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ST9302-CS 980804 (3) CoppelI. Texas 75019 COPPELL. TEXAS 75019 August 4, 1998 David L. Cromer Right-of-Way Agent TU Services P.O. Box 139083 Dallas, TX 75313-9083 RE: Sandy Lake Ro~d ST93 Dear Mr. Cromer: This letter is written as a follow up to our phone conversation on July 31, 1998 in which I discussed your July 2 letter concerning the relocation of the 16" gas transmission line that crosses Sandy Lake Road near Moore Road. During our conversation, I stated that it is my opinion that the franchise agreement does not exempt this line from being relocated at the sole cost of Lone Star Gas. Specifically, Section lA of the franchise agreement states that it covers the gas utilities system including, but not limited to, gas transmission and distribution and any associated equipment. Also, Section 4, entitled Relocation, states that the Grantee is responsible to remove/relocate its mains, laterals, and other facilities to accommodate construction of streets, etc. when required by the City. The same paragraph goes on to state that if the relocation is for any reason other than the construction of City facilities, then at that time the Grantee shall be entitled to reimbursement from the City or others for the cost of removal and relocation. With this letter, I am providing a copy of the most recent franchise agreement between the City of Coppell and Lone Star Gas dated February 13, 1996. The City of Coppell is in the process of opening bids for the construction of Sandy Lake Road with an anticipated start of construction date of October, 1998. If you should have any questions or need additional clarification, please contact me at your earliest convenience. Sincerely, Director of Engineering and Public Works ~ O~~~ OF ~ C~ OF COPPEL~ ~, G~G ~ ~ ST~ G~ CO~~, A D~SION OF ~SER~ CO~O~ON, k ~ CO~O~ON, A ~~SE FOR ~ P~OSE OF CON~U~G, ~~G, ~ US~G A G~ ~~ ~M ~ ~ ~ OF COPPEL~ ~~ PRO~DING CO~I~ONS GOriNG ~N~U~ON, ~~SION, US~ ~~ON, ~ OPtiON OF ~ G~ ~~ ~~; PRO~D~G FOR ~~~ON; PRO~D~G FOR CO~~ON; PRO~D~G FOR Acing ~ ~R ~POR~; PRO~D~G FOR ~ commons OF ~IG~ PRO~D~G FOR ~~ON; PRO~D~G FOR AC~~ OF ~ ~~E; PROLOG A ~L~G ~USE; PROLOG k S~~IL~ C~USE; ~ PRO~D~G ~ E~ DA~ ~, ~ne S~ G~ ~mp~y, a ~on of ~r~ ~~fio~ ~ a ~c~ ~ ~e ~W of ~p~ T~ w~ au~o~ ~d m~ to ~tome~ ~ ~e ~W of ~H ~ ~ ~; ~d ~, ~e ~ent F~~ ~ment ~ ~ne S~ ~ ~m~ ~ on ~ptem~r 10, 1~5; ~d ~~, ~e ~ne S~ G~ ~mp~ ~d ~e ~ of ~p~ T~ ~e~ to ~end ~e F~chi~ ~ment ~ndlnE nego~fion of a n~ ~eement; ~d T~ have ~n ~mplet~ ~d ~e p~ d~e ~at a new F~~ ~ment m ~ eff~ve u~n ~e ~on of ~e ~em NOW, ~~O~ BE ~ O~~D BY ~ C~ CO~L OF ~ ~ OF COPPE~ ~: SE~ON 1. P~OSE. (a) ~at ~ere ~ hereby ~ted to ~ne S~ ~ ~mp~, a ~on of E~rch ~rafion (here~er ~ 'Gr~tee'), for a te~ of ~enW (~) ye~ ~mmen~g on ~ptem~r 11, 1~5, ~e non~xcl~ive pfi~eg~ to have, acquire, construct, reconstruct, extend, maintain, use, and operate in, along, across, on, over, through, above, and under public streets, alleys, highways, public places, public thoroughfares, and rights-of-way (hereinafter called'City property') in the City of Coppeil, Texas (hereinafter called 'City'), a gas utility system, including, but not limited to a gas trnn.~mi~ion and dism'bution system and any associated equipment or other facilities necessary to dism'bute, transport, or deliver gas in, out of, and through the City. Grantee shall not provide cable television services or operate .a .cable television system as defined in the Cable Communications Policy Act of 1984 (47 U.S.C.A. t 521 et seq., as amended) as recogilized by the Federal Comm,,,,ications Co,,,,~i-,.~ion (the FCC) without first obtaining a separate franchise from the City. This franchise is granted solely to the Gnmtee. Grantee is not authorized to license or lease to any person or entity the right to occupy and use any of City property for any private business or other purpose. Transportation service provided by Grantee to or for others shall not be considered a licensing or leasing of any right to occupy and use any City property. SECTION 2. CONSTRUCTION AND MAiNTENANCF.. Work done in connection with the construction, rnalnte,~nce, expansion, r~:ov~iruction, operation and use of the gas utility system and fac/lity shall be subject to the following conditions: 2 ~.ao~ nerai All construction, reconstruction, exp~nqion, repairs, excavation, or other work performed by Grantee, and all facilities of the Grantee, which are installed within City property, shall be in accordance with all generally applicable City Codes and Orrlin:~nces, includi~ City standard construction det_~il~ applicable to the construction of public improvements, the subdivision regulations and tree preservation ordinances and the Com?rehen~'ve Zonin~ Orrlln:~nce, as may be hereafter adopted or amended. Grantee ~h~l! be responsibl, e got all repairs and ~n~int. e~nce resulting from any defects, im?airments, or other subs~_ nd_~rd conditions of City property, including any disturbed, ~nm.ged or destroyed landscaping material, caused by the construction, Iv-inteEAllce, expansion, reconstruction, operation or use of City property by Grantee. Permit and Approval In accordance with generally applicable permitting City ordinances, ~ shall submit to an official of thc City, as designated from time to time proposed construction plans of all facilities, including sketches of piping layouts, to be installed, reconstructed, repaired, or expanded in, on, above, across, or under City property and any related street closure pln~* prior to the issuance of any applicable permit and the commencement of such construction or other work. City may require the submittal of a tr~_ ~c control plan and may also require all lanes to be open and available to the trat~c during peak hours. The City's designated representative shall review said plans and may require reasonable modifications in order to protect existing or anticipated public improvements or other existing utilities. Grantee shall not be required to obtain a permit prior to responding to emergency situations, but shall noti~ the City within forty-eight (48) hours following the initiation of work on City property in response to any emergency situation. Grantee and Grantee's contractors shall not be required to pay any permit fees or provide any performance bonds in connection with Grantee's work on City property. Tr*mc ~ontrol The Grantee shall conduct all traffic control in accordance with the latest version of the Texas M~m~l on Uniform Traffic Control Devices, as amended. The City and Caantee shall use all reasonable caution to avoid disturbing the facilities of the other party. The surface of any City property dism.rbed by the Grantee in the construction, relocation, or maintenance of any of its facilities shall be restored to as good a condition as before commencement of the work Go the reasonable satisfaction of the City withfn a reasonable t/me after completion of the work. If there is an unreasonable delay by Grantee in restoring or main~ City property after excavation, construction or repai~ have been made, thc City shall have the right, after five (5) days' written notice to Grantee, to restore or repair the ~me and to require the Grantee ~o pay the reasonable costs of such work. 4 A6607~66 (e} Compliance with Safety Laws Upon request of the City, Grantee shall remove and abate any portion of the utility system or any of its facilities that is dangerous to life or property in accordance with any applicable law. Grantee shall operate and maintain its utility system and its related facilities in material compliance with applicable federal, state and local laws governing natural gas facilities. (f) Maintenance of Piping Grantee shall own, operate, and maintain all senrice lines, which are. defined as the supply lines ex~ndi~ from the Grantee's main to the customer's meter where gas is measured by Grantee. The customer shall own, operate, and maintain all yard lines and house piping. Yard lines are defined as the underground supply lines extending from the point of connection with Grantee's customer meter to the point of connection with the a~sto~s house piping. If any one residential customer of gas, at a minimum, uses for lmgupplcmented space heating and water heating, Grantee ._zhall bo required at its own expense to extend mains on any street up to one hundred feet (100'). Grantee ~hall not bo required to extend tran~rnizdon mains on any City property or to make a tap on any tr~n~mizdon main within City ~nless Grantee agrees to such extension by a written agreement between Grantee and a customer. S~ON ;]. OCCUPANCY CONDITIONS. All facilities constructed, relocated, or maintained by Grantee within the City property shall be located so as to not ,nreasonably intedere with the use of such property by thc City or other utilities; and shall not ,nreasonably interfere with the rights of the owners or occupiers of any adjoining property. Grantee shall not place any of its facilities where the ~rne will unreasonably interfere with any existing sas, electric, or telephone fixture, water hydrant, or rosin; drainage facility, or sanitary sewer, or ~mreasonably intedere with travel on or public use of the streets, alleys, or other City property. SF, CflON 4. RELOCATION. When the Grantee is required by City to remove or relocate its mains, laterals, and other facilities to accommodate construction of streets, alleys, drninn~e improvements, water line and/or sewer lines by City, and Grantee is eligible under federal, state, county programs for reimbursement of costs and ext~nses inaured by Grantee as a result of such removal or relocation, and such reimbursement is required to be handled through City, Grantee and expenses sh~l! be included in any application by City for reimbursemen~ if Crrant~ mbmits its cost and expense doo~mentafion to City prior to the filing of the application. City shall provide reasonable notice to Grantee of the deoallne for Grantee to submit doc~mentation of the costs and expenses of such relocation to City. If the Grantee is required by City to remove or relocate its mains, laterals, or other facilities for any reason other than construction of City facilities, Grantee shall be entitled to reimbursement from City or others of the cost and expense of such removal or relocation. If City abandons any City property in which Grantee has fac/i/ties, such abandonment shall be conditioned on Grantee's right to maintain its use of the former City property. If the party to whom the City property is abandoned requests the Grantee to remove or relocate its facilities and Grantee agrees to such removal or relocation, such removal or relocation shall be done wi~_hin a reasonable _time at the expense of the party requeslln~ the removal or relocation. If relocation ~nnot practically be made to another City property, the expense of any fight-of-way acquisition shall be considered a relocation expense to be reimbursed by the party requesting the relocation. SECTION 5. WORK BY OTItF, RS. (a) The City reserves the right to lay and permit to be laid sewer, ~ water, and other pipelines or cables and conduits and to do and permit to be done any underground or overhead work that may be necessary or proper in, ~ along, over, or under a City property occupied by Grantee. City also reserves the right to change in any manner any curb, sidewalk, highway, alley, public way or street, or the grade thereof. When City damages ~'s fsa'lities while doin~ work on City fac/lities, Grantee shall repair any such damage ~t City's expense. Likewise, when Grantee damages City's facilities while doh~ work on Grantee's facilities, City shall repair any such damage at Grantee's (b} In the event the City authorizes someone other than the Grantee to occupy any City property, such grant shsl! be mbject to the rights herein ~anted to Grantee. SF, crION& REPORTS AND RECORDS. , (a) Grantee shall keep complete and accurate books of accounts and records of its business and operations from which its gross receipts may be determined. Copies of relevant portions of such books of accounts and records shall be available at the Grantee's office located in Dallas County, Texas. The City shall have access to all books of accounts and records of Grantee relating to th~.~ f~ran~ as reasonably needed to dctermlnc the accuracy of any and all reports rclatcd to thc gross receipts. The City agrees to the extent allowed by law that any confidential or proprietary matter shall not be disclosed by the City, except as needed to cnforcc thc City's fights under ~ ordinance. Upon request, Grantee sh:~il furni.~h the City with copies of Enserch Corporation's grtmt:~l audit reports of its ~ngnei~t! statements by an independent certified public accountant and 10K and 10Q Reports to the Seau'ities & Ezch*nge Commission and shall make available for ~on by the City all reports filed with the Railro~ Colvmi.~ion of Texas or its successor. Upon request, Grantee shall make such other special studies and furnish such other reports as the City may reasonably require for the administration of this ordinanc~ The City sh:~ll have the right, at reasonable times, to inspect the plant, equipment and other property of the Grantee and its affiliates to examine, audit, and obtain copies of the papers, books, accounts, doctunents, and other business records of the Grantee consistent with state law. SECHON 7. QUALITY OF SERVICE. Grantee shall at all times furn~ service in a manner consistent with its Quality of S~.~c~ Rules~ as :~r~ended from time to _time, and as on file with the City. 8 A~07T6~ SECTION 8. FRANCHISE ADMINISTRATION. (a) The City Manager, or his designee, is the principal City officer respons~le for the ~dmini.~tration of thi.~ ~anchise and shall oversee and review the operations of Grantee under thi.~ franchise. (b) The City may delegate to the City Manager, or his designee, the exercise of any powers confcrrcd upon thc City by its Charter or by law relating to the regulation of Grantee and exercise of the rights and privileges conferred, by this franchisc, but thc City Council reservcs unto itself the exclusive power to fix and regulate the general charges and rates of Grantee, to the full extent that this authority is provided in the.Charter, ,hi.~ frallch~ and state law. It shall be the right and duty of the C/ty Manager, or his designee, to keep. fully informed as to ali matters in connection with or affecting the construction, reconstruction, maintenance, operation, and repair of the Grantee's Iras utility system, its accounting methods and prooedure~, the conduct of Grantee's business in the City, and of se~wice being rendered by the Grantee. SEC~ON 9. SERVICE (a) C/ty Council hereby expr~ reserves the rl!ht, power, and authority to fully regulate and fix thc ram and charges for the services of the Grantee to its customers as provided by state law and City Charter. Grantee may from time to time propose changes in its general ram by filing an application with the City Secretary for consideration of the City Council Within a reasonable time coilsistent with law, the City Council shall afford Grantee a fair hearing with reference to the application and shall either approve or disapprove the proposed changes or make such order as may be reasonable. (c~ In order to asce~:~in any and all facts, the City Council s~all have the fill[ power and authority to inspect or cause to be inspected, the books of Grantee, and to inventory and appraise, or cause to be inventoried and appraised, the property of Grantee, and to eom?el the attendance of v~iinesses and production of books and records. Grantee shall have the right, subject to City niles and regulations and consistent with the applicable state and federal law, to require a reasonable seo. uity deposit for the payment of services. SECTION 10. COMPENSATION. For the reason that the City property to be used by Grantee in the operation of its utility system and facilities within the City are valuable public properties, acquired and maintained by the City at great expense ~o the taxpayers; and thai Grantee's use of said property is a valuable property right which Grantee would be required to invest substantial capital in right-of-way cos~ and acquisition, Grantee agrees to pay and City agrees ~o accept, on or before March 1, 1996, a snm of money which shall bc equivalent to two percent of the gro.s~ receipts received by Company from the sale of gas to its residential and commercial customers with|n the City (expressly excluding, however, receipts derived from sales to industrial and governmental customers in the City) for the preceding calendar quarter. Thereafter, Grantee agrees to pay and City agrees to accept a s~m of money which shall be equivalent to four percent (4%) of the s~_~m of (a) gross receipts received by Grantee from the sale of gas through the pipeline system of Grantee within City to residential, commercial and industrial customers within City (expre~ excluding governmental users), (b) gross receipts received by Grantee from the traxtsportation of gas through the pipeline system of Grantee within the City to commercial and industrial customers within tho City (expre~ excluding governmental users), and (0 the total cost of gns trnmpo~ by Grantee for commercial and industrial customers within City for traxtsported throtlgh the pipelin~ b'y~m of Gran~ within City excluding governmental users) during the preceding calendltr quarter, which quarterly payments shah be for the rights nad privileges herein granted to Grantee, including expre.~ly, without limitation, the right to use the City property. Franchise fee payments shall be paid quarterly on or before March 1, 1996, June 1, 1996, September 1, 1996, andDecember 1, 1996 for the most recently ended calendar quarter, and on or before the same days of each succeeding year during the life of thi.~ franchise. Grantee shall make such payments by wire trnr~fer, if requested by the City. Should any payment due date required by thi.~ Ordlnnnce fall on a weekend or declared bnnlr holiday, payment shall be made to the City no later than the working day prior to any specifically required due date contained within this Ordinance. The initial payment for the rights and privileges herein provided shall be for the period/Ianuary 1, 1996, through March 31, 1996, and each succeeding payment shall be for the calendar quarter in which the payment is made. (cl~ The compensation provided herein shall be in lieu of any and all other and additional occupation taxes, easement, franehi~ taxes or charges (whether levied as a spedal, or other character of tax or charge), munidpal, lieense., permit, and inspection fees, bonds, street taxes, and street or alley reu~__*l, or charges, and all other and additional mnrddpal taxes, charges, levies, fees, and rentals of whatsoever kind and character which City may now i .ml,O~ or hereafter levy and collect from Grantee or Grantee's agents, ~eepting only the usual general or spedal ad valorem taxes which City is authorized to lev/ and impose upon real and personal property. Should City not have the power to agree that the payment of the foregoln~ 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 Grant~'s obligations, if any, to pay any such taxes, licenses, charges, fees,rentals, easement or franchise taxes or charges aforesaid. (d) Grantee agrees that on the same date that payments are rn~de, as provided in thi.~ Section 10, it will file with the City Secretary a sworn report show~n~ the gross receipts received by Grantee from the sale of gas to its residential, commercial, and industrial customers and from the trart~ortation of gas within City during the calendar quarter preceding the date of payment. Such report shall also include the total cost of gas tramported by Grantee for customers based on the information as discloze.,d by such customers to Grantee during the calendar quarter preceding the date of payment or on the index price, if applicable. City may, if it sees fit, have the books and records of Grantee examined by a representative of City to ascertain the correctness of the sworn reports agreed to be filed herein. Each customer of Grantee tr~rt~porting gas within the City thrtglgh tho pip~lin¢ system of Gralltec within thc City shall disclose to ~ w[t_hin forty-five (45) days following the end of each calena*r month the total cost of gas ~rtcd by Grantee for such customer during such preceding calendar month. City and Grantee acknowledge that normal billing practices in the gas industry may cause delays in the disclosure of total cost of gas information by customers. To thc extent that such delays prevent the timely disdosure of total cost of gas information to Grantee from custOmm~ tram~rt~ ~ Grantee shall be permitted to delay payment to the City related to such total cost of gas information until the next regularly scheduled payment. If a customer refuses to disclose to Grantee the total cost of ~ transported by Grantee for such customer so that the fees provided for herein cannot be accurately calculated and collected from such customer, Grantee shall utilize a price equal to the index (hrge packages only) price per MMBtu published for each month in Inside FERC's Gas Market Report in the table tiffed, ~Delivered Spot-Gas Prices,' for gas delivered at Houston Ship Chnnnel/Bea~mont, Texas, or a mutually agreeable successor publication and index. Such index price for any given month shall be multiplied by the actual vob~me transported by Grantee during such month for a customer, and the product thereof shall then be multiplied by the applicable percentage to determine the amount due the City. Grantee shall use due diligence in collecting from customers the fees required by thi~ franchise. If a transportation customer refuses to pay the fee related to the total cost of gas transported and remains delinquent in payment of such fees for more than thirty (30) days, Grantee shall be respon.~'ble for the n .m~aid fee related to the total cost of gas uansported thereafter. SECTION 1L ASSIGNM~.NT. Thh franchise shall not be ass/gned without the express written consent of the City. The terms and conditions contained in th/s Ordlnnnce shall be bindln~ upon Grantee, its successo~ and asaigns. Nothing herein shall be deemed a waiver, release, or relinquhhment of the City's right to regulate the rates and services of Grantee or either party's fight to contest or appeal any act/on or dechion of the other party to the Texas ~ad Commi-~ion or succes.~r. , S~ON 12. GOVERNING LAW. This franchise is subject to all applicable state laws and the provisions of the City Charter. This franchise shall in no way affect or impair the present or future righ~ obligations or remedies of the City or Grantee under the Gas Utility Regulatory Act, as amended, or its successor. S~ON 13. INDICATION. Grantee shall defend, indemnify and save whole and harmless the City, its officers, agents, and employees agnlr~t any and all claims, lawsuits, jud~nents, costs, and expe~ for personal injury (indudln~ death), property an~nEe, or other harm for which recovery anmnEes are sought by any person or persons that may be occasioned by, or arise out of Grantee's breach of any of the terms or provisions of this Ordinance, or by any negligent or strictly liable act or omits'ion by Grantee, its officers, agents, employees, subcontractor~ affiliates and subsidiaries, in the construction, maintenance, operation, or repair of the gas utility system, or by the conduct of Grantee's business in the City pursuant to this Ordinance; except that the indemnity provided for in this section shall not apply to any liability resulting from the sole negligence or fault of the City, its officers, agen~ or employees or separate contractors, and in the event of joint and concurrent negligence or fault of both the Grantee and the City, respons~ility and indemnity, if any, shah be apportioned comparatively in accordntice with the laws of the State of Texas without, however, waiving any governmental immnnity available to the City under Texas law, and without waiving any of the defenses of the parties under Texas law. It is further understood that it is not the intention of the Grantee and thc City to create liability for the benefit of third parties, but that thi.~ section shall be solely for the benefit of the Grantee and City and shall not create or grant any fights, contractual or otherwise, to any other person or entity. 15 s.~n~ SECTION 14. ANNEXATION. This franchise shall extend to and include any and all territory that is within the City's corporate limits. The franchi.~e shall aiso extend to any territory which is annexed by the City during the term of thi.~ franchise. In the event of disannexation, this franchise shall be reduced to the territory that continues to be in the City. City shall promptly furnish the Grantee with maps or other doo~ments showlnE the affected area in the event of an annexation or disannexation. Wi~hln thirty (30) days of such maps or other documents are furnished, Grantee ahall identify all customers located within salc. h annexed or ~ territory and adjust its accounting system and records accordingly. ComI~mation under ~ franchise ~h,!! include annexed territory within thirty (30) days from the date the City furnlxhes the maps or other doo~ments to the Grantee. SEC~ON 15. ~2LMINATION In addition to all rights and powers of the City by virtue of thia ~ or othemise, the City may ter,-i,~.-~ this franchise if, after notice and heari~ Grantee is found to be in violation of any material, term, condition, or provision of thi.~ franchise luld fails or refuses to effect compliance within forty-five (45) days following written demand for compliaace from the City followin~ such hearing SEC'rlON 16. REPF~L~NG CIAUSE. Upon the effective date of this Ordinance, all other gas franchise ordlnAn~es Of the City of Coppell, Texas, applicable to Grantee ~h_all be and the same are hereby repealed and ali other ordinances not in conflict With the provisiom of thi.~ OrdinAnce shall retnAin ia full force and effect. SECTION 17. SEVERABILITY CLAUSE. That should any word, phrase, paragraph, section or portion of this ordinance be held to be void or unconstitutional, the same shall not affect the validity of the remaining portions of said ordinance, which shaH remain in full force and effect. S~ON 18. EFFECTIVE DATE. Subject to Grantee's acceptance, this Ordinance shall take effect thirty (30) days from and after its passage as the law and charter in such cases provide. SECTION 19. ACCEPTANCE. Grantee shall file its acceptance of this Ordinance within thirty (30) days of its passage by filing with the o~ce Of the City Secretary a written accep~ sisned mi acknowledged by a duly authorized officer substantially in the following form: To the Honorable Mayor and City Council of the C/ty of Coppell, Te.z~: Grantee, Lone Star Cras Corn?any, a division of ENSERCH Cotpomtio~ Ordinance No. granting a franchise to Lon~ Star Gas Corn?any, a division of ENSERCH Corporation. Vice Presidcn~ Lone Star Cras Co?any, a division of Ema~ ~~m EXECUTED this the day of ,19 ... Upon filin~ Of the acoeptance, thi.~ Agreement shnl! become effective. In the event that such acceptance is not filed within thirty (30) days after the passage-of this Ordinance, this Ordinance shaH terminate and become null and void. 17 ~arn~ DULY PASSED by the City Council of the City of Coppell, Texas, ehi.~ the /:~ ~ APPROVED: A~: AI~RO~ AS TO FORM: (POs/c 18 ~son~ To the Honorable Mayor and Cit~ Council of the City of CoppeH, Texas Grantee, Lone Star Gas Company, a division of ENSERCH Corporation, acting by and through the undersigned aulhorized ol]icer, hereby accepts Ordinance No. 96743 granting a fra~i~e to Lone Star Gas Company, a division of ENSERCH Corporation. Co~, a division of~ISERCH Corporation Recieved by t. he City of Coppell, Texas, this the ~ -- day of ~~/~ , 1996. / bt4~DA GRAU, CITY SECRETARY