no obligation on the Company that interferes with the Company's ability to comply with lawful regulatory orders, rules, and regulations. §6.2 Certificates to Exercise Franchise Rights. The Town agrees to assist the Company, if necessary, in obtaining PUC approval of a certificate to exercise the franchise rights conferred under this Franchise, including negotiating a change to any provision of this franchise agreement which the PUC may require in order to obtain the certificate. ARTICLE 7 TOWN USE OF COMPANY FACILITIES §7.1 Trenches Available for Town Use. If the Company opens a trench to install its Facilities, the Company shall provide advance notice to the Town to permit the Town to install Town Facilities in the same trench at the Town's expense. The Town's installation of its Facilities shall not interfere with the Company's Facilities or delay the commencement or completion of the Company's construction project. ARTICLE 8 INDEMNIFICATION OF THE TOWN §8.1 Town Held Harmless and Indemnified. The Company shall indemnify, defend and hold the Town harmless from and against all liability or damage and all claims or demands Ordinance No. 04-06 Page 7 of 13 arising out of Company's operations within the Town pursuant to this franchise. 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 shall be permitted, at its own expense, to appear and defend or to assist in defense of such claim. The Company shall not be obligated to indemnify, defend, or hold the Town harmless to the extent any claim, demand or lien arises out of or in connection with any intentional or negligent act or failure to act of the Town or any of its officials, agents or employees, or to the extent that any claim, demand, or lien arises out of or in connection with the use of Town facilities. §8.2 Payment of Ordinance Expenses. The Company shall reimburse the Town for actual out- of-pocket expenses incurred in publishing notices and ordinances and conducting elections related to this franchise. ARTICLE 9 TRANSFER OF FRANCHISE §9.1 Consent of Town Required. The Company shall not transfer or assign any rights under this franchise to an unaffiliated third party, except by merger with such third party, or, except when the transfer is made in response to legislation or regulatory orders, unless the Town shall approve in writing such transfer or assignment. Approval of the transfer or assignment shall not be unreasonably withheld. §9.2 Transfer Fee. In order that the Town may share in the value this franchise adds to the Company's operations, any transfer or assignment of rights under this franchise requiring the approval of the Town under §9.1 shall be subject-to the condition that the transferee shall promptly pay to the Town a transfer fee, which shall be calculated by multiplying one million dollars by a fraction of which the numerator equals the then population of the Town of Avon which is served by the Company, and the denominator equals the then population of the City and County of Denver. Such transfer fee shall not be recovered from a surcharge placed only on the rates of Town Residents. Ordinance No. 04-06 Page 8 of 13 ARTICLE 10 MUNICIPALIZATION §10.1 Town's Right to Condemn. During the term of this franchise, the Town agrees not to condemn the Facilities of the Company or to otherwise restrict the Company's opportunity to conduct business in the Town, except as specifically provided in C.R.S. § 31-15-707. §10.2 Operation of a Municipal Utility or Competing Distributors. If, during; the term of this franchise, the Town operates a municipal gas- utility or issues to another entity a franchise to use the Streets for the placement of gas Facilities, the Company shall no longer be required to collect and pay franchise fees under Article 3 unless substantially the same . terms and conditions apply to the service provided by the Town or by the other entity. In addition, the following sections of this franchise shall no longer apply to the Company unless substantially the same provisions are applicable to all other gas distributors, including the Town: Articles 3.3, 3.4,.3.5, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 7.1, 9.1 and 9.2. ARTICLE 11 UNCONTROLLABLE FORCES §11.1 Uncontrollable Forces. Neither the Town nor the Company shall be in breach of this franchise ordinance if a failure to perform any of the duties under this franchise is due to uncontrollable forces, which shall include but not be limited to accidents, breakdown of equipment, shortage of materials, acts of God, floods, storms, fires, sabotage, terrorist attack, strikes, riots, war, labor disputes, forces of nature, the authority and orders of government and other causes or contingencies of whatever nature beyond the reasonable control of the party affected, which could not reasonably have been anticipated and avoided. Ordinance No. 04-06 Page 9 of 13 ARTICLE 12 BREACH § 12.1 Breach. If the Company fails to perform any of the terms and conditions of this franchise and such failure is within the Company's control, the Town may notify the Company of the specific failure and shall allow the Company a reasonable time within which to remedy the failure. If the Company does not remedy the failure and the failure is of a substantial nature, the Town Council may terminate this franchise after a full evidentiary hearing. Termination of the franchise shall be by no less than 75% vote of all members of the Town Council. §12.2 Judicial Review. Any such termination of the franchise shall be subject to judicial review as provided by law. ARTICLE 13 AMENDMENTS §13.1 Amendments to Franchise. This franchise may be amended only by a writing signed by both the Company and the Town, which is approved in the same manner as is required for the passage of this ordinance. ARTICLE 14 MISCELLANEOUS §14.1 Successors and Assigns. The rights, privileges, franchises and obligations, in whole or in part, granted and contained in this ordinance shall inure to the benefit of and be binding upon Public Service Company, its successors, assigns, affiliates and subsidiaries. §14.2 Third Parties. Nothing contained in this franchise shall be construed to provide rights to third parties. §14.3 Representatives. Both parties shall, from time to time, designate, in writing, represen- tatives for the Company and the Town to whom notices shall be sent regarding any action to be taken under this ordinance. Notice shall be delivered in person or by certified mail to -the persons and addresses hereinafter stated, unless the persons and addresses are Ordinance No. 04-06 Page 10 of 13 changed at the written request of either party. Until any such change shall be made, notices shall be sent as follows: To the Town: Town Clerk Town of Avon, Colorado P.O. Box 975 Avon, CO 81620 To the Company: Cynthia Evans Vice President Public Service Company of Colorado P. O. Box 840 Denver, CO 80201 § 14.4 Surcharge to Town Residents. The Company shall be permitted to surcharge to residents of the Town the franchise fee payments it makes to the Town. The Company shall"be permitted to surcharge to residents of the Town any other payments it makes to the Town only to the extent and in the manner permitted by law or as otherwise ordered by the PUC. §14.5 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 a substitute term that will achieve the original intent of the Parties hereunder. §14.6 Entire Agreement. This franchise constitutes the entire agreement of the Parties with respect to the matters contained herein and supersedes any and all prior written or oral agreements, negotiations, correspondence, understandings and communications with respect to this franchise. §14.7 Headings for Reference Only. The headings in this franchise are for reference only and convey no substantive rights or impose no substantive obligations on the Parties. Ordinance No. 04-06 Page 11 of 13 § 14.8 Responsibility for Language. The Town and the Company hereby acknowledge that each bears co-extensive and identical responsibility for the language in this franchise. In case of ambiguity, there shall be no presumptions based upon responsibility for drafting this franchise. § 14.9 No Waiver of Rights. Neither the Town nor the Company waives any rights under the statutes and constitution of the State of Colorado or of the United States except as otherwise specifically set forth herein. § 14.10 Prevailing Party. In any judicial or administrative action to enforce any of the terms or conditions of this franchise, the prevailing party shall be entitled to recover its costs and expenses incurred in such action, including reasonable attorney fees. §14.11 Approval of Franchise. The Company shall promptly file, in writing, its acceptance of this franchise and of any amendment of this franchise following the Town's final approval of the same. The failure to file such an acceptance within 45 days of said final adoption shall be deemed an acceptance of such franchise or amendment thereof. INTRODUCED, READ, PASSED ON FIRST READING AND ORDERED POSTED THIS L 200 CL(. A PUBLIC HEARING ON THIS DAY OF 0 -40' I ORDINANCE SHALL BE HELD AT THE REGULAR MEETING OF THE TOWN COUNCIL ON THE I ~1+ DAY OF -111 20 04.AT 5:30 PM IN THE COUNCIL CHAMBERS, AVON MUNICIPA BUILDING, 400 BENCHMARK ROAD, AVON, COLORADO L ? , y ,_'ua r'i:. a a Patty cK nny, To C1 rk C(S1 g~o'm ••~4 a ATTEST: MC Albert D. Reynolds, Mayor Ordinance No. 04'-06 Page 12 of 13 INTRODUCED, PASSED, ADOPTED AND APPROVED ON SECOND READING AND ORDERED POSTED THIS DAY OF '2004. ATTEST: ~J Patty Mcrenny, Town er ~J, Town Attorney Publication Dates: ACCEPTED: PUBLIC SERVICE COMPANY OF COLORADO Rv- Print Name & Title: Ordinance No. 04-06 Page 13 of 13 APPROVED AS TO FORM: 61 STATE OF COLORADO ) COUNTY OF EAGLE ) SS TOWN OF AVON NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE I IT" DAY OF MAY 2004, AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF THE FOLLOWING ORDINANCE: Ordinance No. 04-06, Series of 2004, An Ordinance of the Town of Avon, Eagle County, Colorado, Granting by Franchise to Public Service Company of Colorado, its affiliates, successors and assigns, the right to use the Streets within the Town to furnish, sell, transport and distribute gas to the Town and to all Residents of the town, granting the right to acquire, construct, install, located, maintain, operate and extend into, within and through the Town all facilities reasonably necessary to furnish, sell, transport, and distribute gas within and through the Town; and fixing the Terms and conditions thereof. A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and may be inspected during regular business hours, Monday through Friday, 8 AM - 5 PM. . Following this hearing, the Council may consider final passage of this Ordinance. This notice is given and posted by order of the Town Council of the Town of Avon, Colorado . TOWN OF AVON, COLORADO BY: Patty McKenny Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON APRIL 30, 2004. ✓ AVON MUNICIPAL BUILDING, MAIN LOBBY' ✓ ALPINE BANK, MAIN LOBBY ✓ AVON RECREATION CENTER, MAIN LOBBY ✓ CITY MARKET, MAIN LOBBY Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager From. Scott Wright, Finance Director Date: May 6, 2004 Re: Public Hearing - Gas Franchise Ordinance No. 04-06 Summary: The Town's current twenty-year gas franchise agreement with Public Service Company of Colorado ("PSCo expires May 31, 2004. Staff has been working with Wade Haerle from Xcel Energy (the DBA name for PSCo) in drafting a new franchise agreement. Council, at it s last meeting, adopted on 1St reading this new franchise agreement. In summary, the franchise agreement conveys the right to PSCo to provide public utility service (in this case natural gas) within Town of Avon boundaries and allow the use of Town rights-of-way for the location of utility facilities and equipment, in exchange for the payment of a franchise fee. These rights are non-exclusive and the Town reserves the right to make or grant a similar franchise to any other company. The Town reserves the right to control and regulate the use of its streets and to impose other regulations to protect the health, safety and welfare of the public. PSCo shall not interfere with municipal uses of the streets and must comply with all Town building and zoning codes and requirements. The franchise agreement is for a term of twenty years. A CML survey indicated that most gas franchises are for twenty or twenty-five year terms. The franchise fee is equal to three percent (3%) of revenues. This is the typical approach and percentage found in most existing franchises. Xcel Energy paid $47,404 and $38,322 in franchise fees for 2003 and 2002, respectively. Z Town Manager Comments: , ('_i Page 1