Ord 014-2007 2/6/2007 ORDINANCE NO. � `� � � � �
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS,
TEXAS, GRANTING A FRANCHISE AGREEMENT TO ATMOS ENERGY
CORPORATION TO CONSTRUCT, MAINTAIN AND OPERATE PIPELINES
AND EQUIPMENT IN THE CITY OF WICHITA FALLS; FINDING AND
DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE WAS
PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS,
TEXAS, THAT:
SECTION 1 GRANT OF AUTHORITY The City of Wichita Falls, Texas, hereinafter
called "City," hereby grants to Atmos Energy Corporation, hereinafter called "Atmos
Energy," its successors and assigns, consent to use and occupy the present and future
streets, alleys, highways, public utility easements, public ways and other public places
(rights-of-way), for the purpose of laying, maintaining, constructing, protecting, operating,
and replacing therein and thereon pipelines and all other appurtenant equipment (the
"System") to deliver, transport, and distribute gas in, out of, and through the City for
persons, firms, and corporations, including all the general public, and to sell gas to
persons, firms, and corporations, including all the general public, within the City
corporate limits, as such limits may be amended from time to time during the term of this
franchise, said consent being granted for a term ending December 31, 2026.
SECTION 2. CONSTRUCTION, MAINTENANCE, OPERATION 8c RELOCATION OF ATMOS
ENERGY FACILITIES Atmos Energy shall lay, maintain, construct, operate, and replace its
pipes, mains, laterals, and other equipment to minimize interference with traffic, place or
cause to be placed appropriate barriers to mark excavations or obstructions, and restore
to approximate original condition all Public Rights-of-way that it may disturb. In
determining the location of the facilities of the City and other users of Public Right-of-
way within City, City shall minimize interFerence with then existing facilities of Atmos
Energy and shall require other users of Public Rights-of-way to minimize interference
with existing facilities of Atmos Energy. In the event of a conflict between the location of
the proposed facilities of Atmos Energy and the location of the existing facilities of City
or other users of Public Rights-of-way within Public Rights-of-way that cannot otherwise
be resolved, City or an authorized agent of City shall resolve the conflict and determine
the location of the respective facilities within the Public Rights-of-way. Atmos Energy
shall not be required to obtain street cutting, street excavation or other special permits
related to excavations in Public Rights-of-way in connection with Atmos Energy's
operations in Public Rights-of-way. When Atmos Energy is required by City to remove or
relocate its mains, laterals, and other facilities to accommodate construction of streets
and alleys by City, and Atmos Energy is eligible under federal, state, county, local or
other programs for reimbursement of costs and expenses incurred by Atmos Energy as
a result of such removal or relocation, and such reimbursement is required to be
handled through City, Atmos Energy costs and expenses shall be included in any
application by City for reimbursement, if Atmos Energy submits its cost and expense
documentation to City prior to the filing of the application. City shall provide reasonable
notice to Atmos Energy of the deadline for Atmos Energy to submit documentation of the
costs and expenses of such relocation to City. If Atmos Energy is required by City to
remove or relocate its mains, laterals, or other facilities for any reason other than the
construction of streets and alleys by City, Atmos Energy shall be entitled to
reimbursement from City or others of the cost and expense of such removal or
relocation. When Atmos Energy is required to remove or relocate its mains, laterals or
other facilities to accommodate construction by City without reimbursement from City,
Atmos Energy shall have the right to seek recovery of relocation costs as provided for in
applicable state and/or federal law. If City abandons any Public Right-of-Way in which
Atmos Energy has facilities, such abandonment shall be conditioned on Atmos Energy's
right to maintain its use of the former Public Right-of-Way and on the obligation of the
party to whom the Public Right-of-Way is abandoned to reimburse Atmos Energy for all
removal or relocation expenses if Atmos Energy agrees to the removal or relocation of
its facilities following abandonment of the Public Right-of-Way. If the party to whom the
Public Right-of-Way is abandoned requests Atmos Energy to remove or relocate its
facilities and Atmos Energy agrees to such removal or relocation, such removal or
relocation shall be done within a reasonable time at the expense of the party requesting
the removal or relocation. If relocation cannot practically be made to another Public
Right-of-Way, the expense of any right-of-way acquisition shall be considered are
location expense to be reimbursed by the party requesting the relocation.
SECTION 3 INDEMNITY & INSURANCE. In the event of injury to any person or
damage to any property by reason of Atmos Energy's construction, operation,
maintenance, or replacement of Atmos Energy's pipeline system within Public Rights-of-
way, Atmos Energy shall indemnify and keep harmless City from any and all liability in
connection therewith, except to the extent such injury or damage is attributable to the
fault of the City, including, without limitation, the City's negligent or intentional acts or
omissions. Atmos Energy's insurance of its obligations and risks undertaken pursuant to
this franchise may be in the form of self-insurance to the extent permitted by applicable
law, under an Atmos Energy plan of self-insurance maintained in accordance with sound
accounting and risk-management practices.
SECTION 4. NoN-Exc�us�vE FRaNCHise. The rights, privileges, and franchises
granted by this ordinance are not to be considered exclusive, and City hereby expressly
reserves the right to grant, at any time, like privileges, rights, and franchises as it may
see fit to any other person or corporation for the purpose of transporting, delivering,
distributing, or selling gas to and for City and the inhabitants thereof.
SECTION 5 . PAYMENTS TO CITY.
A. Atmos Energy, its successors and assigns, agrees to pay and City agrees
to accept, on or before the 30th day of April, 2007, and on or before the last day of each
January, April, July, and October during the life of this franchise, the last payment being
made on the 31st day of October, 2026, except as stated in S.C.(2) below, a sum of
money which shall be equivalent to four percent (4%) of the Gross Revenues, as defined
in 5.B below, received by Atmos Energy during the preceding calendar quarter.
B. Except as stated in Section S.B.(5) below, "Gross Revenues" shall mean
all revenue derived or received, directly or indirectly, by Atmos Energy from or in
connection with the operation of the System within the corporate limits of the City and
including:
(1) all revenues received by Atmos Energy from the sale of gas to all
classes of customers (excluding gas sold to another gas utility in the
City for resale to its customers within City) within the City;
(2) all revenues received by Atmos Energy from the transportation of
gas through the System of Atmos Energy within the City to
customers located within the City (excluding any gas transported to
another gas utility in City for resale to its customers within City);
(3) the value of gas transported by Atmos Energy for Transport
Customers through the System of Atmos Energy within the City
("Third Party Sales") (excluding the value of any gas transported to
another gas utility in City for resale to its customers within City), with
the value of such gas to be established by utilizing Atmos Energy's
monthly Weighted Average Cost of Gas charged to industrial
customers in the Mid-Tex division, as reasonably near the time as
the transportation service is performed; and
(4) "Gross revenues" shall also include:
(a) other revenues derived from the following 'miscellaneous
charges':
i. charges to connect, disconnect, or reconnect gas
within the City;
ii. charges to handle returned checks from consumers
within the City;
iii. such other service charges and charges as may, from
time to time, be authorized in the rates and charges on
file with the City; and
iv. contributions in aid of construction ("CIAC");
(b) revenues billed but not ultimately collected or received by
Atmos Energy; and
(c) gross receipts fees.
(5) "Gross revenues" shall not include:
(a) the revenue of any Person including, without limitation, an
affiliate, to the extent that such revenue is also included in
Gross Revenues of Atmos Energy;
(b) sales taxes;
(c) any interest income earned by Atmos Energy; and
(d) all monies received from the lease or sale of real or personal
property, provided, however, that this exclusion does not
apply to the lease of facilities within the City's right of way;
(e) all revenues received from the sale or transportation of gas to
Sheppard Air Force Base in accordance with City Ordinance
No. 1906; and
(fl the value of gas transported for Sheppard Air Force Base
through the System of Atmos Energy in accordance with City
Ordinance No. 1906.
C. The initial payment for the rights and privileges herein provided shall be for
the period April 1through June 30, 2007, and each succeeding payment shall be for the
calendar quarter in which the payment is made.
(1) The franchise fee amounts based on "Contributions in aid of
Construction" ("CIAC") shall be calculated on an annual calendar
year basis, i.e. from January 1 through December 31 of each
calendar year.
(2) The franchise fee amounts that are due based on CIAC shall be
paid at least once annually on or before April 30 each year based on
the total CIAC recorded during the preceding calendar year. The
initial CIAC franchise fee amount will be paid on or before April 30,
2007 and will be based on the calendar year January 1 through
December 31, 2006. The final CIAC franchise fee amount will be
paid on or before April 30, 2027 and will be based on the calendar
year January 1 through December 31, 2026.
It is also expressly agreed that the aforesaid payments shall be in lieu of any and
all other and additional occupation taxes, easement, franchise taxes or charges
(whether levied as an ad valorem, special, or other character of tax or charge), municipal
license, permit, and inspection fees, bonds, street taxes, and street or alley rentals or
charges, and all other and additional municipal taxes, charges, levies, fees, and rentals
of whatsoever kind and character that City may now impose or hereafter levy and collect
from Atmos Energy or Atmos Energy's agents, excepting only the usual general or
special ad valorem taxes that City is authorized to levy and impose upon real and
personal property. If the City does not have the legal power to agree that the payment of
the foregoing sums of money shall be in lieu of taxes, licenses, fees, street or alley
rentals or charges, easement or franchise taxes or charges aforesaid, then City agrees
that it will apply so much of said sums of money paid as may be necessary to satisfy
Atmos Energy's obligations, if any, to pay any such taxes, licenses, charges, fees,
rentals, easement or franchise taxes or charges aforesaid.
D. Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid by
Atmos Energy
(1) If Atmos Energy should at any time after the effective date of this
Ordinance agree to anew municipal franchise ordinance, or renew
an existing municipal franchise ordinance, with another municipality
in Atmos Energy's Mid-Tex Division, which municipal franchise
ordinance determines the franchise fee owed to that municipality for
the use of its public rights-of-way in a manner that, if applied to the
City, would result in a franchise fee greater than the amount
otherwise due City under this Ordinance, then the franchise fee to
be paid by Atmos Energy to City pursuant to this Ordinance shall be
increased so that the amount due and to be paid is equal to the
amount that would be due and payable to City were the franchise
fee provisions of that other franchise ordinance applied to City.
(2) The provisions of this Subsection D apply only to the amount of the
franchise fee to be paid and do not apply to other franchise fee
payment provisions, including without limitation the timing of such
payments.
E. Atmos Energy Franchise Fee Recovery Tariff
(1) Atmos Energy may file with the City a tariff or tariff amendment(s) to
provide for the recovery of the franchise fees under this agreement.
(2) City agrees that (i) as regulatory authority, it will adopt and approve
the ordinance, rates or tariff which provide for 100% recovery of
such franchise fees as part of Atmos Energy's rates; (ii) if the City
intervenes in any regulatory proceeding before a federal or state
agency in which the recovery of Atmos Energy's franchise fees is an
issue, the City will take an affirmative position supporting 100%
recovery of such franchise fees by Atmos Energy and; (iii) in the
event of an appeal of any such regulatory proceeding in which the
City has intervened, the City will take an affirmative position in any
such appeals in support of the 100% recovery of such franchise
fees by Atmos Energy.
(3) City agrees that it will take no action, nor cause any other person or
entity to take any action, to prohibit the recovery of such franchise
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fees by Atmos Energy.
F. Lease of Facilities Within City's Rights-of-way. Atmos Energy shall have
the right to lease, license or otherwise grant to a party other than Atmos Energy the use
of its facilities within the City's public rights-of-way provided: (i) Atmos Energy first
notifies the City of the name of the lessee, licensee or user; the type of service(s)
intended to be provided through the facilities; and the name and telephone number of a
contact person associated with such lessee, licensee or user and (ii) Atmos Energy
makes the franchise fee payment due on the revenues from such lease pursuant to
Sections 5.A and 5.B of this Ordinance. This authority to Lease Facilities within City's
Rights-of-way shall not affect any such lessee, licensee or user's obligation, if any, to
pay franchise fees.
SECTION 6 . ACCEPTANCE OF FRANCHISE In order to accept this franchise, Atmos
Energy must file with the City Secretary its written acceptance of this franchise
ordinance within sixty (60) days after its final passage and approval by City. If such
written acceptance of this franchise ordinance is not filed by Atmos Energy, the
franchise ordinance shall be rendered null and void. When this franchise ordinance
becomes effective, all previous ordinances of City granting franchises for gas delivery
purposes that were held by Atmos Energy shall be automatically canceled and annulled,
and shall be of no further force and effect.
SECTION 7 . PARAGRAPH I CONSTRUCTION The paragraph headings
contained in this ordinance are for convenience only and shall in no way enlarge or limit
the scope or meaning of the various and several paragraphs hereof. Both parties have
participated in the preparation of this ordinance and this ordinance shall not be
construed either more or less strongly against or for either party.
SECTION 8 . EFFECTIVE DATE If Atmos Energy accepts this ordinance, it becomes
effective as of February 18, 2007.
SECTION 9. It is hereby officially found and determined that the meeting at
which this ordinance was passed was open to the public as required by law.
PASSED AND APPROVED this the 6th day of February, 2007.
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M A Y O R
ATTEST:
�ty Clerk