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HomeMy WebLinkAboutOrdinance 15275i' * ,, ~, ~ rte, e ,~ w ORDINANCE NO. `~ ~ ~~ AN ORDINANCE AMENDING ORDINANCE NO. 1 a-692 (THE GRANT ` OF A FRANCHISE TO TXU GAS COMPANY) BY CLARIFYING THE METHOD IN WHICH FRANCHISE FEES WILL BE CALCULATED AND AUTHORIZING IN CERTAIN CIRCUMSTANCES THE LEASE OF FACILITIES OWNED BY TXU GAS COMPANY AND LOCATED WITHIN THE PUBLIC RIGHTS-OF-WAY IN THE, CITY OF FORT WORTH; AND FURTHER PROVIDING THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; FINDING AND DETERMINING THAT THE MEETING A.T WHICH THIS ORDINANCE IS ADOPTED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; PROVIDING FOR PUBLICATION; PROVIDING AN EFFECTIVE DATE; AND PROVIDING FOR ACCEPTANCE BY TXU GAS COMPANY. WHEREAS, on October 9, 1990 the City Council adopted Ordinance No 10692, an ordinance granting Lone Star Gas Company (now TXU Gas (:ompany) ("TXU Gas" or "Company") a franchise for a period of twenty-five (25) years to use the public rights-of--way within the City of Fort Worth (the "City") for the purpose of la}ring, maintaimng, using and operating a system of pipelines for the provision of natural gas to residential, commercial and industrial customers located m the City (the "Franchise"), and WHEREAS, pursuant to that certain Settlement Agreement entered into by and between TXU Gas and the City, as authorized by M&C G-13691 and approved by the City Council on August 8, 2002, TXU Gas and the City desire to amend the Franchise to amend the manner m which franchise fees paid pursuant to the Franchise will be calculated and to authorize m certain circumstances the lease of facilities owned by TXU Gas and located :m the public rights-of--way NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: that Section 1. Effective January 1, 2002, Section 13 of the Franchise; is deleted in its entirety and replaced with the following: SECTION 13 (a) Franchise Fee. In consideration for the rights and privileges herein granted, Company, its successors and assigns, shall pay to the City during the term of this franchise a franchise fee equal to four percent (4%) of the Gross Revenues, as defined m subsection (b) below, received by Company Page 1 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise 4 L?`a (b) Definition of Gross Revenues. "Gross Revenues" shall mean all revenue derived or received, directly or indirectly, by the Company from or In connection wi1:h the operation of the "System" (which shall mean the pipelines and appurtenant equipment referenced in Section 1 of this franchise) wrthm the c;orporate limits of the City and including, without hmrtation. (1) all revenues received by the Company from the sale of gas to all classes of customers within the City; and (2) all revenues received by the Company from the transportation of gas through the pipeline system of Company within. the Crty to customers located within the Crty; and (3) the value of gas transported by Company for "Transport Customers" (which shall mean all customers wrthm the corporate limits of the City that consume gas transported but not sold by Company) through the System of Company wrthm the City ("Third Party Sales"), with the value of such gas to be reported by each Transport Customer to the Company, provided, however, that should a Transport Customer refuse to furnish Company its gas purchase puce, Company shall estimate sa~ine by utilizing TXU Gas Distribution's monthly industrial Weighted Average Cost of Gas, as reasonably near the time that the transportation service is performed. (4) Gross Revenues shall specifically include the following: (A) Other revenues denved from the following "miscellaneous charges" (i) charges to connect, disconnect, or reconnect gas wrthm the City; and (ii) charges to handle returned checks from consumers within the City; and (iu) such other service charges and charges as may, .from time to time, be authori::ed in the rates and charges on file with the Crty; and (iv) contributions in aid of construction ("CIAC"), which shall be calculated and paid in accordance Page 2 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise . b~ with Section 13(c) of this Franchise; and (B) revenues billed but not ultimately collected or received by the Company; 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 the Company; and (B) sales taxes, and (C~ any interest income earned by the Company; 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 located within a public nght-of--way in the Crty (c) Calculation and Payment of Franchise Fees Based on CIAC. (1) The franchise fee amounts based on 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 basf;d on CIAC shall be paid at least once annually on or before Apn.l 30 each year based on the total CIAC recorded dunng the preceding calendar year (d) Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid b~Company (1) If Company should at any time after August 8, 2002 agree to a new municipal franchise ordinance, or renews ail existing municipal franchise ordinance, with another municipality, under which the franchise fee owed to that municipality for the use of its public nghts-of--way would, if applied to the Crty, result m a franchise fee greater than the amount otherwise due City under this franchise, then the franchise fee to be paid by Company to City pursuant to this franchise shall be increased so that the amount due and to be paid hereunder is equal to the amount that: would be due and Page 3 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise .~' payable to City were the franchise fee provisions of that other municipal franchise ordinance applied to City (2) The provisions of this Section 13(d) apply only to the amount of the franchise fee to be paid to the City and do not apply to other franchise fee payment provisions, including, without limitation, the timing of such payments. (e) Franchise Fee Recovery Tariff. (1) Company may file with the City a tariff ame,ndment(s) to provide l for the 100% recovery of franchise fees accruing under this franchise on and after January 1, 2002 as part of Company's rates. (2) City agrees that (i) m the event of such a filing with the Crty, the Crty will take an affirmative position supporting 100% recovery of such portion of the Franchise Fee by Company; (ii) if the Crty intervenes in any regulatory proceeding before a federal or state agency m which the recovery of Company's franchise fees is an issue, the City will take an affirmative position supporting 100% recovery of such franchise fees by Company; and (iii) in the event of an appeal of any such regulatory proceeding m which the Crty has intervened, the City will take an affirmative position m any such appeals in support of the 100% recovery of such franchise fees by Company (3) The 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 fees by Company (f) Lease of Facilities Within City's Public Rights-of-Way Company shall have the right to lease, license or otherwise grant to a party other than Company the use of facilities owned by Company and located within public rights-of--way in the Crty, provided that (i) Company first notifies the Crty 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) Company makes the franchise fee payment due on the revenues from such lease pursuant to Sections 13(a) and (b) of this franchise. This authority to lease facilities located within the City's public rights-of--way shall not affect any such lessee's„ licensee's or user's obligation, if any, to pay franchise fees to the Crty Page 4 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise n 3 r (g) Due Dates. The franchise fee shall be paid on or before the fi'~.fteenth (15th) day of February, May, August and November of each year for the preceding calendar quarter during the term of this franchise. Such payments shall be by Company and accepted by City as full payment for Company's privilege of using and occupying the streets, alleys and public thoroughfares within the City and of other fees connected with that use, such as rentals, supervision, inspection and occupation charges and m lieu of license and inspection fees, street and alley rentals (excepting only general or special ad valorem taxes which City is authorized to levy and impose upon real or personal property). (h) Filing of Sworn Reports. On the same date that Company submits a franchise fee payment to the City, Company will also file with the City Secretary a sworn report showing the Gross Revenues of Company from the transportation of gas within the Company's lines to the corporate limits of the City and the Gross Revemies of Company from the sale of gas to residential, commercial, industrial and governmental customers of Company within the corporate hmrts of the City, including the customer .purchase puce of all gas transported by Company into the corporate limits of the City for the calendar quarter preceding the date of payment. The Crty, m its sole discretion, may audit or cause to be audited the books and records of Company to ascertain the correctness of the sworn reports filed pursuant to this Section 13(h). (i) No Waiver of Future Rights. If the State Legislature permits a home rule mumc;ipalrty the right to increase the percentage it may charge as a franchise fee on the Gross Revenues of a gas utility or to charge a gas utility any new or additional tax or fee, then the Crty may exercise such right(s), and should the Crty expressly exercise such right(s), then City and Company agree that any such increase or new or additional tax or fee shall automatically be made part of Company's rate covered by the then-existing rate ordinance within thirty (30) days from the date that the Crty expressly exercises such right(s). Section 2. In all respects, except as specifically and expressly amended by this Ordinance, the Franchise shall remain m full force and effect according to its terms until the Franchise expires or otherwise terminates m accordance with the provisions of the Franchise: Section 3. The sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable. If any portion of this Ordinance is declared illegal or unconstitutional by the valid Page 5 Amendment No. 1 to Ordinance No. 10692 T'XU Gas Franchise final judgment or decree of any court of competent jurisdiction, such illegality or unconstitutionality shall not affect the legality and enforceability of any of the remaining portions of this Ordinance. Section 4. It is hereby officially found and determined that the meeting at which this Ordinance is passed is open to the public as required by law and that public notice of the time, place and purpose of said meeting was given as required. Section 5. In accordance with and as required by Section 2 of Chapter XXV of the City's Charter, the City Secretary is hereby directed to publish this Ordinance m rts entirety once each week for four (4) consecutive weeks within a period of thirty (30) days following adoption by the City Council in the official newspaper of the City Section 6. This Ordinance shall be m full force and effect following (i) its adoption, and (ii) its publication in accordance with Section 5, and (iii) the filing with the Crty Secretary's Office and the Crty Attorney's Office wrthm thirty (30) calendar days following adoption of this Ordinance of written acceptance of this Ordinance by TXU Gas irl substantially the following form. To the Honorable Mayor and City Council. TXU Gas Company, acting by and through the undersigned authorized officer, hereby accepts in all respects, on this the day of , 2002, Ordinance No 15 2'75 amending the current gas franchise between the City and TXU Gas Company, and the same shall constitute and be a binding contractual obligation of TXU Gas Company to the Crty TXU Gas Company By ame `~ , L.~AI~. Title '~(~~_ t~~1T~ ADOPTED 1 ~/ $ 62. ~ ~ ~ 3~~d Date M & C Number EFFECTIVE DATE. ~/-D/-OZ- Page 6 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise APPROVED AS TO FORM AND LEGALITY By. Peter Vaky Assistant City Attorney Page 7 Amendment No. 1 to Ordinance No. 10692 TXU Gas Franchise City of Fort Worth, 7"exa~s Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 10/8/02 **G-13758 12GAS 1 of 1 SUBJECT ORDINANCE AMENDING ORDINANCE NO 10E-92, FRANCHISE TO TXU GAS COMPANY BY CHANGING THE METHOD IN WHICH FRANCHISE FEES WILL BE CALCULATED AND. AUTHORIZING IN CERTAIN CIRCUMSTANCES THE LEASE OF FACILITIES LOCATED IN PUBLIC RIGHTS-OF-WAl( RECOMMENDATION It is recommended that the City Council adopt the attached ordinance amending Ordinance No 10692 (the Franchise), the grant of a franchise to Texas Utilities Gas Company (TXU Gas) for use of public rights-of-way in the City of Fort Worth by changing the method in which franchise fees will be calculated and authorizing in certain circumstances the lease of facilities located in public rights-of-way DISCUSSION The City's Franchise with TXU Gas allows TXU Gas to use public rights-of-way within the City for the provision, distribution and transportation of natural gas to customers located in the City of Fort Worth In return, the Franchise requires TXU Gas to pay the City a franchise fee of 4% of TXU Gas' resulting gross receipts In 2000, the City sued TXU Gas for underpayment of franchise fees under the Franchise On August 8, 2002 (M&C G-13691), the City Council authorized the City to settle the lawsuit. One of the conditions of the settlement is that the Franchise be amended to provide a more specific definition of gross receipts and to address the manner in which TXU Gas may lease its facilities in the public rights-of-way to third parties The attached ordinance accom~-lishes that condition and contains the Substantive ordinance provisions that the City Council previously approved through M&C G-13691 FISCAL INFORMATION/CERTIFICATION The Finance Director certifies that the Revenue Office of the Finance Department will be responsible for the collection of fees due under this agreement. CB n Submitted for City Manager's ~ FUND ACCOUNT CENTER 4MOUNT CITY SECRETARY Office by (tO) GG01 421322 0134010 Charles Boswell 6183 Originating Department Head: David Yett 7623 (from) APPROVED 10/08/02 ORD.# 15275 Additional Information Contact: Peter Vaky 7601 Gerald Pruitt 7616