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HomeMy WebLinkAboutOrd 915-2021 Granting Franchise to Universal Natural Gas, LLCORDINANCE NO: Qi5-o�iDai AN ORDINANCE GRANTING TO UNIVERSAL NATURAL, GAS, LLC, A TEXAS LIMITED LIABILITY COMPANY, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO CONSTRUCT, MAINTAIN, AND OPERATE PIPELINES AND EQUIPMENT IN THE CITY OF ANNA, COLLIN COUNTY, TEXAS, FOR THE TRANSPORTATION, DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID CITY FOR ALL PURPOSES; PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE PUBLIC RIGHT-OF-WAY; AND PROVIDING THAT SUCH FEE SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES; PROVIDING FOR A TERM AND EFFECTIVE DATE; PROVIDING FOR WRITTEN ACCEPTANCE OF THIS FRANCHISE; PROVIDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC; PROVIDING FOR SEVERABILITY; AND ORDAINING OTHER PROVISIONS RELATED TO THE SUBJECT MATTER HEREOF. WHEREAS, the City of Anna, Texas (hereinafter referred to as "City") has been requested to grant a nonexclusive franchise for the transportation and sale of natural gas to Universal Natural Gas, LLC (hereinafter referred to as "Company"); and WHEREAS, the City Council of the City finds that it is in the best interest of the City to adopt this franchise ordinance allowing Company to furnish and supply gas to the general public in the City, and to transport, deliver, sell, and distribute gas in, out of, and through the City for all purposes; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: SECTION 1. GRANT OF AUTHORITY. A. The City hereby grants to Company and, subject to Section 15, its successors and assigns, consent to use and occupy the present and future Public Right -of -Way, as defined herein, for the purpose of laying, maintaining, constructing, protecting, operating, and replacing therein and thereon pipelines and all other appurtenant equipment (the "System") to deliver, transport, supply, sell, and distribute gas in, out of, and through City for persons, firms, and corporations, including all the general public, and to sell gas to persons, firms, and corporations, including all the general public, within the City's corporate limits, as such limits may be amended from time to time during the term of this Franchise. B. Said consent being granted for a term ending September 30, 2031. Unless written notice of its intent to renegotiate is provided by either the City or Company at least 180 days prior to the expiration of any term, the Franchise shall be extended for up to two (2) additional terms ("Renewal Terms") of five (5) years each on the same terms and conditions as set forth herein. C. The provisions set forth in this Ordinance represent the terms and conditions under which Company shall construct, operate, and maintain the System within City, hereinafter sometimes referred to as the "Franchise." In granting this Franchise, City does not in any manner surrender or waive its regulatory or other rights, powers and immunities under and by virtue of the Constitution and statutes of the State of Texas as the same may be amended, nor any of its rights and powers under or by virtue of present or future Page 1 ordinances of City, including but not limited to generally applicable ordinances regulating the use of Public Right -of -Way including without limitation the Public Right -Of -Way Management Ordinance; provided, however, that in the event the terms of such ordinances conflict with the terms of this ordinance, then the terms of this ordinance shall control. To the extent of any conflict between any ordinance and the City Charter, the City Charter shall control. Company, by its acceptance of this Franchise, agrees that all such lawful regulatory powers and rights as the same may be from time to time vested in City shall be in full force and effect and subject to the exercise thereof by City at any time. Notwithstanding anything in this Ordinance to the contrary, Company's acceptance of the terms of this Ordinance shall in no way affect or impair Company's rights, obligations or remedies under any federal or state law or regulation, nor shall such acceptance be deemed a waiver, release or relinquishment of Company's rights to contest, appeal or fBe suit with respect to any action or inaction of the City, including adoption of ordinances by the City, that Company believes is contrary to this Ordinance or any federal or state or regulation. D. Nothing in this ordinance waives any governmental immunity available to the City under Texas law. This ordinance is not intended to create a cause of action or liability for the benefit of third parties, but is solely for the benefit of the Company and the City. This ordinance is not intended to limit the ability of City or Company to settle claims through mediation. SECTION 2. DEFINITIONS. For the purposes of this Ordinance, the following terms, phrases, words, and their derivations shall have the meanings given herein. When not inconsistent with the context, words in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is always mandatory and not merely directory. a. "Affiliate" shall mean in relation to Company, a Person that controls, is controlled by, or is under common control with Company. As used in this definition, the term "control" means, with respect to a Person that is a corporation, the ownership, directly or indirectly, of more than 50% of the voting securities of such Person or, with respect to a Person that is not a corporation, the power to direct the management or policies of such Person, whether by operation of law, by contract, or otherwise. b. "City" shall mean the City of Anna, Texas. c. "City Charter" shall mean the City's Home Rule Charter, as amended. d. "City Code" shall mean The Anna City Code of Ordinances, as amended e. "Company" shall mean Universal Natural Gas, LLC a Texas limited liability company, its successors and assigns, but does not include an Affiliate, which shall have no right or privilege granted hereunder except through succession or assignment in accordance with Section 15, Page 2 f. "Franchise Fee(s) shall mean five percent (59/o) of Gross Revenues due to the City as described in further detail in Section 11.A. g. "Gross Revenues" shall mean: (1) all revenues, direct or indirect, derived by Company fiom the sale of gas to all classes of customers (excluding gas sold to another gas utility in the City for resale to its customers within Town) within the Town; (2) all revenues received by Company from the transportation of gas through the System of Company within the City to customers located within the Town; (3) the purchase price or, if the purchase price is not disclosed to the Company by the Transport Customer, the value of gas transported by the Company for Transport Customers through the System of Company within the City ("Third Party Sales") (excluding the value of any gas transported to another gas utility in the City for resale to its customers within the Town). Company shall request that each Transport Customer of the Company disclose to the Company the purchase price of said gas. Should the Transport Customer fail or refuse to disclose such purchase price to Company, the value of such gas shall be established by utilizing 110% of the Houston Ship Channel index of prices for large package of gas as published each month in "Inside FERC's Gas Market Report" under "Delivered Spot -Gas Prices" (or a successor publication or another publication agreed upon by City and Company) as reasonably near the time as the transportation service is performed; (4) Franchise Fees or other fees paid pursuant to this Ordinance, and the following "miscellaneous charges": charges to connect, disconnect, or reconnect gas; contributions in aid of construction (including but not limited to builder contributions); charges to handle returned checks from consumers within the Town; and State gross receipts fees. "Miscellaneous charges" may include certain other service charges that have, from time to time, been authorized in the rates and charges on file with the City. Any such service charge not already described in this Subsection 2.g.(4) will be included in the definition of Gross Revenues; and (5) monies received from the lease of System Facilities within the Public Right -of -Way; Notwithstanding the foregoing, "Gross Revenues" shall not include: (A) the revenue of any Affiliate or subsidiary of Company; (B) other than fees specifically included within the definition of Gross Revenues and Franchise Fees payable pursuant to this Ordinance, any taxes or fees required to be remitted to a third party, including the Town; (C) interest or investment income earned by Company; Page 3 (D) monies received from the lease or sale of real or personal property except for the lease of System Facilities within the Public Right -of --Way; (E) amounts billed or collected from Company's customers for refundable fees and deposits; (F) State or federal grants, credits or reimbursements; (G) reimbursements for damage to, or relocation of, any part of the System; (H) amounts billed or collected by the Company from its customers for charitable contributions such as Operation Roundup®; and (I) revenues billed but not ultimately collected or received by the Company. h. "Person" shall mean any natural person, or any association, firm, partnership, joint venture, corporation, or other legally recognized entity, whether for -profit or not -for -profit, but shall not, unless the context clearly intends otherwise, include City or any employee, agent, servant, representative or official of City. i. "Public Right -of --Way" shall mean public streets, alleys, highways, bridges, public easements, public places, public thoroughfares, grounds, and sidewalks of City, as they now exist or may be hereafter constructed, opened, laid out, or extended within the present limits of City, or in such territory as may hereafter be added to, consolidated, or annexed to City. j. "Public Right -Of --Way Management Ordinance" shall mean the City's public right -of --way management ordinance set forth in Article 10.03 of the City Code. k. "System" or• "System Facilities" shall mean all of Company's pipes, pipelines, gas mains, laterals, feeders, regulators, meters, fixtures, connections, and all other appurtenant equipment used in or incident to providing delivery, transportation, distribution, supply and sales of natural gas for heating, lighting, and power, located in the Public Right -of -Way within the corporate limits of the City. 1. "Transport Customer" shall mean any Person for which Company transports gas through the System of Company within the Public Right -of --Way for delivery within the City. SECTION 3. CONSTRUCTION MAINTENANCE OPERATION &RELOCATION OF COMPANY SYSTEM FACILITIES. A. All use and occupancy and all construction, reconstruction, expansion, repairs, excavation, or other work performed by Company, and all of Company's System installed in Public Right -of --Way, shall be in accordance with all generally applicable City codes and ordinances not in conflict with this Franchise, including without limitation the City Code, applicable building codes, City standard construction details applicable to the construction of public improvements, the Public Right -Of -Way Management Ordinance, subdivision ordinance, tree preservation ordinance, outdoor lighting ordinance, and the zoning ordinance, as may be hereafter adopted or amended. Company shall be responsible for all repairs and maintenance I�� resulting from any defects, impairments, or other substandard conditions of City property, including any disturbed, damaged or destroyed landscaping material, caused in whole or in part by the construction, maintenance, expansion, reconstruction, operation or use of City property by Company. Provided, however, that Company will not be responsible for repairs or maintenance to City facilities that Company or another party damages due to City's failure to mark, or City's incorrect marking of, City facilities but only in the event that Company requests that the City mark said facilities and has received written confirmation from City that such facilities have been marked at least seven business days before said damage occurs. B. Upon request of the City, Company shall remove and abate any portion of the System that is dangerous to life or property in accordance with any applicable law. Company shall operate and maintain its System and its related System Facilities in material compliance with applicable federal, state, and local laws governing natural gas facilities. C. Company or contractors working on behalf of Company shall be required to obtain permits for construction in Public Right -of -Way as provided in City ordinances but shall not be required to pay the City's permit fees. D. The City reserves the right to lay, and permit to be laid, any facilities, such as stormwater, sewer, gas, water, wastewater and other pipelines, cable, and conduits, or other improvements and to do and permit to be done any underground or overhead work that may be necessary or proper in, across, along, over, or under Public Right -of -Way occupied by Company. The City also reserves the right to change or permit to be changed in any manner any curb, sidewalk, highway, alley, public way, street, and utility lines, storm sewers, drainage basins, drainage ditches, and other City facilities. If City damages Company's System or System Facilities while doing work on City facilities, Company shall repair any such damage at City's expense. Provided, however, that City will not be responsible for repairs to Company facilities that City or another party damages due to Company's failure to mark, or Company's incorrect marking of, Company facilities but only in the event that City requests that the Company marls said facilities and has received written confirmation from Company that such facilities have been marked at least seven business days before said damage occurs. If Company damages any City facilities while doing work on Company Facilities, City shall repair any such damage at Company's expense. The City shall not be liable for any direct or consequential damage to Company or its customers that may arise from any interruption of service; and Company shall hold the City harmless and indemnify the City for said damages. E. When Company is required by City to remove or relocate its mains, laterals, and other facilities lying within Public Right -of --Way to accommodate a request by City, and costs of utility removals or relocations are eligible under federal, state, county, local, or other programs for reimbursement of costs and expenses incurred by Company as a result of such removal or relocation, and such reimbursement is required to be handled through City, Company costs and expenses shall be included in any application by Page 5 City for reimbursement if Company submits its cost and expense documentation to City prior to the filing of the application. City shall make all reasonable efforts to provide reasonable written notice to Company of the deadline for Company to submit documentation of the costs and expenses of such relocation to City in order for City to be able to submit its application for reimbursement to such program in a timely manner. Upon receipt of an amount of reimbursement intended for utility relocation including, but not limited to, gas utilities, City shall remit to Company, within sixty (60) days of receipt, the portion of reimbursement related to the relocation or removal of Company's facilities. F. Whenever by reason of the changes in the grade of City property, or in the location or the manner of construction, repair, maintenance, relocation, widening, raising or lowering of any public street, aHey, right -of-way, water line or pipe, gas line or pipe, sewer, or any other underground or overhead facility or structure for any reasonable and lawful purpose deemed necessary by the City, the Company shall at its own cost and expense, move, relocate, change, alter or modify any of its facilities including underground or overhead facilities located in any public street, alley, right -of --way or other property owned or occupied by the Town; such relocation shall be promptly made by Company when ordered in writing by the City, without claim for reimbursement or damages against the City. When Company is required to remove or relocate its mains, laterals or other System Facilities to accommodate construction by City without reimbursement from City, Company shall have the right to seek recovery of relocation costs as provided for in applicable state and/or federal law. When Company is required to remove or relocate its mains, laterals or other facilities to accommodate construction or widening of streets or alleys or other facilities or structures constructed for a governmental purpose by City as a result of Federal, State, County, City or other programs and is not reimbursed, Company shall have the right to seek a surcharge to recover relocation costs pursuant to Section 104.112 et al of the Texas Utilities Code, as amended. G. If City abandons any portion of the Public Right -of -Way in which Company has System Facilities, for public safety reasons or in furtherance of a public project, City shall determine whether it is appropriate to retain a public utility easement in such Public Right -of --Way for use by Company. If City determines, in its sole discretion, that the continued use of the Public Right -of -Way by Company is compatible with the abandonment of the Public Right -of -Way, then in consideration of the compensation set forth in Section 11, and to the maximum extent of its right to do so, City shall grant Company an easement for such use, and the abandonment of the Public Right -of --Way shall be subject to the right and continued use of Company. If City determines, in its sole reasonable discretion, that it is not appropriate to retain a public utility easement in such Public Right -of --Way, Company shall be responsible, subject to the provisions of this Section 3, for relocating its System from such Public Right -of --Way, as directed by City. If Public Right -of -Way is sold, conveyed, abandoned, or surrendered by City to a third party, such action shall be conditioned upon Company's right to maintain use of the former Public Right -of --Way. If the third party requests Company to relocate its System from the former Public Right -of --Way, and if such relocation is agreed to by Company, such relocation shall be at the expense of the party requesting same. In addition, in the event of a third party requesting the relocation, if the relocation cannot practically be made to another Public Right -of -Way, the expense of any right-of-way acquisition shall be considered a relocation expense to be reimbursed by the party requesting the relocation. H. The City reserves the right to authorize someone other than the Company to occupy Public Right -of -Way. In the event that the City authorizes someone other than the Company to occupy any Public Right -of -Way, such grant shall not unreasonably interfere with the non-exclusive rights herein granted to Company. I. Permits (1) Company's facilities shall not unreasonably interfere with Town -owned or controlled facilities and with vehicular and pedestrian use of Public Right -of -Way. (2) Company shall not be required to submit a permit application for the placement of facilities outside of the Public Right -of -Way; however, Company shall provide detailed drawings, in accordance with Company's customary practice, reflecting Company's installations on private property to the extent necessary for City to verify compliance with City ordinances related to zoning, development, building regulations, and setbacks, and for easement verification. (3) Company shall submit a permit application to City for the placement of new facilities, for upgrade or augmentation of existing facilities, or for replacement of existing facilities in the Public Right -of -Way. Such permit application shall include: (A) complete plans and detailed drawings reflecting compliance with all applicable zoning, development, and building requirements of the Town; and (B) all additional information requested by City reasonably related to the permit request. (4) Except as otherwise provided in this Section 3.I., following the submission of a permit application described herein, notice of City's approval or denial of Company's request for a permit shall be provided in accordance with City's usual procedures for processing of permit applications included but not limited to the City's Public Right -Of - Way Management Ordinance to the extent applicable. (5) City shall endeavor to complete its review of Company's application within thirty (30) days after City's receipt of the permit application. Prior to the expiration of the said thirty (30) day period, City shall request any additional information that is necessary to complete its review of Company's application. City shall issue a decision regarding Company's permit application within fifteen (15) days after receipt of Lite additional information. If City reasonably determines that the additional information is not sufficient to complete the review of Company's application, the City may request additional information. City shall issue a decision regarding the application within fifteen (15) days after receipt of all additionally requested information. ( 3) The Company may proceed with the placement of the facilities described in its permit application if written notice of City's approval or denial of Company's request for a permit is not provided within: (A) Fifteen days' after receiving written notice from the Company stating that Thirty (30) days have elapsed since Company filed its application for a permit with and City has not after receipt by City of the permit application (if no additional information was requested by Town), or (B) if City requested additional information under Section 3(I)(5), fifteen days' after receiving written notice from the Company stating that Fifteen (15) days have elapsed since Company supplied the additional information requested by the Town; provided, however, that City has determined the additional information is sufficient to complete the review of Company's application. (7) A permit application approved by the City shall be valid for a period of time consistent with the amount of time reasonably required and submitted in the permit application for the Company to perform the work described in the permit application. City shall grant an extension of such time as reasonably required to complete such work upon City's receipt of Company's request in writing for such an extension, but in no case shall the extended period exceed six (6) months from the date of such written request. J. Laying of Lines in Advance of Paving. (1) Whenever the City elects to pave any Public Right -of --Way in which Company's System Facilities already exist or in which Company may propose to install its System Facilities, Company will be provided the opportunity, at no expense to City, in advance of such paving to modify such System Facilities and to lay new System Facilities in such Public Right -of -Way. (2) At least ninety (90) calendar days prior to the planned paving or repaving of Public Right -of --Way, City shall give Company written notice of the intention of City to pave any such Public Right -of -Way. Upon receipt of such notice, Company shall initiate its review process to determine the need to modify its System Facilities, and the need to lay or modify service lines underneath the portions of the Public Right -of -Way to be paved. If Company determines such a need, Company shall promptly initiate such work and shall thereafter proceed in a good faith and workmanlike manner to completion of the necessary work within ninety (90) calendar days after receipt of the notice from the City. Company's failure to complete the necessary work within the ninety (90) day period may be excused at the City's discretion, if Company has promptly notified the City of the circumstances that have caused the delay, and has requested an extension of the construction period. City shall grant the extension unless withheld for good cause. K. Maps. In addition to maps provided as part of the permit application process, upon request by City made no more often than once in any 12-month period, Company shall provide maps showing the location of its primary System Facilities. In addition, Company shall cooperate in locating its System Facilities when necessary to avoid conflict and protect the health and safety of the public. SECTION 4. LIABILITY INSURANCE. Company shall, at its sole cost and expense, obtain, maintain, or cause to be maintained, and provide, throughout the term of this Franchise, insurance in the amounts, types and coverages in accordance with the following requirements. Such insurance may be in the form of self-insurance to the extent permitted by applicable law or by obtaining insurance, as follows: A. Commercial general or excess liability on an occurrence or claims made form with minimum limits of five million dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) aggregate. This coverage shall include the following: (1) Products/completed operations to be maintained for a warranty period of 2 years, (2) Personal and advertising injury, (3) Contractual liability, and (4) Explosion, collapse, or underground (XCU) hazards. Be Automobile liability coverage with a minimum policy limit of one million dollars ($1,000,000) combined single limit each accident. This coverage shall include all owned, hired, and non - owned automobiles. C. Workers compensation and employers liability coverage. Statutory workers compensation benefits in accordance with the statutes and regulations of the State of Texas. Company must provide the City with a waiver of subrogation for workers compensation claims. D. Any contractors or subcontractors working in the Public Right -of --Way on behalf of Company are agents of Company. Company shall remain the responsible party for damage to and/or in the Public Right -of -Way resulting from any work of Company or its agents. City shall submit claims for any such damage to the Public Right -of -Way to Company. Upon request, Company shall provide the City with proof of insurance for any of Company's contractors or sub -contractors that perform work in the Public Right -of --Way. E. The Company will provide proof of insurance in accordance with this Franchise within thirty (30) days of the effective date of the Franchise. Company will not be required to furnish separate proof when applying for permits. SECTION 5. EXTENSIONS FOR CUSTOMERS. Company shall, at its expense, extend distribution mains in any street up to one hundred (100) feet for any one residential or commercial customer so long as the customer at a minimum uses gas for unsupplemented space heating and water heating. Company shall not be required to extend transmission mains in any Public Right -of --Way within City or to make a tap on any transmission main within City unless Company agrees to such extension by a written agreement between Company and a customer. SECTION 6. PROVISION OF GAS SERVICE. Company shall provide gas service to any Person having a service location within the City in accordance with Company's tariff and service rules and regulations. SECTION 7. CUSTOMER SERVICE STANDARDS• LOCAL PAYMENT LOCATION. A. Company shall maintain a local, toll -free or collect call telephone access line which will be available to its customers 24 hours a day, seven days a week. B. Company shall make a good faith effort to maintain within City one or more locations where customers can pay their bills. In no circumstance shall the absence of such a location be considered a violation of a material provision of this Franchise as outlined in Section 13. C. Company shall at all times furnish gas service in accordance with Company's tariff and service rules and regulations, and any Railroad Commission of Texas "Quality of Service" rules applicable to the Company's provision of gas service within the City. D. Company shall provide City with at least thirty (30) days advance written notice of any changes in rates, charges or certificated service area and deregulation, where such changes apply to any area covered by this Franchise. SECTION 8. RATES. Company's rates and charges shall be established and shall be subject to revision and change in accordance with all applicable statutes and ordinances. Company shall maintain on file with City copies of its current tariffs, schedules or rates and charges, customer service provisions, and line extension policies. SECTION 9. INDEMNITY. A. In consideration of the granting of this Franchise, Company agrees to indemnify, defend, and hold harmless City, its officers, agents, employees (City and such other persons and entities being Page 10 collectively referred to herein as "Indemnitees"), from and against all damages (including but not limited to attorney fees and related expenses and expert witness fees and related expenses), suits, actions or claims of injury to any person or persons, or damages to any property brought or made for or on account of any death, injuries to, or damages received or sustained by any person or persons or for damage to or loss of property to the extent caused by Company's intentional and/or negligent acts or omissions in connection with Company's operations; except that the indemnity provided for in this paragraph shall not apply to the extent any liability is determined to have resulted from negligence or intentional acts or omissions of City, its officers, agents, and employees. In the event of joint and concurrent negligence or fault of both Company and City, responsibility and indemnity, if any, shall be apportioned comparatively in accordance with the laws of the State of Texas without, however, waiving any of the defenses of the parties under Texas law. Further, in the event of joint and concurrent negligence or fault of both Company and City, responsibility for all costs of defense shall be apportioned between City and Company based upon the comparative fault of each. B. In fulfilling its obligation to defend and indemnify City, Company shall have the right to select defense counsel. Company shall retain defense counsel within seven (7) business days of City's written notice that City is invoking its right to indemnification under this Franchise. If such written notice advises Company of the foregoing 7-business day period to retain defense counsel and Company fails to retain counsel within such time period, City shall have the right to retain defense counsel on its own behalf, and Company shall be liable for all defense costs (including but not limited to attorney fees and related expense and expert witness fees and related expenses) incurred by City, except as set out in Section 9.A. C. Company will require its self-insurance to respond to the same extent as if an insurance policy had been purchased naming the City as an additional insured, and any excess coverage purchased for the sole purpose of insuring Company's obligations pursuant to this agreement will name the City as an additional insured up to the amounts required by City's ordinance. D. The obligations set forth in this Section 9 shall survive the termination of this Franchise. SECTION 10. NON-EXCLUSIVE FRANCHISE. The rights, privileges, and franchises granted by this ordinance are not to be considered exclusive, and City hereby expressly reserves the right to grant, at any time, like privileges, rights, and franchises as it may see fit to any other person or corporation for the purpose of transporting, delivering, distributing, or selling gas to and for City and the inhabitants thereof SECTION 11. FRANCHISE FEE• PAYMENTS TO CITY. A. In consideration of the privilege granted by the City to Company to use and occupy the Public Right -of -Way in the City for the purposes stated herein, Company and its successors and assigns agree to deliver and pay to City, and City agrees to accept, a Franchise Fee in an amount equivalent to five Page 11 percent (5%) of the Company's Gross Revenues as defined in Section 2.g. The initial payment shall be paid to the City by Company on or before the "Due Date" for the "Quarter", as set forth below, in which the effective date of this Ordinance occurs, and shall include Gross Revenues received by Company from the effective date of this Ordinance. Thereafter the Company shall pay the Franchise Fee quarterly as follows: Due Date uarter May 15 First (January 1 -March 31) August 15 Second (April 1 -June 30) November 15 Third (July 1 -September 30) February 15 Fourth (October 1 -December 31) B. Each payment due during the term of this Ordinance will be made on or before the close of business on the payment due date. If any payment due date required by this Ordinance falls on a weekend or declared bank holiday, payment shall be made by the close of business on the next business day. C. It is also expressly agreed that the aforesaid payments shall be in lieu of any and all other and additional occupation taxes, easement, franchise taxes or charges (whether levied as an ad valorem, special, or other character of tax or charge), municipal license, permit, and inspection fees, bonds, street taxes, and street or alley rentals or charges, and all other and additional municipal taxes, charges, levies, fees, and rentals of whatsoever kind and character that City may now impose or hereafter levy and collect from Company or Company's agents, excepting only the usual general or special ad valorem taxes that City is authorized to levy and impose upon real and personal property. Except however, Company's separate obligations to reimburse the City for City's reasonable rate case expenses and for street and other repairs in accordance with City's ordinances, are not affected by Company's payment of Franchise Fees hereunder. If the City does not have the legal power to agree that the payment of the foregoing sums of money shall be in lieu of occupation 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 Company's obligations, if any, to pay any such occupation taxes, licenses, charges, fees, or rentals. D. If Company fails to pay when due any payment provided for in this section, Company shall pay such amount plus interest consistent with the rate for customer deposits under Texas Utilities Code Section 183.003 from such due date until payment is received by City. E. Company Franchise Fee Recovery Tariff (1) Company may file with the City a tariff or tariff amendments) to provide for the Page 12 recovery of the Franchise Fees under this agreement. (2) City agrees that (i) as regulatory authority, it will adopt and approve the ordinance, rates, or tariff which provide for 100% recovery of such Franchise Fees as part of Company's rates; (ii) if the City intervenes in any regulatory proceeding before a federal or state agency in which the recovery of Company's Franchise Fees is an issue, the City will take an affirmative position supporting 100% recovery of such Franchise Fees by Company and; (iii) in the event of an appeal of any such regulatory proceeding in which the City has intervened, the City will take an affirmative position in any such appeals in support of the 100% recovery of such Franchise Fees by Company; and (iv) it will take no action, nor cause any other person or entity to take any action, to prohibit the recovery of such Franchise Fees by Company. F. This Franchise is granted solely to Company. Company is not authorized to license or lease to any person or entity the right to occupy and use any Public Right -of -Way for any private business or other purpose. Transportation service provided by Company to or for others shall not be considered a licensing or leasing of any right to occupy and use any Public Right -of --Way. G. Upon receipt of written notice from the City that the City has annexed or disannexed any area, including a map showing the area annexed or disannexed, Company shall promptly initiate a process to reclassify affected customers into the City limits no later than sixty (60) days after receipt of notice from City. In no event shall the Company be required to add premises for the purposes of calculating franchise payment prior to the earliest date that the same premises are added for purposes of collecting sales tax. Upon request from City, Company will provide documentation to verify that affected customers were appropriately reclassified and included for purposes of calculating Franchise Fees. SECTION 12. BOOKS AND RECORDS. A. Company agrees that on the same date that payments are made, as provided in Section 11, it will file with the City Secretary a sworn report showing the Gross Revenues, as defined herein, received by Company from the sale of gas to its residential, commercial, and industrial customers and from the transportation of gas within the City during the calendar quarter preceding the date of payment. Such report shall also include the total cost of gas transported by Company for customers based on the information as disclosed by such customers to Company during the calendar quarter preceding the date of payment or on the index price, if applicable. B. City may, if it sees fit, upon reasonable notice to the Company, have the books and records of Company examined by an auditor designated by City to ascertain the correctness of the reports agreed to be filed herein. Company shall make available, during normal working hours and upon reasonable notice, such personnel and records as the auditor may in its reasonable discretion request in order to complete such Page 13 audit and shall make no charge to the City therefor. Company shall assist City in its review by providing all requested information no later than fifteen business (15) days after receipt of a request. The cost of the audit shall be borne by City unless the audit discloses that the Company has underpaid the Franchise Fee by 5% or more, in which case the reasonable costs of the audit shall be immediately reimbursed to the City by the Company. If such an examination reveals that Company has underpaid City, then upon receipt of written notification from City regarding the existence of such underpayment, Company shall undertake a review of City's claim and if said underpayment is confirmed, remit the amount of underpayment to City, including any interest calculated in accordance with Section 11.D. Should Company determine through examination of its books and records that City has been overpaid, upon receipt of written notification from Company regarding the existence of such overpayment, City shall review Company's claim and if said overpayment is confirmed, remit the amount of overpayment to Company including any interest calculated in accordance with Section 11.D. C. If the Company provides confidential or proprietary information to the City or its auditor, the Company shall be solely responsible for identifying such information with markings calculated to bring the City's attention to the proprietary or confidential nature of the information. The City agrees to maintain the confidentiality of any non-public information obtained from Company so designated to the extent allowed by law. City shall not be liable to Company for the release of any information the City is required to release by law. If the City receives a request under the Texas Public Information Act that includes Company's proprietary or confidential information, City will notify the Texas Attorney General of the proprietary or confidential nature of the document(s). The City also will provide Company with a copy of this notification, and thereafter Company is responsible for establishing that an exception under the Texas Public Information Act allows the City to withhold the information. SECTION 13. TERMINATION. A. Right to Terminate. In addition to any rights set out elsewhere in this Ordinance, City reserves the right to terminate the Franchise and all rights and privileges pertaining thereto, in the event that Company violates any material provision of the Franchise and fails to cure such violation within any applicable cure period. B. Procedures for Termination. (1) Subject to the further provisions of this Section 13 (BZ(1), City may, at any time, terminate this Franchise for a continuing material violation by Company of any of the substantial terms hereof. In such event, City shall give to Company written notice, specifying all grounds on which termination or forfeiture is claimed, by registered mail, addressed and delivered to Company at the address set forth in Section 14.A. hereof. Company shall have sixty (60) days after the receipt of such notice within which to cease such violation and comply with Lite terms and provisions hereof. In the event Company fails to cease such violation or otherwise comply with the terms hereof, then Company's Franchise is subject to termination under the following provisions. Provided, however, that if Company commences work or other efforts to cure such violations within thirty (30) days after receipt of written notice and shall thereafter prosecute such curative work with reasonable diligence until such curative work is completed, then such violations shall cease to exist, and the Franchise will not be terminated. Notwithstanding the foregoing or any other provision of this Franchise, if a violation of this Franchise can be cured by the Company's immediate payment of money to City or a third party, Company shall have a maximum of thirty (30) days to cure. (2) Termination shall be declared only by written decision of the City Council after an appropriate public proceeding whereby Company is afforded the full opportunity to be heard and to respond to any such notice of violation or failure to comply. Company shall be provided at least fifteen (15) business days prior written notice of any public hearing concerning the termination of the Franchise. In addition, ten (10) days' notice by publication shall be given of the date, time and place of any public hearing to interested members of the public. (3) City, after full public hearing, and upon finding material violation or failure to comply, may terminate the Franchise or excuse the violation or failure to comply, upon a showing by Company of mitigating circumstances or upon a showing of good cause of said violation or failure to comply as may be determined by the City Council. (1) Nothing herein stated shall preclude Company from appealing the final decision of the City Council to a court or regulatory authority having jurisdiction. (5) Nothing herein stated shall prevent City from seeking to compel compliance with the terms of this Franchise by suit in any court of competent jurisdiction if Company fails to comply with the terms of this Franchise after due notice and the providing of adequate time for Company to comply with said terms. SECTION 14. NOTICES. A. Any notices required or desired to be given from one party to the other party to this Ordinance shall be in writing and shall be deemed to have been served and received: (i) if delivered in person to the address set forth below with receipt signed by an agent of recipient; (ii) three (3) business days after deposited in an official depository under the regular care and custody of the United States Postal Service located within the confines of the United States of America and sent by certified mail, return receipt requested, and addressed to such party at the address hereinafter specified; or (iii) upon receipt if delivered Page 15 to such party by courier receipted delivery. Either party may designate another address within the confines of the continental United States of America for notice, but until written notice of such change is actually received by the other party, the last address of such party designated for notice shall remain such party's address for notice. CITY City Manager City of Anna 111 N. Powell Parkway Anna, Texas 75409 With copies to: Wolfe, Tidwell & McCoy, LLP Attn: Clark McCoy 2591 Dallas Parkway, Suite 300 Frisco, Texas 75034 COMPANY Universal Natural Gas, LLC 9750 FM 1488 Road Magnolia, Texas 77354 Attn: President B. The Company shall provide to the City a local or toll -free telephone number that is married twenty-four (24) hours a day, seven (7) days a week to provide available information relating to emergency situations. The City understands that this telephone number is not equipped to handle calls from the public, and the City will not provide this number to customers, but will direct them to the Company's Call Center. If the Company cannot timely respond to an emergency with Company employees, the Company will attempt to respond to the emergency with qualified local contractors. The Company's contact information shall be kept current at all times. The Company and the City shall, upon request by either party, meet to discuss and address emergency response issues, in order to rectify any problems identified by either party. SECTION 15, SUCCESSORS AND ASSIGNS. The Company may, without consent by City, transfer or assign the rights granted by this Franchise to an Affiliate. Company shall give prior written notice to City of such intended transfer or assignment and shall provide in such notice identifying information of the Affiliate, including contact information for routine and emergency matters. City will otherwise have the right to approve the transfer or assignment of this Franchise to a non -Affiliate. City shall grant approval unless the assignee is materially weaker than the Company. For the purpose of this section, "materially weaker" means that the long term unsecured debt rating of the assignee is less than investment grade as rated by both S&P and Moody's. The City may request additional documents and information reasonably related to the transaction and to the legal, financial, and technical qualifications of the assignee. City agrees that approval of a transfer or assignment Page 16 to a non -Affiliate that is materially weaker shall not be unreasonably withheld or delayed. The terms and conditions contained in this Ordinance shall be binding upon Company, its successors, and assigns. Upon request by City, Company shall require its successor, transferee, or assignee to provide City with a written express assumption of all rights and obligations under this Franchise. SECTION 16. RENEGOTIATION. If either City or Company requests renegotiation of any term of this Ordinance, Company and City agree to renegotiate in good faith revisions to any and all terms of this Ordinance. If the parties cannot come to agreement upon any provisions being renegotiated, then the existing provisions of this Ordinance will continue in effect for the remaining term of the Franchise. SECTION 17, NO WAIVER. Either City or Company shall have the right to waive any requirement contained in this Ordinance, which is intended for the waiving parry's benefit, but, except as otherwise provided herein, such waiver shall be effective only if in writing executed by the party for whose benefit such requirement is intended. No waiver of any breach or violation of any term of this Ordinance shall be deemed or construed to constitute a waiver of any other breach or violation, whether concurrent or subsequent, and whether of the same or a different type of breach or violation. SECTION 18, SEVERABILITY• GOVERNING LAW This Ordinance and every provision hereof, shall be considered severable, and the invalidity or unconstitutionality of any section, clause, provision, or portion of this Ordinance shall not affect the validity or constitutionality of any other portion of this Ordinance. If any term or provision of this Ordinance is held to be illegal, invalid, or unenforceable, the legality, validity, or unenforceability of the remaining terms or provisions of this Ordinance shall not be affected thereby. This Ordinance shall be governed and construed in accordance with the laws of the State of Texas, without giving effect to any conflicts of law rule or principle that might result in the application of the laws of another jurisdiction. This Ordinance is performable in Collin County, Texas, and exclusive venue for any action concerning this Ordinance, the transactions contemplated hereby or the liabilities or obligations imposed hereunder shall be in the State District Court of Collin County, Texas. SECTION 19. ACCEPTANCE OF FRANCHISE. City shall provide Company with a certified copy of this Franchise by certified mail within five (5) business days of passage. In order to accept this Franchise, Company must file with the City Secretary its written acceptance of this Franchise Ordinance within thirty (30) days after- its final passage and approval by City in substantially the same form as set forth in this Section 19 in the italicized text below or in another form acceptable to the Town: Page 17 [DATE] City ofAnna, Texas 111 N. Powell Parlm�ay Anna, Texas 75409 Attention: City Manager RE.• Universal Natural Gas, LLC; Ordinance No. This writing certifies that Universal Natural Gas, LLC, accepts and agrees to be contractually bound by the terms and conditions of Ordinance No. a copy of which is attached hereto as Exhibit A. Univer°sal Natural Gas, LLC By.• Centric Gas Sen�ices, LLC, its sole member By: Robert S. Barnwell, IV, its President and Chief Operating Off cer If such written acceptance of this Franchise Ordinance is not timely filed by Company, the Franchise Ordinance shall be rendered null and void. SECTION 20. PARAGRAPH HEADINGS. CONSTRUCTION. The paragraph headings contained in this Ordinance are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs hereof. Both parties have participated in the preparation of this Ordinance and this Ordinance shall not be construed either more or less strongly against or for either party. SECTION 21. ANTI -BOYCOTT VERIFICATION. A. The Company hereby verifies that it and its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent this Franchise is a contract foI goods or services, will not boycott Israel during the term of this Franchise. The foregoing verification is made solely to comply with Section 2271.002, Texas Government Code, as amended or redesignated, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, `boycott Israel' means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli -controlled territory, but does not include an action made for ordinary business purposes. The Company understands `affiliate' Page 18 to mean an entity that controls, is conholled by, or is under common conhol with the Company and exists to make a profit. B. The Company represents that neither it nor its parent company, wholly- or majority - owned subsidiariesI or other affiliates, if any, is a company idened on a list prepared and maintained by the Texas Cornpt►oller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Govermnent Code, and posted on any of the following pages of such officer's Internet website: https://comptroller.texas. gov/purchasing/docs/sudan-list.pdf, l�t!ps://comptroller.texas.eoy/purchasinp,/docs/iran-Iist.pdf, or https://comptroller.texas. ov/purchasing/docs/fto-list.pdf. The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable Federal law and excludes the Company and each of its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. The Company understands "affiliate" to mean any entity that controls, is controlled by, or is under common control with the Company and exists to make a profit. SECTION 22. EFFECTIVE DATE. Upon and subject to Company's written acceptance of this Ordinance, this Ordinance shall become effective as of the first day of the calendar month that is not less than sixty (60) days after the final passage of this Ordinance by the City, and as of such effective date shall supersede and replace any previous franchise agreement between City and Company. DULY PASSED by the City Council of the City of Anna, Texas, this the �ilday of�,�, 2021. ATTEST: Carrie L. Land, City S APPROVED AS TO FORM: •• Clark McCoy, City Attorney Page 19 STATE OF TEXAS § COUNTY OF COLLIN § CITY OF ANNA § I, Carrie L. Land, City Secretary of the City of Anna, Collin County, Texas, do hereby certify that the above and foregoing is a true and correct copy of an ordinance passed by the City Council of the City of Anna, Texas, at a duly noticed meeting, held on the /k day of q/ _, 2021. WITNESS MY HAND AND SEAL OF SAID CITY, this the Nay of , 2021. CaiTie L. Land, City Secretary City of Anna, Texas Page 20