HomeMy WebLinkAbout09/15/2015 12 Franchise to Cascade Natural Gas Corporation for Natural Gas Transmission/Distribution System and Facilitiesnun 11,1:1141r10
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 12.
For Meeting of: September 15, 2015
ITEM TITLE: Ordinance granting a non-exclusive franchise to Cascade Natural Gas
Corporation ("CNG") to construct, operate and maintain a natural gas
transmission/distribution system and facilities within the City of
Yakima
SUBMITTED BY: Debbie Cook, Director of Utilities & Engineering
Randy Beehler, Communications & Public Affairs Director
Helen A. Harvey, Senior Assistant City Attorney
SUMMARY EXPLANATION:
Cascade Natural Gas Corporation has operated in the City of Yakima for many decades. The current
franchise Ordinance No. 2005-51 with Cascade Natural Gas Corporation is a ten year franchise and the term
ends during November 2015.
This ordinance is being presented to the City Council following negotiation with Cascade Natural Gas
Corporation ("CNG") regarding the franchise. The ordinance is the franchise itself. RCW 35.21.860 does
not allow a city to impose a franchise fee on a natural gas business. Pursuant to YMC 5.50.050, CNG pays a
utility tax to the City of six percent of gross revenue derived from its business in the City. The franchise is
for a period of ten years, with an option to extend the franchise for up to two additional five year periods if
the extensions are approved by the City Council at a business meeting and executed by CNG.
Resolution: Ordinance: X
Other (Specify): Franchise Ordinance
Contract: Contract Term: 10 years with option to extend
Start Date: 11/17/2015 End Date: 11/17/2025
Item Budgeted: NA Amount:
Funding Source/Fiscal Impact:
Strategic Priority: Public Trust and Accountability
Insurance Required? Yes
Mail to: Mike Clapp, Cascade Natural Gas Company, 200 N. Union Street, Kennewick,
WA 99336-2212
Phone: (509) 736-5543
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
City Manager
Staff recommends the City Council to pass ordinance
ATTACHMENTS:
Description
Ordinance Cascade Natural Gas Corporatlion
Franchise
Upload Date Type
9/8/2015
Ordinance
ORDINANCE NO. 2015 -
AN ORDINANCE granting a non-exclusive franchise to Cascade Natural Gas Corporation
("CNG") to construct, operate and maintain a natural gas
transmission/distribution system/facility(ies), with all necessary
facilities, within the City of Yakima, Washington (the "City"); setting
forth provisions, terms and conditions accompanying the grant of this
franchise; providing for City regulation of construction, operation,
maintenance and use of the natural gas transmission/distribution
system/facility(ies); prescribing penalties for the violations of its
provisions; and setting an effective date.
BE IT ORDAINED BY THE CITY OF YAKIMA that a franchise is hereby granted to
Cascade Natural Gas Corporation, to operate and maintain a natural gas
transmission/distribution system/facility(ies) in the City of Yakima, Washington, upon the
following express terms and conditions:
SECTION 1 - DEFINITIONS
1.1 (A) Captions. Throughout this franchise Ordinance, captions to sections are
intended solely to facilitate reading and to reference the sections and provisions of this
franchise Ordinance. The captions shall not affect the meaning and interpretation of this
franchise Ordinance.
1.1 (B) Definitions. For the purposes of this franchise Ordinance the following
terms, phrases, words and their derivations shall have the meaning given herein. When not
inconsistent with the context, words used in the present tense include the future, words in the
plural number include the singular number, words in the singular number include the plural
number and the use of any gender shall be applicable to all genders whenever the sense
requires. The words "shall" and "will" are mandatory and the word "may" is permissive.
Where a term in this franchise Ordinance is not defined in this Section and there exists a
definition for the term in the applicable state and/or federal law, the applicable state and/or
federal law definition shall apply. Other terms in this franchise Ordinance that are not defined
in this Section shall be given their common or ordinary meaning.
1.2 "City" shall mean City of Yakima, Washington, and all the incorporated
territory within as of the effective date of this franchise Ordinance and any other areas later
added thereto by annexation or other means.
1.3 "City Council" shall mean the City Council of the City of Yakima,
Washington.
1.4 "Customer" means any person(s) who legally receives any one or more of the
services provided by CNG utilizing the natural gas transmission/distribution
system/facility(ies).
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1.5 "Days" shall mean calendar days.
1.6 "Franchise" shall mean the right granted by this franchise Ordinance and
conditioned as set forth herein by which the City authorizes CNG to erect, construct,
reconstruct, operate, dismantle, test, use and maintain a natural gas transmission/distribution
in the City. The franchise granted herein shall be a non-exclusive franchise.
1.7 "Franchise service area" shall mean that area within the incorporated City
limits in which CNG shall extend its services.
1.8
Corporation.
"Grantee" shall refer to, as incorporated or used herein, Cascade Natural Gas
1.9 "Gross revenue" shall have a meaning consistent with any existing or future
City Code. Gross Revenue shall include, without limitation, any and all compensation in
whatever form, from any source, directly earned by CNG or any affiliate of CNG or any other
person who would constitute an operator of CNG's natural gas transmission/distribution
system/facility(ies) under applicable local, state and/or federal law, derived from the
transmission, distribution, delivery, and sale of natural gas originating or terminating in the
City (including all sums earned or charged whether received or not).
1.10 "Natural gas transmission/distribution system/facility(ies)" means
collectively, any and all natural gas systems, including, but not limited to, conduits,
equipment, gas pipes, pipelines, mains, laterals, conduits, feeders, regulators, valves, meters,
meter -reading devices, fixtures, communications systems, appliances, attachments,
appurtenances, and supporting structures, and/or any other tangible component of CNG's
natural gas transmission/distribution system/facility(ies), located in the City's rights-of-way,
utilized by CNG in the operation of activities authorized by this franchise Ordinance. The
abandonment by CNG of any Facilities as defined herein shall not act to remove the same
from this definition.
1.11 "Permittee" means any person who has been granted a permit by the assigned
permitting authority.
1.12 "Permitting authority" means the head of the City division or department
authorized to process and grant permits required to perform work in the City's rights-of-way,
or the head of any agency authorized to perform this function on the City's behalf. Unless
otherwise indicated, all references to the Permitting Authority shall include the designee of
the department, division or agency head.
1.13 "Person" means any individual, sole proprietorship, corporation, partnership,
association, joint venture or other form of organization of any kind and the lawful trustee,
successor, assignee, transferee or personal representative thereof.
1.14 "Penalties" means any and all monetary penalties provided for in this
franchise Ordinance.
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1.15 "Right-of-way" or "rights-of-way" shall mean the surface of and the space
above and below any public street, road, highway, freeway, easement, lane, path, alley, court,
sidewalk, parkway or driveway now or hereafter existing as such within all incorporated areas
of the City.
1.16 "Street" or "streets" shall mean the surface of and the space above and below
the right-of-way of any public street, road, highway, freeway, easement, lane, path, alley,
court, sidewalk, parkway or driveway now or hereafter existing as such within all
incorporated areas of the City.
1.17 "WUTC" shall mean the Washington Utilities and Transportation
Commission.
1.18 "Year", "annual" or "annually" means the period consisting of a full
calendar year, beginning January 1 and ending December 31, unless otherwise provided for in
this franchise Ordinance.
SECTION 2 - FRANCHISE
2.1 Grant of Franchise. Pursuant to the laws of the State of Washington,
including, but not limited to, RCW 35A.47.040 and RCW 80.28, the City hereby grants to
Cascade Natural Gas Corporation, a non-exclusive franchise which authorizes CNG, subject
to the terms of this franchise Ordinance, to construct a natural gas transmission/distribution
system/facility(ies) in, along, among, upon, across, above, over, under or in any matter
connected with the rights-of-way located in the City and for that purpose to erect, install,
construct, repair, replace, reconstruct, maintain or retain in, on, over, under, upon, across or
along any rights-of-way or extensions thereof and additions thereto, such conduits,
equipment, gas pipes, pipelines, mains, laterals, conduits, feeders, regulators, valves, meters,
meter -reading devices, fixtures, communications systems, appliances, attachments, and
supporting structures, and/or any other tangible component of CNG's natural gas
transmission/distribution system/facility(ies) as may be necessary or appurtenant to the
natural gas transmission/distribution system/facility(ies). Said franchise shall constitute both
a right and an obligation to provide the services of a natural gas transmission/distribution
system/facility(ies) as required by the provisions of this franchise Ordinance, subject to
CNG's line extension policy as approved by the WUTC.
2.2 Franchise Term. The term of this franchise shall be ten (10) years,
commencing on November 17, 2015, and expiring on November 17, 2025 at midnight, unless
extended as described herein and in accordance with the provisions in Section 2.7 of this
franchise Ordinance, or terminated sooner in accordance with this franchise Ordinance. The
City reserves the right to extend this franchise for up to two (2) additional five (5) year
periods, upon ninety (90) days written notice to CNG prior to its expiration or upon a shorter
written notice to CNG if agreed to by CNG. Any written extension to this franchise
Ordinance shall be presented for consideration and approval to the City Council at a City
Council business meeting, and if accepted and approved by CNG, executed by CNG. This
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provision does not affect the City's right to revoke this franchise for cause, because of a
breach of any promise, condition or stipulation stated herein.
2.3 Franchise Non -Exclusive. The franchise granted herein shall be non-
exclusive. The City specifically reserves the right to grant, at any time, such additional
franchises for a natural gas transmission/distribution system/facility(ies) as it deems
appropriate provided, however, such additional grants shall not operate to materially modify,
revoke or terminate any rights previously granted to CNG. The grant of any additional
franchise shall not of itself be deemed to constitute a modification, revocation or termination
of rights previously granted to CNG. Any franchise granted pursuant to this franchise
Ordinance shall confer and impose substantially similar rights and obligations. In establishing
the rights and obligations pursuant to a franchise, consideration shall be given to the services
to be provided, the area to be served, the commitments made by the applicant to the City, the
regulatory authority of the City and the investment proposed by such applicant. In no event
will the City impose discriminatory rights or obligations on any franchise applicant.
2.4 Authority Granted.
A. Subject to local, state and federal law, this franchise Ordinance grants
the authority, right and privilege to CNG to operate and maintain a natural gas
transmission/distribution system/facility(ies) including all equipment and all other
appurtenances necessary for the transmission, distribution, delivery, and sale of natural
gas in, upon, along, above, over and under the streets and rights-of-way in the City.
B. CNG's right to construct, erect, install, modify, operate and maintain its
natural gas transmission/distribution system/facility(ies) is subject to the terms,
conditions and requirements of this franchise Ordinance, the City Charter and is
specifically subject to the requirement that CNG obtain permits as set forth in this
franchise Ordinance.
C. CNG expressly acknowledges and agrees, by acceptance of this
franchise, that its rights under this franchise Ordinance are subject to the police power
of the City to adopt and enforce general ordinances necessary to the safety, health and
welfare of the public and CNG agrees to comply with all such applicable general laws
and ordinances enacted by the City pursuant to such police power. The City, by the
granting of this franchise, does not render or to any extent lose, waive, impair or
lessen the lawful powers and rights now or hereafter vested in the City to regulate the
use of its rights-of-way and tax, regulate or license the use thereof, and CNG, by its
acceptance of this franchise, acknowledges and agrees that all lawful powers and
rights, whether regulatory or otherwise, as are or may be from time to time vested in
or reserved to the City, shall be in full force and effect and CNG shall be subject to the
exercise thereof by the City at any time.
D. CNG expressly acknowledges and agrees, by acceptance of this
franchise, that conduits, equipment, gas pipes, pipelines, mains, laterals, conduits,
feeders, regulators, valves, meters, meter -reading devices, fixtures, communications
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systems, appliances, attachments, and supporting structures, and/or any other tangible
component of CNG's natural gas transmission/distribution system/facility(ies) as may
be necessary or appurtenant to the natural gas transmission/distribution
system/facility(ies) in the City rights-of-way which are subsequently acquired by CNG
and which, if acquired prior to this original franchise grant, would have been subject
to this franchise Ordinance and the permitting authority related thereto, shall be
subject to the provisions of this franchise Ordinance and all permits related thereto.
E. In return for promises made and subject to the stipulations and
conditions stated herein, the City grants to CNG permission to use the City's rights-of-
way to transmit, distribute, deliver, and sell natural gas to persons within the franchise
Service Area. To the extent of the City's interests, permission is similarly granted to
CNG to use areas outside the City's rights-of-way which are reserved by regulation,
practice or dedication for public utilities, but in such areas, CNG's use is also subject
to conditions now or hereafter recognized by the City as generally applicable to
natural gas or underground conduit utilities.
2.5 Limits on Permission.
A. Permission does not extend to areas outside those listed in Section 2.4,
E of this franchise Ordinance, or otherwise to any area outside the authority of the
City to extend franchised -use permission, such as buildings or private areas not
reserved for utilities. CNG is solely responsible to make its own arrangements for any
access to such places.
B. This franchise Ordinance does not extend permission to municipal
buildings or other municipally owned or controlled structures. For such locations,
CNG shall make specific arrangements directly with the municipal department or
division controlling such building or other structure.
C. Permission granted by this franchise Ordinance is non-exclusive. CNG
stipulates the City may grant similar permission to others.
D. CNG shall not permit installations by others in the franchise service
area without written approval of the City. Such approval shall not be in lieu of a
franchise or other requirements of the City. Whether or not permitted, CNG remains
responsible for all third party users of the natural gas transmission/distribution
system/facility(ies) for compliance with this franchise Ordinance.
E. No privilege or exemption is granted or conferred by this franchise
Ordinance except as may be specifically prescribed.
F. Any privilege claimed under this franchise Ordinance in any street or
right-of-way shall be subordinate to any prior lawful occupancy or any subsequent
exercise of City police power. The grant of this franchise shall not impart to CNG any
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fee title property rights in or on any public or private property to which CNG does not
otherwise have title.
2.6 Franchise Service Area. The franchise service area shall be that area within
the present or future city limits of the City of Yakima, Washington.
2.7 Franchise Renewal or New Franchise.
A. The City may establish appropriate requirements for new franchises or
franchise renewals consistent with federal, state and local law.
B. Nothing in this franchise Ordinance shall be construed to require
renewal of this franchise.
2.8 Renegotiation. In the event that any provision of this franchise Ordinance
becomes invalid or unenforceable and the City or CNG expressly finds that such provision
constituted a consideration material to entering into this franchise, or in the event of
significant change in the law regulating this franchise or change in municipal authority to act
under the terms of this franchise Ordinance, or in the event of significant change or
advancement in technology governing CNG's functions, the City and CNG may mutually
agree to renegotiate any or all of the terms of this franchise. The party seeking renegotiation
shall serve on the other party written notice of an offer to renegotiate. In the event the other
party accepts the offer to renegotiate, the parties shall have one hundred twenty (120) days to
conduct and complete the renegotiation. Nothing in this franchise Ordinance shall be
construed to require acceptance by either the City or CNG of an offer to renegotiate.
2.9 Revocation.
A. In addition to any rights set out elsewhere in this franchise Ordinance,
the City reserves the right to declare a forfeiture or otherwise revoke this franchise and
all rights and privileges pertaining thereto in the event that:
(1) The City determines CNG is in violation of any material
provision of this franchise Ordinance and fails to correct the violation after
written notice of the violation and proposed forfeiture and a reasonable
opportunity thereafter to correct the violation as noted in Section 8.2 of this
franchise Ordinance; or
(2) CNG is found by a court of competent jurisdiction to have
engaged in any actual or attempted fraud or deceit upon the City, persons or
customers; or
(3) CNG becomes insolvent, unable or unwilling to pay its debts as
they become due, or is adjudged a bankrupt; or
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(4) CNG fails, refuses, neglects or is otherwise unable to obtain
and/or maintain any permit required by any local, federal or state regulatory
body regarding CNG's construction, maintenance and operation of its natural
gas transmission/distribution system/facility(ies), providing that the issuance of
any such required permit has not been unreasonably withheld by any local,
federal or state regulatory body.
B. For purposes of this Section, the following are material provisions of
this franchise Ordinance, allowing the City, without limitation, to exercise its rights
under this Section or as set forth elsewhere in this franchise Ordinance:
(1) The invalidation, failure to pay or any suspension of CNG's
payment of any fees or taxes due the City under this franchise Ordinance;
(2) Any failure by CNG to submit timely reports regarding the
calculation of any fees or taxes due the City under this franchise Ordinance;
(3) Any failure by CNG to maintain the liability insurance required
under this franchise Ordinance;
(4) Any failure by CNG to maintain and provide the City a copy of
a Performance Bond as required under this franchise Ordinance;
(5) Any failure by CNG to otherwise fully comply with the
requirements of this franchise Ordinance.
C. Upon occurrence of one or more of the events set out above, following
sixty (60) days written notice to CNG of the occurrence and the proposed forfeiture
and an opportunity for CNG to be heard, the City may, by ordinance or other
appropriate document, declare a forfeiture. In a hearing, CNG shall be afforded due
process rights as if the hearing were a contested case hearing subject to Washington
law, including the right to cross-examine witnesses and to require that all testimony be
on the record. Findings from the hearing shall be written and shall stipulate the
reasons for the City's decision. If a forfeiture is lawfully declared, all rights of CNG
under this franchise Ordinance shall immediately be divested without a further act
upon the part of the City.
2.10 Receivership. The City shall have the right to declare a forfeiture or otherwise
revoke this franchise Ordinance one hundred eighty (180) days after the appointment of a
receiver, or trustee, to take over and conduct the business of CNG, whether in receivership,
reorganization, bankruptcy or other action or proceeding, unless such receivership or
trusteeship shall have vacated prior to the expiration of said one hundred eighty (180) days, or
unless:
A. Within one hundred eighty (180) days after his/her election or
appointment, such receiver or trustee shall have been approved by the City and shall
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fully have complied with all the provisions of this franchise Ordinance and remedied
all defaults thereunder; and
B. Such receiver or trustee, within said one hundred eighty (180) days,
shall have executed an agreement, duly approved by the City as well as the court
having jurisdiction in the premises, whereby such receiver or trustee assumes and
agrees to be bound by each and every provision of this franchise Ordinance.
2.11 Expiration. Upon expiration of this franchise Ordinance, the City shall have
the right, at its own election, to:
(1) Extend this franchise, as provided for herein, though nothing in
this provision shall be construed to require such extension;
Renew this franchise, in accordance with applicable valid law;
Invite additional franchise applications or proposals;
Terminate this franchise without further action; and
Take such other action as the City deems appropriate.
2.12 Transfer of Ownership.
A. This franchise shall not be sold, leased, mortgaged, assigned or
otherwise transferred, nor shall any of the rights or privileges herein granted or
authorized be sold, leased, mortgaged, assigned or otherwise transferred, either in
whole or in part, nor shall title hereto, either legal or equitable, or any right, interest or
property herein, pass to or vest in any person, except CNG, either by act of CNG or
operation of law, without the prior consent of the City, expressed in writing. The
granting of such prior consent in one instance shall not render unnecessary any
subsequent prior consent in another instance. Any transfer of ownership shall make
this franchise subject to revocation unless and until the City shall have given written
prior consent.
B. Upon any transfer as heretofore described, CNG shall, within sixty (60)
days thereafter, file with the City a copy of the deed, agreement, mortgage, lease or
other written instrument evidencing such sale, lease, mortgage, assignment or transfer,
certified and sworn as correct by CNG.
C. Every such transfer as heretofore described, whether voluntary or
involuntary, shall be deemed void and of no effect unless CNG shall, within sixty (60)
days after such transfer has been made, file such certified copy as is required.
D. The requirements of this Section shall not be deemed to prohibit the use
of CNG's property as collateral for security in financing the construction or
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acquisition of all or part of the natural gas transmission/distribution
system/facility(ies) franchised hereunder. However, such financing shall be subject to
the provisions of this franchise Ordinance.
E. The City reserves the right to invoke any or all provisions of this
franchise Ordinance upon CNG's successors or assigns, judgment creditors or
distributees of facilities or property used in enjoyment of privileges conferred herein,
whether or not stated elsewhere, all without waiver of the right to withhold consent not
expressly given of any such transfer and/or require a new franchise.
2.13 Change in Control. CNG shall promptly notify the City through the City
Council of any proposed change in, transfer of or acquisition by any other party of control of
CNG. If beneficial ownership of thirty percent (30%) or more of the stock of CNG, or any
parent company of CNG immediate or otherwise, or of any entity now owning or later
acquiring such a beneficial interest is acquired by a single entity or by several entities under
common control, and if such entity or agent of common control is other than an organization
a) whose primary business is natural gas transmission/distribution system/facility(ies)
operation, and b) is more than fifty percent (50%) owned by CNG or a parent of CNG, then a
change in control will be deemed to have taken place unless the City, upon request of CNG,
finds otherwise. Such a change in control shall make this franchise Ordinance subject to
revocation unless and until the City shall have given written consent thereto. For the purpose
of determining whether it will consent to such change, transfer or acquisition of control, the
City may inquire into the qualifications of the prospective controlling party to perform the
obligations of CNG under this franchise Ordinance. CNG shall assist the City in any such
inquiry. The City may condition its consent upon such terms and conditions as it deems
appropriate. Consent to the transfer shall not be unreasonably withheld.
2.14 No Stock to be Issued. CNG promises never to issue any capital stock solely
on account of this franchise or any permission granted under the terms of this franchise
Ordinance, or the value thereof. CNG further agrees it will not have any right to receive,
upon a condemnation proceeding or other negotiation by the City to acquire the properties of
CNG, any payment or award on account of this franchise Ordinance or permission or its
value. CNG waives all such claims against the City and also any claims for any municipal
revision, action, inaction, curtailment, suspension, revocation or change in municipal policy
or regulation relating to CNG's franchised activities. The City shall have no obligation to
make any payment to CNG or award in condemnation for any other asset or interest of CNG,
except as required under the State of Washington Constitution and United States Constitution
or as state or federal laws may preemptively require, which value shall be determined at the
time of such condemnation.
2.15 Other Codes and Ordinances. Nothing in this franchise Ordinance shall be
deemed to waive the requirements of the other lawful codes and ordinances of the City
regarding permits, fees to be paid or manner of construction.
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2.16 Survival of Terms. Sections 4.7, 5.3, 6 and 9 of this franchise Ordinance shall
continue in effect for a five year period after the expiration, forfeiture or revocation of this
franchise.
SECTION 3 - ENFORCEMENT AND ADMINISTRATION BY THE CITY
3.1 City Jurisdiction and Supervision. The City, through its Engineering
Division (or its successor(s)), shall have continuing regulatory jurisdiction and supervision
over the operation and enforcement of this franchise Ordinance and may from time to time
adopt such reasonable rules and regulations as it may deem necessary for the conduct of the
business contemplated herein. All questions of application, interpretation, conflict or
ambiguity arising out of or in connection with this franchise Ordinance are to be determined
by the manager of the Engineering Division (or his/her successor(s)), except only where
otherwise specifically stated, or in the event that a different person or body may be designated
by the City through written notice to CNG.
3.2 Grantee to Have No Recourse. Subject to state and federal law, CNG shall
have no recourse other than non -monetary declaratory or injunctive relief against the City and
shall be awarded no monetary recovery whatsoever for any incidental or consequential
damages, including but not limited to lost profits, arising out of any provision or requirement
of this franchise Ordinance, nor from the City's regulation under this franchise Ordinance, nor
from the City's exercise of its authority to grant additional franchises.
3.3 Acceptance of Power and Authority of City. CNG expressly acknowledges
by acceptance of this franchise Ordinance that:
A. It has relied upon its own investigation and understanding of the power
and authority of the City to grant and enforce this franchise Ordinance and that it has
no objection to the exercise of the City's power and authority therein;
B. It has not been induced to enter into this franchise arrangement by any
understanding or promise or other statement, whether verbal or written, by or on
behalf of the City concerning any term or condition of this franchise Ordinance that is
not specifically included herein;
C. It has carefully read the terms and conditions contained herein and
CNG is willing to and does accept all the obligations of such terms and conditions to
the extent not inconsistent with state or federal law and further agrees that it will not
set up as against the City any claim that any provision of this franchise Ordinance is
unreasonable, arbitrary, invalid or void subject to its rights herein; and
D. The matters contained in CNG's application and all subsequent
applications or proposals for renewals of this franchise, and as stated in any and all
other presentations to the City, except as inconsistent with law, regulations or local
ordinance, are incorporated into this franchise Ordinance as though set out verbatim.
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3.4 Acts Discretionary, Reservation of Authority. All City acts undertaken
pursuant to this franchise Ordinance shall be deemed discretionary, guided by the provisions
of this franchise Ordinance and considerations of the public health, safety, aesthetics and
convenience. CNG stipulates and agrees that this franchise is subject to the City Charter of
the City of Yakima. CNG understands the Charter's provisions are incorporated herein, where
applicable. CNG agrees that the City reserves all municipal powers now or hereafter granted
by law, including without limitation, the power to tax and license, regulate activities of land
use, protect the public health and safety and regulate and control use of the public right-of-
way.
3.5 Delegation of Authority to Regulate. The City reserves the right to delegate
its regulatory authority wholly or in part to the federal government, state government and/or
to agents of the City, including but not limited to an agency which may be formed to regulate
several City franchises.
SECTION 4 - OPERATION IN STREETS AND RIGHTS-OF-WAY
4.1 Use of Streets. CNG may, subject to terms of this franchise Ordinance, erect,
install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and
along the City streets and rights-of-way such conduits, equipment, gas pipes, pipelines, mains,
laterals, conduits, feeders, regulators, valves, meters, meter -reading devices, fixtures,
communications systems, appliances, attachments, appurtenances, and supporting structures,
and/or any other tangible component and other property and equipment as are necessary and
appurtenant to the operation of a natural gas transmission/distribution system/facility(ies)
within the City. All installation, construction, alteration and/or maintenance of any and all of
CNG's natural gas transmission/distribution system/facility(ies) within City streets and rights-
of-way incident to CNG's transmission, distribution, delivery, and sale of natural gas shall,
regardless of who performs installation, construction, alteration and/or maintenance, be and
remain the responsibility of CNG.
4.2 Construction or Alteration.
4.2.1 Permits. CNG shall in all cases comply with all lawful City
ordinances and regulations regarding the acquisition of permits and other such items
as may be reasonably required in order to install, construct, alter and maintain the
natural gas transmission/distribution system/facility(ies). CNG shall apply for and
obtain all permits necessary for installation, construction, alteration and/or
maintenance of any such facilities, and for excavation and laying of any natural gas
transmission/distribution facilities within City streets and rights-of-way. CNG shall
pay all applicable fees due for any such permits.
4.2.2 Schedule and Maps.
A. Prior to beginning installation, construction, alteration or maintenance
of the natural gas transmission/distribution system/facility(ies), CNG shall provide the
City with an initial work schedule for work to be conducted in City streets and rights -
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of -way. CNG shall, upon request, provide information to the City regarding its
progress in completing or altering the natural gas transmission/distribution
system/facility(ies).
B. Upon completion of construction or alteration of the natural gas
transmission/distribution system/facility(ies), CNG shall provide the City with a map
showing the location of its installed natural gas transmission/distribution
system/facility(ies), as built. Such "as -built" maps shall be in a form acceptable to the
City and submitted to the City within ninety days of the completion or the alteration.
C. CNG shall provide a map to the City's Engineering Division, or its
successor, showing the location of CNG's facilities in City streets and rights-of-way
on a scale of 3500 feet per inch or in whatever standard scale the City adopts for
general use:
and
(1) One year after the effective date of this franchise Ordinance;
(2) Annually thereafter.
4.2.3 Good Engineering.
A. CNG promises that all of its property and facilities shall be constructed,
operated and maintained in good order and condition in accordance with good
engineering practice. In connection with the civil works of CNG's natural gas
transmission/distribution system/facility(ies), such as, but not limited to, trenching,
paving, compaction and locations, CNG promises to comply with the edition of the
American Public Works Association Standard Specifications which is in current or
future use by the City, together with the City's Supplemental Specifications thereto, all
as now or hereafter amended.
B. CNG promises that the natural gas transmission/distribution
system/facility(ies) shall comply with all applicable federal, state and local laws,
regulations and codes, including, but not limited to the National Fuel Gas Code, the
National Electric Safety Code and the Washington Electrical Construction Code.
4.3 Facilities Placement.
4.3.1 General Standards. The natural gas transmission/distribution
system/facility(ies) shall be constructed and maintained in such manner as not to
obstruct, hinder, damage or otherwise interfere with sewers, water pipes, other utility
fixtures or any other property of the City, or any other pipes, wires, conduits or other
facilities that may have been installed in City streets or rights-of-way by or under the
City's authority. CNG shall maintain a minimum underground horizontal separation
of five (5) feet from City water facilities and ten (10) feet from above -ground City
water facilities; PROVIDED, that for development in new areas, the City, together
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with CNG and other utility purveyors or authorized users of City streets or rights-of-
way, will develop and follow the City's determination of a consensus for guidelines
and procedures for determining specific utility locations, subject additionally to this
franchise Ordinance.
4.3.2 Limited Access. CNG must follow the City's requirements for the
placement of facilities in City streets and rights-of-way, including City requirements
for location of facilities in specific City streets and rights-of-way, and must in any
event install facilities in a manner that minimizes interference with the use of City
streets and rights-of-way by others, including others that may have or may install other
utility facilities in City streets and rights-of-way. The City may require that CNG
install facilities at a particular time, at a specific place and/or in a particular manner as
a condition of access to a particular City street or right-of-way and the City may
exclude CNG's access to a particular street or right-of-way in accordance with City
requirements for placement of facilities.
4.3.3 Consistency with Designated Use. Notwithstanding the grant to use
City streets and rights-of-way contained in this franchise Ordinance, no street or right-
of-way shall be used by CNG if the City, in its sole opinion, determines that such use
is inconsistent with the terms, conditions or provisions by which such street or rights-
of-way were created or dedicated or presently used under state and local laws.
4.3.4 Non -Interference. CNG shall exert its best efforts to construct and
maintain the natural gas transmission/distribution system/facility(ies) so as not to
interfere with other uses of City streets or rights-of-way. CNG shall individually
notify all residents affected by any proposed installation, construction, alteration or
maintenance of the natural gas transmission/distribution of such work where and when
such notification is reasonably possible, such as when the activity may result in
service interruptions or restricted access.
4.3.5 Underground Utility Coordination. CNG hereby states it is familiar
with RCW Ch. 19.122, Washington State's "Underground Utilities" statute, and
understands local procedures, custom and practice relating to the one -number locator
service program. CNG hereby agrees to coordinate its underground installation and
planning activities with the City's underground plan and policies.
4.4 Coordination with Other Users. CNG shall coordinate its activities with
other utilities and users of City streets and rights-of-way to avoid unnecessary cutting,
damage or disturbance of such streets and rights-of-way and shall conduct its planning,
design, installation, construction, alteration and maintenance of the natural gas
transmission/distribution at all times so as to maximize the life and usefulness of the paving
and municipal infrastructure. In addition, the City may determine with respect to franchised
uses, in the exercise of reasonable discretion, when and where reasonable accommodation
shall be made by CNG to the City for public needs or, where requested, other third party
needs, how such accommodation should be made and a reasonable apportionment of any
expenses of same; PROVIDED, that this franchise creates no third party beneficial interests or
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accommodation. Notwithstanding the foregoing, it remains the responsibility of CNG to
anticipate and avoid conflicts with other City streets or rights-of-way occupants or users,
other utilities, franchisees or permittees. The City assumes no responsibility for such
conflicts. Further, CNG shall give appropriate notice(s) to any other City streets or rights-of-
way occupants or users, other utilities, franchisees, permittees, divisions of the City or other
units of government owning or maintaining facilities which may be affected by CNG's
planning, design, installation, construction, alteration or maintenance of the natural gas
transmission/distribution system/facility(ies).
4.5 Relocation.
A. The City shall have the right during the term of this franchise, as it may
be extended, renewed or otherwise altered in accordance with this franchise
Ordinance, to require CNG to change the location of its natural gas
transmission/distribution system/facility(ies) within City streets and rights-of-way
when the public convenience and necessity requires such change. If the City elects or
requires a third party to alter, repair, realign, abandon, improve, vacate, reroute or
change the grade of any street, public way or other public property; or to construct,
maintain or repair any public improvement; or to replace, repair, install, maintain or
otherwise alter any cable, wire, wire conduit, pipe, line, pole, wireholding structure,
structure or other facility, including a facility used for the provision of utility or other
services or transportation of drainage, sewage or other liquids, CNG shall, upon
request, except as otherwise hereinafter provided, at no expense to the City, remove or
relocate, as necessary, any of its conduits, equipment, gas pipes, pipelines, mains,
laterals, conduits, feeders, regulators, valves, meters, meter -reading devices, fixtures,
communications systems, appliances, attachments, utility access covers, and
supporting structures, and/or any other tangible component of CNG's natural gas
transmission/distribution system/facility(ies) which it has installed and when the
public convenience and necessity requires such change.
B. If the City requires CNG to remove or relocate its facilities located
within City streets or rights-of-way, the City will make a reasonable effort to provide
CNG with an alternate location for its facilities within City streets or rights-of-way.
C. The City, or a third party contracted by the City to perform work as
defined in Section 4.5 of the franchise Ordinance, shall provide CNG with no less than
forty-five (45) days advance written notice advising CNG of the date or dates removal
or relocation shall be completed. The City, or its contracted third party, and CNG may
agree to, and document in writing, a completion duration greater than forty-five (45)
days if the complexity of the work or other circumstances necessitate additional time.
D. If during the term of this franchise, as it may be extended, renewed or
otherwise altered in accordance with this franchise Ordinance, another entity which
holds a franchise or any utility requests CNG to remove or relocate its natural gas
transmission/distribution system/facility(ies) to accommodate the construction,
maintenance or repair of the requesting party's facilities, or the more efficient use of
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such facilities, or to "make ready" the requesting party's facilities for use by others, or
because CNG is using a facility which the requesting party has a right or duty to
remove, CNG shall do so to the extent necessary to accommodate the reasonable
use(s) planned by the requesting entity. The parties involved may decide among
themselves who is to bear the cost of removal or relocation; PROVIDED, that the City
shall not be liable for any such cost(s).
E. Any person requesting CNG to remove or relocate its facilities shall
give CNG no less than forty-five (45) days advance written notice advising CNG of
the date or dates removal or relocation is to be undertaken; PROVIDED, that no
advance written notice shall be required in emergencies or in cases where public
health and/or safety or property is endangered.
F. If CNG fails, neglects or refuses to remove or relocate its facilities as
directed pursuant to Section 4.5C of this franchise Ordinance, or in emergencies or
where public health and/or safety or property is endangered, the City may do such
work or cause it to be done and the cost, including all direct, indirect and/or
consequential costs and expenses incurred by the City due to CNG's failure, neglect or
refusal thereof shall be paid solely by CNG.
G. If CNG fails, neglects or refuses to remove or relocate its facilities as
directed pursuant to Section 4.5C of this franchise Ordinance, and the City incurs costs
due to the delay, directly or through its contract with a third party, all such costs
including all direct, indirect, delay and/or consequential costs and expenses shall be
paid solely by CNG.
H. If CNG causes any damage to private property or public property in the
process of removing or relocating its facilities, CNG shall pay the owner of the
property for such damage.
I. CNG does hereby promise to protect and save harmless the City, its
officers, agents and employees from any customer or third party claims for service
interruption or other losses in connection with any removal or relocation of CNG's
natural gas transmission/distribution system/facility(ies).
4.6 Restoration.
A. Whenever CNG damages or disturbs any area in or near City streets,
rights-of-way, paved area or public improvement, CNG shall, at its sole cost, expense
and liability, restore such area in or near City streets, rights-of-way, paved area or
public improvement to at least its prior condition, or the City standard, whichever is
greater, to the satisfaction of the City.
B. Whenever any opening is made by CNG in a hard surface pavement in
any City street or right-of-way, CNG shall refill, restore, patch and repave entirely all
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surfaces opened as determined necessary by the City in order to maintain and preserve
the useful life thereof.
C. For pavement restorations, any patch or restoration shall be thereafter
properly maintained in good condition and repair by CNG until such time as the area
is resurfaced or reconstructed.
D. The City hereby reserves the right, after providing reasonable notice to
CNG, to remove and/or repair any work done by CNG which, in the determination of
the City, is inadequate. The cost thereof, including the cost of inspection and
supervision, shall be paid solely by CNG.
E. Should CNG fail, neglect, refuse or delay in performing any obligation
here or elsewhere stated, or where the City deems necessary to protect the public right-
of-way or to avoid liability, risk or injury to the public or the City, the City may
proceed to perform or cause to have performed such obligation, including any
remedial or preventative action deemed necessary, at CNG's sole expense and
liability, but no action or inaction by the City shall relieve CNG of its obligation to
hold the City harmless as set forth in Section 6.6 of this franchise Ordinance. Prior to
undertaking corrective effort, the City shall make a reasonable effort to notify CNG,
except no notice is needed if the City declares an emergency or determines a need for
expedient action. This remedy is supplemental and not alternative to any other
municipal right.
F. Whenever CNG damages or disturbs any area in or near City streets,
rights-of-way, paved area or public improvement, CNG stipulates that the City may,
without limitation:
(1) Require CNG to repave an entire lane or greater affected area
within any cut or disturbed location; and/or
(2) Require CNG to common trench with any other underground
installation in City streets or rights-of-way, with cost sharing to be negotiated
between the parties involved, or in the absence of agreement, as directed by the
City in a non-discriminatory manner.
G. All requirements of this Section pertaining to public property shall also
apply to the restoration of private easements and other private property.
H. If CNG causes any damage to private property in the process of
restoring facilities, CNG shall pay the owner of the property for such damage.
I. All of CNG's work under this Section shall be done in strict
compliance with all applicable rules, regulations and ordinances of the City.
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J. Any survey monuments which are disturbed or displaced by CNG in its
performance of any work under this franchise Ordinance shall be referenced and
restored by CNG, as per WAC 332-120, as from time to time amended, and all
pertinent federal, state and local standards and specifications.
K. CNG shall perform all restoration work promptly.
4.7 City Right to Require Removal of Property.
A. Upon the expiration of this franchise and the cessation of use of the
natural gas transmission/distribution system/facility(ies) by CNG and subject to
applicable law and regulations, CNG shall remove, at its sole cost and expense, any
underground facilities by trenching or opening City streets and rights-of-way along the
extension thereof or otherwise which is ordered to be removed by the City Council
based upon a determination by the Council and concurrence by the Washington
Utilities and Transportation Commission that removal is required in order to eliminate
or prevent a hazardous condition which can reasonably expected to affect public
health and safety. Upon the removal of any underground facilities, CNG shall restore
such affected area in or near City streets, rights-of-way, paved area or public
improvement to at least its prior condition, or the City standard, whichever is greater,
to the satisfaction of the City.
B. Any natural gas distribution/transmission system/facilities to be left in
place after cessation of use by CNG shall be made inert by purging all natural gas
from such facilities (including displacement of natural gas with an appropriate inert
gas) and disconnecting and sealing such facilities (including displacement of natural
gas with an appropriate inert gas) and disconnecting and sealing such facilities, all in
compliance with applicable regulations and industry standards.
4.8 Emergency Repairs. In the event that emergency repairs to the natural gas
transmission/distribution system/facility(ies) are necessary, CNG shall notify the City of the
need for such repairs. CNG may immediately initiate such emergency repairs and shall apply
for appropriate permits the next business day following discovery of the emergency.
4.9 Emergency Notifications. In the event that an emergency occurs where there
is a threat or occurrence of a major interruption of service, or where there is a threat or
occurrence involving the health, safety or welfare of the public, CNG shall promptly notify
the Public Safety Communications Center (911), the Mayor's Office and the City Manager's
Office.
4.10 City Right of Inspection. The City shall have the right to inspect and approve
all installation, construction, alteration or maintenance work performed by CNG within the
franchise Service Area and to make such tests as it deems necessary to ensure compliance
with the terms and conditions of this franchise Ordinance and other pertinent provisions of
law, the cost thereof to be paid solely by CNG, but no action or inaction by the City shall
create any duty or obligation by the City to inspect, test or approve any installation,
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construction, alteration or maintenance work performed by CNG. In addition, at the time any
permit is issued by the City for any installation, construction, alteration or maintenance work
performed by CNG, the City may require CNG to furnish certification from a qualified
independent engineer that CNG's facilities are constructed in accordance with good
engineering practice and are reasonably protected from damage and injury.
4.11 After -Acquired Facilities. CNG expressly acknowledges and agrees, by
acceptance of this franchise Ordinance, that any natural gas transmission/distribution facilities
located within City streets or rights-of-way which are subsequently acquired by CNG or upon
addition or annexation to the City of any area in which CNG retains or acquires any such
facilities (if acquired prior to this original franchise grant) and which would have been subject
to this franchise Ordinance and the permitting authority related thereto shall immediately be
subject to the provisions of this franchise Ordinance and all permits related thereto.
4.12 Information. CNG hereby promises to maintain and supply to the City, at
CNG's sole expense, any information requested by the City to coordinate municipal functions
with CNG's activities within City streets and rights-of-way. CNG shall provide such
information, upon request, either in hard copy and/or electronic format compatible with the
City's data base system, as now or hereafter existing, including the City's geographic
information service (GIS) data base.
SECTION 5 - CUSTOMER SERVICE POLICIES
5.1 City Reservation of Rights. The City reserves the right to enforce any and
all customer service and consumer protection standards at any time that such standards are
established by state or federal law or regulation as applicable to natural gas
transmission/distribution system/facility(ies) operations should such right be granted to the
City by such state or federal law or regulation.
5.2 Response to Customers. CNG shall promptly respond to all requests from
customers of the natural gas transmission/distribution system/facility(ies) for service, repair,
installation, information or any other such reasonable and appropriate requests and shall
render effective service, make repairs promptly and interrupt service only for good cause and
for the shortest time possible as required by state and/or federal law or regulation. CNG shall
promptly respond to complaints from customers of the natural gas transmission/distribution
system/facility(ies) and shall attempt to promptly resolve such complaints as required by state
and/or federal law or regulation.
5.3 City Franchise Contact Identified. CNG shall provide all appropriate and
pertinent contact information for the person identified by the City as responsible for handling
questions and complaints for the City regarding CNG's operation in City streets and rights-of-
way to any and all customers of the natural gas transmission/distribution system/facility(ies)
and any interested persons. Said information shall be provided to such customers in a format
acceptable to the City.
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5.4 Complaints. CNG hereby acknowledges the City's interest in the prompt
resolution of all complaints made to the City regarding CNG's operation in City streets and
rights-of-way and CNG shall work in close cooperation with the City to resolve such
complaints.
SECTION 6 - COMPENSATION AND FINANCIAL PROVISIONS
6.1 Taxes and Fees.
6.1.1 City Occupation Tax on Utilities.
A. CNG hereby stipulates that all of its business activities in the City as
identified in this franchise Ordinance are taxable activities subject to the rate imposed
under the City's occupation taxes on utilities, adopted in Yakima Municipal Code
Section 5.50.050. Therefore, throughout the term of this franchise Ordinance, all
CNG business activities within the City are taxable activities, subject to the rate
imposed under the City's occupation taxes on utilities as adopted in Yakima Municipal
Code Section 5.50.050.
B. CNG and the City understand that RCW 35.21.860, as of the effective
date of this franchise Ordinance, prohibits imposition of a municipal franchise fee
applicable to revenues from natural gas transmission/distribution business activities.
CNG agrees that if this statutory prohibition is removed, and the City obtains authority
from the State to impose a municipal franchise fee applicable to revenue from natural
gas transmission/distribution business activities, and if the City imposes such a fee on
all other entities engaged in natural gas transmission/distribution activities within the
City, then CNG's business activities will be subject to a franchise fee.
C. CNG and the City further understand and agree that RCW 35.21.870,
as of the effective date of this franchise Ordinance, limits the rate of City tax upon
natural gas transmission/distribution business activities to six percent (6%), unless a
higher rate is approved by a vote of the people. However, CNG and the City agree
that nothing in this franchise Ordinance shall limit the City's power of taxation, as may
now or hereafter exist.
6.1.2 Other Fees.
A. CNG shall pay the City all reasonable costs of granting, enforcing or
reviewing the provisions of this franchise Ordinance as ordered by the City manager
or designee, whether as a result of accrued in-house staff time or out-of-pocket
expenses or administrative costs, provided that the payment of said costs by CNG
shall be required only in the event that CNG is found to be in violation of the terms
and provisions of this franchise Ordinance. Notwithstanding the foregoing, CNG shall
pay the City all costs and municipal fees related to receiving and approving permits,
licenses or other required approvals, inspecting plans and construction, or relating to
the preparation of a detailed statement pursuant to RCW 43.21C.
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B. Upon request of CNG, the City will submit proof of any charges or
expenses incurred as defined in Section 6.1.2, A of this franchise Ordinance. Said
charges or expenses shall be paid by CNG no later than thirty (30) days after CNG's
receipt of the City's billing thereof.
C. CNG shall pay all other taxes and fees applicable to its operations and
activities within the City, all such obligations also being a condition of this franchise.
Such payments shall not be deemed franchise fees or payments in lieu thereof.
6.2 Payments.
A. CNG shall make all required payments in the form, intervals and
manner requested by the City director of budget and finance and shall furnish the City
any and all information related to the City's revenue collection functions reasonably
requested.
B. As provided for in Section 5.50.090 of the Yakima Municipal Code,
City occupation tax on utilities payments shall be transmitted by CNG monthly to the
City of Yakima. Said payments shall be received by the City no later than the 25th of
each month for the preceding calendar month. Not later than the date of each
payment, CNG shall file with the City a written statement signed by the chief financial
officer, or his/her designee, of CNG which identifies in detail the sources and amounts
of gross revenue earned by CNG during the month for which payment is made, in
accordance with Section 7.1 of this franchise Ordinance, and any additional
information as required by Chapter 5.50 of the Yakima Municipal Code. No
acceptance of any payment by the City shall be construed as an accord that the amount
paid is, in fact, the correct amount, nor shall such acceptance of payment be construed
as a release of any claim which the City may have for further or additional sums
payable under the provisions of this franchise Ordinance.
C. Neither current nor previously paid utility taxes may be subtracted from
the gross revenue amount upon which utility tax payments are calculated and due for
any period. Nor shall any license fee(s) paid by CNG be subtracted for purposes of
calculating utility tax payments.
D. Any utility taxes owing pursuant to this franchise Ordinance which
remain unpaid for more than ten (10) days after the dates specified herein shall be
delinquent and shall thereafter accrue interest at twelve percent (12%) per annum or
two percent (2%) above prime lending rate as quoted by major Seattle banks,
whichever is greater.
6.3 Financial Records.
A. CNG shall manage all of its operations in accordance with a policy of
keeping books and records open and accessible to the City. The City shall have the
right, as necessary or desirable for effectively administering and enforcing this
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franchise Ordinance, to inspect at any time during normal business hours upon thirty
(30) days prior written notice, all books, records, maps, plans, financial statements,
service complaint logs, performance test results, records required to be kept by CNG
and/or any parent company of CNG pursuant to the rules and regulations of the
WUTC and other regulatory agencies, and other like materials CNG and/or any parent
company of CNG which directly relate to the operation of this franchise Ordinance.
B. Access to the aforementioned records referenced in Section 6.3.A shall
not be denied by CNG to representatives of the City on the basis that said records
contain "proprietary" information. However, to the extent allowed by Washington
law, the City shall protect the trade secrets and other confidential information of CNG
and/or any parent company of CNG.
C. CNG hereby agrees to meet with a representative of the City upon
request to review its methodology of record keeping, financial reporting, computing
utility tax payments and other procedures, the understanding of which the City deems
necessary for understanding the meaning of such reports and records.
D. The City agrees to request access to only those books and records, in
exercising its rights under this franchise Ordinance, which it deems reasonably
necessary for the enforcement and administration of this franchise Ordinance.
6.4 Auditing.
A. The City or its authorized agent may at any time conduct an
independent audit of the revenues of CNG in order to verify the accuracy of utility tax
payments made to the City. CNG and each parent company of CNG shall cooperate
fully in the conduct of such audit. In case of audit, the City director of budget and
finance may require CNG to furnish a verified statement of compliance with CNG's
obligations or in response to any questions. Said certificate may be required from an
independent certified public accountant at CNG's sole expense. All audits will take
place on CNG's premises or at offices furnished by CNG, which shall be a location
within the City of Yakima. CNG agrees, upon request of the City director of budget
and finance, to provide copies of all documents filed with any federal, state or local
regulatory agency, to mail to the City on the same day as filed, postage prepaid,
affecting any of CNG's facilities or business operations in City.
B. In the event it is determined, as a result of an audit conducted by the
City or its authorized agent, that CNG has underpaid City utility taxes by five percent
(5%) or more than was due the City for any given period, then CNG shall reimburse
the City for the entire cost of such audit and any back utility taxes with interest
accrued at twelve percent (12%) per annum or two percent (2%) above prime lending
rate as quoted by major Seattle banks, whichever is greater, within thirty (30) days of
the completion and acceptance of the audit by the City.
6.5 Insurance.
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6.5.1 Coverages. CNG shall maintain, throughout the term of this franchise
Ordinance, liability insurance insuring CNG, its officers, employees and agents, with
regard to all claims and damages specified in Section 6.5 herein, in the minimum
amounts as follows:
A. Commercial Liability Insurance. On or before the date this franchise
Ordinance is fully executed by the parties, CNG shall provide the City with a
certificate of insurance as proof of commercial liability insurance with a minimum
liability limit of One Million Dollars ($1,000,000) combined single limit bodily injury
and property damage. This coverage will have a per job aggregate endorsement and
Washington stop gap coverage. Said certificate of insurance shall clearly state who
the provider is, the amount of coverage, the policy number, and when the policy and
provisions provided are in effect. Said policy shall be in effect for the duration of this
franchise Ordinance. The policy shall name the City, its elected and appointed
officials, officers, agents and employees as additional insureds, and shall contain a
clause that the insurer will not cancel or change the insurance without first giving the
City thirty (30) calendar days prior written notice (any language in the clause to the
effect of "but failure to mail such notice shall impose no obligation or liability of any
kind upon the company" shall be crossed out and initialed by the insurance agent).
The insurance shall be with an insurance company or companies rated A -VII or higher
in Best's Guide and admitted in the State of Washington. If CNG uses any contractors
and/or subcontractors to perform any of the work referenced in this franchise
Ordinance, such contractors and/or subcontractors shall maintain the same minimum
limits of liability and comply with all other provisions discussed above in this
subsection entitled "Commercial Liability Insurance."
B. Commercial Automobile Liability Insurance. On or before the date
this franchise Ordinance is fully executed by the parties, CNG shall provide the City
with a certificate of insurance as proof of commercial automobile liability insurance
with a minimum liability limit of One Million Dollars ($1,000,000) combined single
limit bodily injury and property damage. Said certificate of insurance shall clearly
state who the provider is, the amount of coverage, the policy number, and when the
policy and provisions provided are in effect. Said policy shall be in effect for the
duration of this franchise Ordinance. The policy shall name the City, its elected and
appointed officials, officers, agents and employees as additional insureds, and shall
contain a clause that the insurer will not cancel or change the insurance without first
giving the City thirty (30) calendar days prior written notice (any language in the
clause to the effect of "but failure to mail such notice shall impose no obligation or
liability of any kind upon the company" shall be crossed out and initialed by the
insurance agent). The insurance shall be with an insurance company or companies
rated A -VII or higher in Best's Guide and admitted in the State of Washington. If
CNG uses any contractors and/or subcontractors to perform any of the work
referenced in this franchise Ordinance, such contractors and/or subcontractors shall
maintain the same minimum limits of liability and comply with all other provisions
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discussed above in this subsection entitled "Commercial Automobile Liability
Insurance."
C. Umbrella Liability Insurance. CNG, and its contractors and/or
subcontractors (as described below), shall maintain umbrella liability insurance
coverage, in an occurrence form, over underlying commercial liability and automobile
liability. On or before the date this franchise Ordinance is fully executed by the
parties, CNG shall provide the City with a certificate of insurance as proof of umbrella
coverage with a minimum liability limit of Fifteen Million Dollars ($15,000,000).
CNG's contractors and/or subcontractors operating directly on the natural gas
transmission/distribution system shall maintain a minimum umbrella liability limit of
insurance of Five Million Dollars ($5,000,000). The insurance shall be with an
insurance company or companies rated A -VII or higher in Best's Guide and admitted
in the State of Washington.
Providing coverage in the amounts as set forth above shall not be construed to relieve
CNG from liability in excess of those limits.
6.5.2 Proof of Insurance. CNG shall file with the City copies of all
certificates of insurance showing up-to-date coverages and additional insured
coverages as set forth above.
6.5.3 Alteration of Insurance. Insurance coverages, as required by this
franchise Ordinance, shall not be changed, cancelled or otherwise altered without
approval of the City. CNG shall provide the City no less than thirty (30) days prior
written notice of any such proposed change, cancellation or other alteration. The City
may, at its option, review all insurance coverages. If it is determined by the City that
circumstances require and that it is reasonable and necessary to increase insurance
coverage and liability limits above such coverage and limits as are set forth in this
franchise Ordinance, in order to adequately cover the risks of the City, CNG and
CNG's officers, agents and employees, the City may require additional insurance to be
acquired by CNG. Should the City exercise its right to require additional insurance,
the City will provide CNG with thirty (30) days prior written notice. If CNG does not
believe that the requested amount of the additional insurance is reasonably necessary,
then CNG has the right to terminate the franchise if the City continues to require such
additional insurance coverage.
6.5.4 Failure to Procure. CNG acknowledges and agrees, by acceptance of
this franchise Ordinance, that failure to procure and maintain the insurance coverages
as detailed in Section 6.5.1 of this franchise Ordinance shall constitute a material
breach of this franchise Ordinance, as provided for in Section 2.9, B, 3 of this
franchise Ordinance. In the event of such failure to procure and maintain the
referenced insurance coverages, the City may immediately suspend CNG's operations
under this franchise Ordinance, terminate or otherwise revoke this franchise Ordinance
and/or, at its discretion, procure or renew such insurance in order to protect the City's
interests and be reimbursed by CNG for all premiums in connection therewith.
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6.6 Indemnity, No Estoppel, No Duty.
A. CNG shall, at its sole expense, protect, defend, indemnify and hold
harmless the City, its elected officials, and in their capacity as such, the officials,
agents, officers and employees of the City from any and all claims, lawsuits, demands,
actions, accidents, damages, losses, liens, liabilities, penalties, fines, judgments,
awards, costs and expenses arising directly or indirectly from or out of, relating to or
in any way connected with the performance or non-performance, by reason of any
intentional or negligent act, occurrence or omission of CNG, whether singularly or
jointly with others, its representatives, permittees, employees, contractors or
subcontractors, whether or not such acts or omissions were authorized or contemplated
by this franchise Ordinance or applicable law, including by not limited to the
construction, installation, maintenance, alteration or modification of the natural gas
transmission/distribution system/facility(ies); arising from actual or alleged injury to
persons or property, including the loss of use of property due to an occurrence,
whether or not such property is physically damaged or destroyed; arising out of or
alleged to arise out of CNG's failure to comply with any and all provisions of any
statute, regulation or resolution of the United States, State of Washington or any local
agency applicable to CNG and its business. Nothing herein shall be deemed to
prevent the parties indemnified and held harmless herein from participating in the
defense of any litigation by their own counsel at such parties' expense. Such
participation shall not under any circumstances relieve CNG from its duty of defense
against liability or of paying any judgment entered against such party.
Notwithstanding any provision of this Section to the contrary, CNG shall not be
obligated to indemnify, defend or hold the City harmless to the extent any claim,
demand, lien, damage or liability arises out of or in connection with negligent acts or
omissions of the City.
B. Whenever any judgment is recovered against the City or any other
indemnitee for any such liability, costs, or expenses, such judgment shall be
conclusive against CNG, not only as to the amount of such damage, but as to its
liability, provided CNG has reasonable notice from the City of the pendency of such
suit and of the City's intention to claim indemnity hereunder. Under such
circumstances, CNG may also request the opportunity to defend or participate in the
suit with legal counsel of its choice, at its expense, said request not to be unreasonably
denied.
C. No action, error or omission, or failure to act by the City, its agents,
officers, officials or employees, in connection with administering its rights, duties or
regulatory functions related to this franchise Ordinance shall be asserted by CNG,
directly, indirectly or by way of seeking indemnification or as an assertion that the
City has waived or is estopped to assert any municipal right hereunder, against the
City, its boards, departments, divisions, officers, officials or employees.
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D. It is not the intent of this franchise Ordinance to acknowledge, create,
imply or expand any duty or liability of the City with respect to its role as a
franchising authority, in the exercise of its police powers or for any other purpose.
Any City duty nonetheless deemed created shall be a duty to the general public and
not to any specific party, group or entity.
SECTION 7 — REPORTING REQUIREMENTS
All reports required under Section 7 of this franchise Ordinance may be requested by the City
to be provided by CNG in hard copy and/or electronic format compatible with City databases,
including, but not limited to, the GIS system.
7.1 Monthly Reports. As provided for in Section 5.50.090 of the Yakima
Municipal Code, within twenty-five (25) calendar days after the end of the previous month,
CNG shall submit to the City a completed form reporting any and all revenues for the
previous month. Said reports shall be verified by the chief financial officer, or his/her
designee, of CNG. Said reports shall contain an accurate statement in summarized form, as
well as in detail, of CNG's revenues and the computation basis and method utilized for the
purpose of calculating any and all taxes imposed by the City. These reports shall be in a form
reasonably required by the City. The City may, from time to time, make such reasonable
amendments to the forms as are required to ensure that all revenues are reported clearly and
accurately.
7.2 Annual Reports. Not later than ninety (90) days following the end of CNG's
fiscal year, and/or as required by the Securities and Exchange Commission (SEC) and/or by
state regulations, CNG shall present, at its sole expense, a written report to the City which
shall include:
A. A full and complete set of CNG's audited financial statements for the
previous year.
B. The names and business postal addresses, telephone numbers and,
where applicable, the electronic mail addresses of the local manager and engineer of
the natural gas transmission/distribution system/facility(ies).
7.3 Monitoring and Compliance Reports. Only upon request of the City, but no
more than once per year, CNG shall provide a written report of any and all technical
performance tests for the natural gas transmission/distribution system/facility(ies) required by
the WUTC or any other governmental agency having jurisdiction over the natural gas
transmission/distribution system/facility(ies).
7.4 Additional Reports. CNG shall prepare and furnish to the City or any other
entity exercising lawful regulatory authority in connection with this franchise Ordinance, at
the times and in the form prescribed by the City or such other regulatory entity, such
additional reports with respect to CNG's operations, affairs, transactions or property, as may
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be reasonably necessary and appropriate to the performance of the rights, functions or duties
of the City or such other regulatory entity in connection with this franchise Ordinance.
7.5 Communication with Regulatory Agencies. CNG shall simultaneously file
with the City a copy of each petition, application and tariff related to the natural gas
transmission/distribution system/facility(ies) transmitted by CNG to, or received by CNG
from, any federal, state or other regulatory commissions or agencies having competent
jurisdiction to regulate the construction or operation of the natural gas
transmission/distribution system/facility(ies), including, specifically, the WUTC. In addition,
CNG and its affiliates shall within ten (10) days of any communication transmitted by CNG
to, or received by CNG from, any judicial or regulatory agency regarding any alleged or
actual violation of a law, regulation or other requirement related to the natural gas
transmission/distribution system/facility(ies), provide the City a copy of the communication,
whether specifically requested by the City to do so or not.
7.6 Preservation of Confidential Information. The City shall protect
information provided to the City by CNG designated as confidential or proprietary by CNG,
given such information had been so designated at the time it was provided to the City, to the
maximum extent permissible under Chapter 42.17 RCW, or as provided by other state law as
it may now or hereafter exist.
SECTION 8 — REMEDIES AND PROCEDURE FOR REMEDYING FRANCHISE
VIOLATIONS
8.1 Remedies for Franchise Violations.
A. In addition to the remedies set forth elsewhere in this franchise
Ordinance, the City shall have the right to assert any or all of the following remedies
in the event CNG violates or defaults on, as determined by the City, any provision of
this franchise Ordinance:
(1) Drawing upon or foreclosing all or any part of any security
provided under this franchise Ordinance; PROVIDED, however, such drawing
or foreclosure shall be only in such a manner and in such amount as the City
reasonably determines is necessary to remedy the violation or default. Should
the City take such action as described herein, CNG shall be responsible for all
direct and actual costs related to such action, including, but not limited to, legal
and administrative costs incurred by the City;
(2) Commence an action at law for monetary damages or seek other
equitable relief;
(3) In the case of substantial violation or default, as determined by
the City, of a material provision of this franchise Ordinance, declare this
franchise to be revoked;
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(4) Seek specific performance of any provision of this franchise
Ordinance, which reasonably lends itself to such remedy, as an alternative to
seeking damages.
B. In determining which remedy or remedies, as set forth herein, are
appropriate, the City shall take into consideration the nature and extent of the violation
or default, the remedy needed to prevent such violations or defaults from occurring in
the future, whether CNG has a history of previous violations of the same or similar
kind and such other considerations as are appropriate under the circumstances.
8.2 Procedure for Remedying Franchise Violations.
8.2.1 Notice of Violation. In the event the City determines CNG has not
complied with any term or condition of this franchise Ordinance, the City shall notify
CNG of the exact nature of the alleged noncompliance.
8.2.2 CNG's Right to Cure or Respond. CNG shall have thirty (30) days
from receipt of notice by the City of any alleged noncompliance with any term or
condition of this franchise Ordinance to:
(1) Respond to the City contesting the assertion of noncompliance;
or
(2) Cure such violation or default or, in the event that by the nature
of the violation or default such violation or default cannot be cured within a
thirty (30) day period, initiate reasonable steps to remedy such violation or
default and notify the City of the steps being taken and the projected date such
remedy will be completed.
8.2.3 Public Hearing. In the event CNG fails to respond to a notice, as
described herein, or in the event CNG fails to cure such violation or default pursuant
to the procedures set forth herein, the City shall schedule a public hearing to
investigate any alleged violation or default. The City shall provide CNG twenty (20)
calendar days notice of the time and place of such hearing and provide CNG an
opportunity to be heard at such hearing.
8.3 Enforcement. In the event the City, after such hearing as described in
subsection 8.2.3 of this franchise Ordinance has been conducted, upholds its determination
that CNG has violated or defaulted on any provision of this franchise Ordinance, the City may
impose any of the remedies set out in Section 8.1, A of this franchise Ordinance.
8.4 Failure to Enforce. CNG shall not be relieved of any of its obligations to
comply promptly with any provision of this franchise Ordinance by reason of any failure of
the City to enforce prompt compliance, and the City's failure to enforce shall not constitute a
waiver of rights or acquiescence in CNG's conduct.
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8.5 Acts of Nature. CNG shall not be held in violation, default or noncompliance
with the provisions of this franchise Ordinance, nor suffer any enforcement or penalty related
thereto, where such violation, default or noncompliance is caused by acts of nature, power
outages or other events reasonably beyond its ability to control. However, CNG shall take all
reasonable steps necessary to provide service despite such occurrences.
8.6 Alternative Remedies. Nothing in this franchise Ordinance shall be deemed
to bar the right of the City or CNG to seek or obtain judicial relief from any violation of this
franchise Ordinance or any rule, regulation, requirement or directive promulgated thereunder.
Neither the existence of other remedies identified in this franchise Ordinance nor the exercise
thereof shall be deemed to bar or otherwise limit the right of the City to recover monetary
damages for such violation by CNG, or to seek and obtain judicial enforcement of CNG's
obligations under this franchise Ordinance by means of specific performance, injunctive relief
or mandate, or any other judicial remedy at law or in equity.
SECTION 9 — MISCELLANEOUS PROVISIONS
9.1 Posting and Publication. CNG shall assume the cost of posting and
publication of this franchise Ordinance as such posting and publication is required by law, and
such is payable upon CNG's filing of acceptance of this franchise Ordinance.
9.2 Service of Notice. Except as otherwise specifically provided herein, any
notice required or permitted to be given under this franchise Ordinance shall be deemed
sufficient if provided in writing and when (1) delivered personally to the following
addressee(s) or deposited with the United States Postal Service, postage paid, certified or
registered mail; (2) sent by overnight or commercial air courier; or (3) sent by facsimile
transmission addressed as follows, or to such other address as the receiving party hereafter
shall specify in writing:
Notices to the City shall be addressed to each of the following:
City Manager
City of Yakima
129 N. Second Street
Yakima, WA 98901
(509) 576-6335 (fax)
Director of Utilities & Engineering
City of Yakima
129 N. Second Street
Yakima, WA 98901
(509) 576-6380 (fax)
Notices to CNG shall be addressed to each of the following:
Cascade Natural Gas Corporation
Central Region Director
200 N. Union Street
Kennewick, WA 99336-2212
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Cascade Natural Gas Corporation
Central Region Director
701 South First Avenue
Yakima, WA 98902
(509) 457-8112 (fax)
9.3 Compliance with Laws. CNG shall comply with all federal and state laws
and regulations, including regulations of any administrative agency thereof, as well as the
general ordinances, resolutions, rules and regulations of the City, pursuant to the City's lawful
authority, heretofore or hereafter adopted or established during the entire term of this
franchise Ordinance. In the event any valid and superior law, rule or regulation of any
governing authority or agency having jurisdiction contravenes the provisions of this franchise
Ordinance subsequent to its adoption, then the provisions of this franchise Ordinance shall be
superseded only to the limited extent that the provisions hereof are in conflict and contrary to
any such law, rule or regulation. Nothing in this franchise Ordinance shall limit the City's
right of eminent domain under state law. Nothing in this franchise Ordinance shall be deemed
to waive the requirements of any lawful code or resolution of the City regarding permits, fees
to be paid or manner of construction.
9.4 Governing Law and Venue. This franchise Ordinance shall be governed by
and construed in accordance with the laws of the State of Washington, and venue for any
litigation arising out of or in connection with privileges extended herein is stipulated to be in
Yakima County.
9.5 Severability. If any section, subsection, sentence, clause, phrase or portion of
this franchise Ordinance is for any reason declared by a court of competent jurisdiction to be
void, invalid or unenforceable, such portion shall be deemed a separate, distinct and
independent provision and such declaration shall not affect the validity of the remaining
portions thereof. In such event, the City and CNG shall negotiate in good faith to modify this
franchise Ordinance as may be necessary to meet the requirements of the law and/or to
effectuate the intention of this franchise Ordinance. In the event that such modifications are
barred by any legal requirements governing any party, the City and CNG shall use their best
efforts to otherwise avoid prejudice to the respective parties' interests and to implement
changes to effectuate the intent in entering into this franchise Ordinance.
9.6 Guarantee of Performance. CNG hereby agrees that it enters into this
franchise Ordinance voluntarily and in order to secure and in consideration of the grant from
the City of a ten (10) year franchise. Performance pursuant to the terms and conditions of this
franchise is guaranteed by CNG.
9.7 Force Majeure.
A. For the purposes of this Section, the term "Force Majeure" shall mean
acts of God, landslides, earthquakes, lightning, fires, hurricanes, volcanic activity,
storms, floods, washouts, droughts, civil disturbances, acts of terrorism or of the
public enemy, partial or entire failure of utilities, strikes, explosions, lockouts or other
industrial disturbances, insurrections, public riots or other similar events which are not
reasonably within in the control of the parties hereto.
B. If CNG is wholly or partially unable to carry out its obligations under
this franchise Ordinance as a result of a Force Majeure, CNG shall provide the City
prompt notice of such Force Majeure, describing the same in reasonable detail, and
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CNG's obligations under this franchise Ordinance, other than for payment of moneys
due, shall not be deemed in violation or default for the duration of the Force Majeure.
CNG agrees to use its best efforts to remedy as soon as possible, under the
circumstances, CNG's inability, by reason of Force Majeure, to carry out its
responsibilities and duties under this franchise Ordinance.
9.8 Consent. Wherever the consent or approval of either CNG or the City is
specifically required in this franchise Ordinance, such consent or approval shall not be
unreasonably withheld.
9.9 No Third Party Beneficiaries. There shall be no third party beneficiaries of
this franchise Ordinance.
9.10 Franchise Ordinance Acceptance. CNG shall execute and return to the City,
within fifteen (15) days after passage of the franchise Ordinance by the City Council, three (3)
original franchise Ordinances, by which CNG acknowledges that it has carefully read the
terms and conditions of the franchise Ordinance and accepts all of the terms and conditions of
the franchise Ordinance and this franchise and agrees to abide by the same. In accepting this
franchise Ordinance, CNG shall indicate that it has relied upon its own investigation of all
relevant facts, that it has had the assistance of counsel, that it was not induced to accept this
franchise Ordinance, that the franchise Ordinance represents the entire agreement between
CNG and the City and that CNG accepts all reasonable risks related to the interpretation of
the franchise Ordinance and this franchise. The executed franchise Ordinances shall be
returned to the City accompanied by evidence of insurance as required in Sections 6.5.1 and
6.5.2 of this franchise Ordinance. In the event CNG fails to submit a franchise Ordinance as
provided for herein, or fails to provide the required accompanying documents, this franchise
Ordinance shall be null and void.
9.11 Previous Rights Abandoned. This franchise Ordinance supersedes any and
all other rights, privileges, powers, immunities and authorities owned, possessed, controlled
or exercisable by CNG pursuant to any previous franchise in the City.
9.12 Effective Date. This franchise Ordinance shall become effective on
November 17, 2015, provided that this franchise and franchise Ordinance shall be null and
void and shall have no effect whatsoever unless CNG shall, within fifteen (15) days of the
date the City Council passes the franchise Ordinance, file with the City Clerk a written
acceptance thereof pursuant to Section 9.10 of this franchise Ordinance.
PASSED BY THE CITY COUNCIL, signed and approved this day of
September, 2015.
Attest:
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Micah Cawley, Mayor
Sonya Claar Tee, City Clerk
Publication Date:
Effective Date: November 17, 2015
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ACCEPTED AND APPROVED by CASCADE NATURAL GAS CORPORATION
this day of , 2015.
State of
County of
)ss.
CASCADE NATURAL GAS CORPORATION
By:
Print Name:
Its:
I hereby certify that I know or have satisfactory evidence that
is the person who appeared before
me, and said person acknowledged that he/she signed this instrument, and on oath stated that
he/she was authorized to execute the instrument on behalf of Cascade Natural Gas
Corporation, and acknowledged it as the of Cascade
Natural Gas Corporation, to be the free and voluntary act of such party for the uses and
purposes mentioned in this instrument.
Dated this day of , 2015.
Print Name:
NOTARY PUBLIC in and for the State of
, residing at
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