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GAS (9) ~y~ lf1~ City of Safety Harbor 750 Main Street Safety Harbor, Fl3469S KEN BURKE, CLERK OF COURT PINELLAS COUNTY FLORIDA INST# 2005204848 OS/26/2005 at 03'46 PM OFF REC BK: 14341 PG: 357-386 . DocType:GOV RECORDING: $256.50 ORDINANCE NO. 200S-08 ~.~---~---------,---- AN ORDINANCE OF THE CITY OF SAFETY HARBOR, FLORIDA, A FLORIDA MUNICIPAL CORPORATION (HEREINAFTER "SAFETY HARBOR") GRANTING TO THE CITY OF CLEARWATER, FLORIDA, ITS LEGAL REPRESENTATIVES, SUCCESSOR AND ASSIGNS, (HEREINAFTER "CLEARWATER"), A NON- EXCLUSIVE GAS FRANCHISE RELATING TO THE OCCUPANCY OF RIGHTS-OF-WAY IN THE CITY OF SAFETY HARBOR FOR THE PURPOSE OF PROVIDING GAS SERVICES, AND IMPOSING CERTAIN CONDITIONS RELATING THERETO: PROVIDING FOR REPEAL OF ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, it is in the best interests of the citizens of SAFETY HARBOR to be provided gas service whenever and wherever feasible; and, WHEREAS, pursuant to Chapters 166 and 180, Florida Statutes, CLEARWATER has the power and the present capability to provide such gas services in SAFETY HARBOR; and WHEREAS, SAFETY HARBOR and CLEARWATER wish to set forth the grants and conditions with respect to the provisions of such gas service to those areas within the corporate limits of SAFETY HARBOR and SAFETY HARBOR desires by virtue hereof to grant a franchise to CLEARWATER. SECTION 1. PURPOSE. The parties acknowledge that CLEARWATER has the legal authority pursuant to Florida Statutes to provide gas service and, further, that SAFETY HARBOR, upon appropriate exercise of its powers could also provide such service. SAFETY HARBOR and CLEARWATER have determined it is in the best interests of both parties and Ord. No. 2005-08 Page 1 of 29 ~y~ ~~ City of Safety Harbor 7S0 Main Street Sarety Harbor, A. 3469S their citizens for CLEARWATER to provide gas service within the corporate limits of SAFETY HARBOR as defined herein. SECTION 2. INTERPRETATION OF RECITALS. The recitals and findings contained above are hereby incorporated herein. SECTION 3. TERM; GRANT; ASSOCIATED OPTION TO PURCHASE GRANTEE'S GAS FACILITIES; NON-EXCLUSIVE FRANCHISE; DEFINITION OF GAS. Except as otherwise provided herein, for a period of thirty (30) years from the effective date of this agreement, SAFETY HARBOR, its successors and assigns, do hereby agree and give and grant to CLEARWATER, its successors and assigns, any necessary right and authority to exercise the power to furnish gas and to construct, operate and maintain within the corporate limits of SAFETY HARBOR, all facilities required by CLEARWATER to supply gas to SAFETY HARBOR, its inhabitants and the places of business located within SAFETY HARBOR'S corporate limits and other customers and areas now or hereafter supplied, or to be supplied, gas by CLEARWATER. At the end of such thirty (30) year term, as provided below, SAFETY HARBOR shall have the right to purchase CLEARWATER'S facilities located within SAFETY HARBOR'S municipal boundaries, except lines and facilities used to provide service to other communities, and associated facilities, as provided in this Section. Any exercise by SAFETY HARBOR of the purchase rights under this section shall require SAFETY HARBOR to purchase all facilities subject to purchase and not a portion thereof. THE PARTIES MUTUALLY DECLARE AND ACKNOWLEDGE THAT THE Ord. No. 2005-08 Page 2 of 29 3D-YEAR TERM OF THIS FRANCHISE AND SAFETY HARBOR'S RIGHT TO PURCHASE ARE INEXTRICABLY LINKED, AND THAT CLEARWATER WOULD NOT HAVE AGREED TO GRANT THE RIGHT TO PURCHASE HEREIN BUT FOR THE FACT THAT THIS FRANCHISE PROVIDES FOR A 3D-YEAR TERM. THE PROVISIONS OF THIS SECTION ARE NOT SEVERABLE FROM EACH OTHER. SAFETY HARBOR must give notice of its desire to invoke this section no later than two (2) calendar years prior to the expiration of this franchise and no earlier than three (3) months prior to that date. If SAFETY HARBOR does not give such timely notice, SAFETY HARBOR'S right to purchase shall expire and be of no further force and effect. If such notice is timely given, the parties shall first meet and attempt to negotiate an agreed value for such facilities. If the parties do not agree on a value within ninety (90) days after the date of the notice by SAFETY HARBOR, either party may demand that the value be established in arbitration pursuant to the Florida Arbitration Code, presently Chapter 682, Florida Statutes, or such other similar law as may exist at the time of arbitration. Arbitration shall occur within 180 days after the demand therefor. The parties shall use their best efforts to comply with all of the time limits established in this Section. The arbitration shall be conducted before three (3) arbitrators mutually agreed to by the parties. Unless otherwise then agreed by the parties, each arbitrator shall be chosen from an American Arbitration Association panel having specialized experience in the gas energy business. If such a specialized panel does not exist, then each arbitrator shall be chosen from lists of individuals ~.:Y"de provided by the American Arbitration Association. If the parties cannot agree on ~~ City of Safety Harbor 7S0 Main Street SafutyHarbor,FL34695 Ord. No. 2005-08 Page 3 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 three arbitrators, but have agreed on two, the two arbitrators shall mutually select the third arbitrator from the above AAA panel. If the parties cannot agree on at least two arbitrators, or if the two arbitrators cannot agree on a third arbitrator, either party may apply to a court of competent jurisdiction to appoint the arbitrator(s) necessary to constitute the three-arbitrator panel. Each party may suggest candidate arbitrators to the Court. Absent the parties' agreement, the Court may not appoint an arbitrator who is a resident or employee of or contractor to either party hereto or who is an owner or manager of a business located within either city. The Court shall appoint any such arbitrator(s) from the above AAA panel or American Arbitration Association provided listings of individuals. The Arbitrators shall issue their decision within thirty (30) days of the conclusion of the arbitration hearing. The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association (AAA), or such similar rules of the AAA as may exist at the time of arbitration. The parties may mutually modify or waive any such AAA rules at any time and substitute additional or new rules of procedure. The parties shall not be required to utilize the services of the AAA, even though the arbitrators are selected from an AAA panel. The arbitration submission shall be limited to: (a) establishing the value of the facilities subject to purchase; (b) establishing a method for adjusting that value of post-arbitration changes to the facilities. The value shall be determined as follows: reproduction cost new, less depreciation, plus going concern value, plus any costs and damages incurred by the separation of the system within SAFETY Ord. No. 2005-08 Page 4 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 HARBOR'S boundaries from the remainder of CLEARWATER'S system, as well as the costs incurred by CLEARWATER in reintegrating such remaining system, as CLEARWATER is entitled pursuant to applicable law. SAFETY HARBOR does not waive any rights and claims it may have that CLEARWATER is not entitled to any such cost and damages incurred by separation of the system. The arbitrators may consider and apply, without limitation, the comparable sales approach and the income approach to valuation, and the value may include a value for CLEARWATER'S system subject to purchase that takes into account the value of the future stream of income that may be generated by that system. The award shall establish a methodology consistent with the above methodology for increasing the amount of the award for additional improvements or additions made to the system that are necessary to maintain the existing level of service and that are made between the date of the award and the date of any actual purchase pursuant to these provisions. (In the event of damage or destruction of any portion of the system due to hurricanes, storms, or other natural disasters, or events beyond CLEARWATER'S control between the date of the arbitration and the date of any actual purchase of the system by SAFETY HARBOR, the value shall be adjusted, by further arbitration if necessary, to include an amount necessary to fully compensate CLEARWATER for the cost of the facilities destroyed or rendered not useable, using the methodology set forth above, as well as the cost of all repairs and replacement facilities incurred by CLEARWATER prior to SAFETY HARBOR actually taking possession of the system, and that are necessary to maintain the existing level of service. Ord. No. 2005-08 Page 5 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 In arriving at the value of the facilities in arbitration, neither the purchase option set out in this section nor any purchase option in any prior franchise between SAFETY HARBOR and CLEARWATER shall be considered in diminution of the value. The award shall identify the amounts awarded as to each category of the methodology set out hereinabove. Each party shall bear its own attorney's fees and costs. The parties acknowledge that SAFETY HARBOR may elect to amend its Charter during the term of this franchise to delete any existing Charter requirements that this franchise include a right to purchase CLEARWATER'S gas distribution system within SAFETY HARBOR'S limits. If SAFETY HARBOR so amends its Charter during the life of this franchise, then, SAFETY HARBOR, shall notify CLEARWATER in writing that the purchase option in this section shall be of no further force and effect and the term of this franchise shall be reduced to ten (10) years. Such new term shall automatically take effect upon SAFETY HARBOR giving CLEARWATER such notice and shall run retroactively from the effective date of this franchise. Provided, however, if SAFETY HARBOR amends its Charter as set forth above after the ninth anniversary of this franchise, the franchise (as automatically amended to delete the buyout provision of this section) shall continue for one year from the date of SAFETY HARBOR'S written notice. If CLEARWATER continues to operate all or any part of the system after the term of this Agreement, then CLEARWATER shall continue to comply with all applicable provisions of this Agreement, including, without limitation, all compensation and other payment provisions throughout the period of such Ord. No. 2005-08 Page 6 of 29 ontinued operation, provided that any such continued operation shall in no way be onstrued as a renewal or other extension of the Franchise Agreement. The word "Gas" shall mean natural gas and/or commingled gas which is distributed in pipes. It shall not mean bottled gas or any other fuel; however, nothing herein shall be interpreted to prohibit CLEARWATER from engaging in the sale of liquid petroleum (propane) gas, provided, however, in the event CLEARWATER seeks to utilize SAFETY HARBOR'S rights-of-way by installing propane lines, propane tanks, or any other facilities associated with CLEARWATER'S provision of propane services, an amendment to this franchise ordinance or a new franchise ordinance authorizing propane service shall be required. The term "Rights-of-Way" means all of the publiC streets, alleys, highways, waterways, bridges, easements, sidewalks and parkS owned by the City, as they now exist or may be hereafter constructed, opened, laid out or extended within the present limits of the City, or in such territory as may hereafter be added to, consolidated or annexed to the City. Nothing in this Franchise Agreement shall prevent SAFETY HARBOR from levying and collecting taxes as SAFETY HARBOR may, from time-to-time, be empowered by law to levy and collect, provided such taxes shall be applied uniformly to all persons or entities within SAFETY HARBOR'S corporate limits and shall not constitute or be construed as an additional tax or fee for CLEARWATER'S use of the Rights-of-way. As a fee agreed to be paid during the term of this Franchise Agreement, the franchise fee set forth in this Franchise Agreement is not ~/d& a tax. ~~ City of Safety Harbor 750 Main Street SafetyHarbor,R.34695 Ord. No. 2005-08 Page 7 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 The right to use and occupy Rights-of-Way for the purposes herein set forth shall be non-exclusive, and SAFETY HARBOR reserves the right to grant a similar use of said Rights-of-Way, to any person at any time during the period of this Franchise Agreement so long as such grant does not materially and adversely impact CLEARWATER'S right to use and occupy Rights-of-Way as aforesaid. In the event SAFETY HARBOR acquires all or substantially all of the facilities of CLEARWATER located in the Rights-of-Way of SAFETY HARBOR, then the rights granted under this Franchise shall terminate and be of no further force or effect. Nothing in this section or in this Franchise is intended to derogate any condemnation rights SAFETY HARBOR may have under existing law, nor shall this section or this Franchise be construed as an acknowledgment by CLEARWATER that SAFETY HARBOR has any legal right to condemn or otherwise acquire CLEARWATER'S facilities without CLEARWATER'S consent. No such consent is given by any provision of this Franchise. Nothing in this Section is intended to affect the amount payable by SAFETY HARBOR to CLEARWATER in the event of such condemnation or other acquisition. SECTION 4. RATES. The rates, charges and fees to be charged by CLEARWATER for Gas service within the corporate limits of SAFETY HARBOR during the term of this agreement shall be as provided in CLEARWATER'S standard, system-wide rate schedule now or hereafter approved by CLEARWATER'S City Commission, or as modified by the CLEARWATER Manager, or other designated CLEARWATER official, to the extent CLEARWATER Manager, or other designated CLEARWATER official, is expressly Ord. No. 2005-08 Page 8 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 authorized to approve changes to such rates, charges, and fees, or such other agency of the State of Florida as may have proper jurisdiction over such rates and charges of CLEARWATER under the general laws of the State of Florida, or CLEARWATER'S charter and ordinances. Such rate schedule shall be no greater than the rate schedule applied to rate payers within the corporate limits of CLEARWATER. SECTION 5. ANNEXATION. In the event of the annexation of any territory to the present corporate limits of SAFETY HARBOR, such annexed territory and all portions of the Gas system of CLEARWATER located therein shall become subject to all of the terms and conditions of this agreement as of the time such annexation becomes effective. It shall be the responsibility of SAFETY HARBOR to notify CLEARWATER in writing by certified mail, return receipt requested, within thirty (30) days after the effective date of every such annexation. After notification by SAFETY HARBOR, CLEARWATER shall prospectively implement such franchise billing for such annexation within thirty (30) days of the receipt of the notice from SAFETY HARBOR. CLEARWATER shall reimburse SAFETY HARBOR for the costs of mailing these notices by certified mail. SECTION 6. EXTENSION OF SERVICE. In consideration of the rights granted under this franchise and the duration of this franchise, CLEARWATER agrees that its facilities to be installed within the corporate limits of SAFETY HARBOR will be expanded to provide service to new customers on the terms and conditions hereinafter set forth. Gas service shall be Ord. No. 2005-08 Page 9 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 extended to customers desiring said service based on a feasi~formtJla. Such formula shall be the formula currently in effect system-wide as then administered by CLEARWATER. Upon request, CLEARWATER shall provide copies of applicable policies and regulations to SAFETY HARBOR. CLEARWATER covenants and agrees that CLEARWATER will not arbitrarily or unreasonably refuse to make extensions when requested to do so by SAFETY HARBOR. SECTION 7. FORCE MAJEURE. In the event by act of God, strike, riot, public enemy or other calamity, or restriction in the supply of Gas beyond the control of CLEARWATER or its interstate supplier or by reason of regulation exerted by the Florida Public Service Commission or the Federal Energy Regulatory Commission or other regulatory body having jurisdiction in the premises, the supply of the Gas should be interrupted, CLEARWATER shall, nevertheless, continue to supply the available Gas to such customers as it is possible, shall employ its full services to remedy such deficiency of Gas supply, and shall resume complete Gas service when that is possible. SECTION 8. COMPETITION. As a further consideration of this franchise granted hereunder, SAFETY HARBOR agrees not to engage in the business of distributing and selling Gas during the life of this agreement or any extension thereof in competition with CLEARWATER, its successors and assigns, in the service territory within SAFETY HARBOR delineated by the Florida Public Service Commission as CLEARWATER'S Ord. No. 2005-08 Page 10 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 service territory by PSC Order #00-0371-PAA-GU. CLEARWATER'S service territory is shown on Exhibit "A" attached hereto and incorporated herein. Pursuant to Sections 6 and 12 hereof, CLEARWATER and SAFETY HARBOR have agreed to a certain extension of service policy. In the event SAFETY HARBOR desires to provide Gas service where CLEARWATER has notified SAFETY HARBOR in writing said areas do not qualify under the feasibility formula, SAFETY HARBOR may provide CLEARWATER notice of its intent to provide such Gas service in said areas. CLEARWATER shall have sixty (60) days after receipt of said notice to review its decision not to provide Gas service to said areas and to further meet with SAFETY HARBOR regarding said service. In the event CLEARWATER has not delivered written notice to SAFETY HARBOR within this sixty (60) day period that CLEARWATER shall provide Gas service to said areas, SAFETY HARBOR solely at its option may provide Gas service in said defined areas thereafter. SECTION 9. TERMINATION OF AGREEMENT. In the event of any termination of this Agreement, whether by expiration (where CLEARWATER does not seek renewal or where renewal is legally denied), revocation or otherwise, CLEARWATER, will operate the system pursuant to the provisions of this Agreement for that period of time necessary to assure CLEARWATER'S Gas customers within the Franchise Area will have continuity of service. In any event, unless the system within SAFETY HARBOR'S municipal boundaries is purchased by SAFETY HARBOR or a third party, the purchase by a third party being subject to the assignment provisions of Section 18, CLEARWATER Ord. No. 2005-08 Page 11 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 shall have the right, privilege and option of removing all or any part of the system from all Rights-of-Way and other public or non-public property within the Franchise Area. Alternatively, SAFETY HARBOR may issue a removal order directing CLEARWATER to remove, at CLEARWATER'S sole cost and expense, all or any portion of the system from all Rights-of-Way and other public or non-public property within the Franchise Area. In either event, such removal shall be subject to the following: a. From the date CLEARWATER'S Gas customers actually receive Gas service from SAFETY HARBOR or a third-party provider, CLEARWATER shall have twelve (12) months to remove or abandon all or part of the system facilities. b. In removing the system, or any part thereof, CLEARWATER shall, at its own expense, refill and compact any excavation it makes and shall leave the Rights-of-Way and other property, in as good condition as that prevailing prior to CLEARWATER'S removal of the system. c. The liability insurance and indemnity provisions of this Agreement shall remain in full force and effect during the period in which the system is being removed and the associated repairs to the Rights-of-Way and other property are being made; and d. If in the reasonable and good faith judgment of SAFETY HARBOR, CLEARWATER fails to substantially complete removal or abandonment, including repair of the Rights-of-Way and other property within twelve (12) months of SAFETY HARBOR'S issuance of a removal order, then SAFETY HARBOR shall have the right to (i) authorize removal and/or abandonment of the system at Ord. No. 2005-08 Page 12 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 CLEARWATER'S cost, said costs to be reasonable and actual, by another Person; (ii) declare that all rights, title and interest to the system belong to SAFETY HARBOR, including any portion of the system not designated for removal or abandonment, without compensation to CLEARWATER. CLEARWATER shall execute and deliver such documents as SAFETY HARBOR may request, to evidence such ownership by SAFETY HARBOR. Notwithstanding the foregoing, CLEARWATER may dispose of any portion of the system not designated by SAFETY HARBOR for removal during such twelve (12) month period, provided, however, that if CLEARWATER fails to complete the removal of the portion(s) of the system designated for removal by SAFETY HARBOR within such period, then all such portion(s) of the system not disposed by CLEARWATER during such period shall belong to SAFETY HARBOR with no price due to CLEARWATER. In the event of any acquisition, transfer or abandonment pursuant to this Section, CLEARWATER shall: a. Cooperate with SAFETY HARBOR in maintaining continuity in the distribution of services to customers of the system; b. Promptly execute all appropriate documents to transfer to SAFETY HARBOR title to the system, all components necessary to operate and maintain the system, and any rights, contracts, permits or understandings necessary to the distribution of services over the system. c. Promptly supply SAFETY HARBOR with all records necessary to reflect the change in ownership and to operate and maintain the system. d. Not object to any request by SAFETY HARBOR to connect to Ord. No. 2005-08 Page 13 of 29 transmission lines owned or operated by third parties. e. Negotiate with SAFETY HARBOR in good faith for the continued provision of services by CLEARWATER to areas of SAFETY HARBOR that cannot be economically or feasibly served by SAFETY HARBOR. f. Negotiate with SAFETY HARBOR in good faith an agreement allowing SAFETY HARBOR to purchase gas from CLEARWATER as a customer at such rates either theretofore established by CLEARWATER for other like purchasers, including but not limited to other governmental entities purchasing gas for resale or mutually agreeable by the parties. Any costs relating to actual connection, metering, and any other costs in order for SAFETY HARBOR to connect to CLEARWATER'S facilities shall be the responsibility of SAFETY HARBOR. SECTION 10. FRANCHISE FEE. In consideration for the granting of this franchise and the use of the rights- of-way, easements and other public places allowed hereunder, and effective the first day of the month after approval by SAFETY HARBOR of this agreement, SAFETY HARBOR shall be entitled to receive from CLEARWATER a franchise fee which will equal six percent (6%) of the gross receipts from the sale of Gas within the corporate limits of SAFETY HARBOR for the term of this franchise. Payment of the franchise fee by CLEARWATER to SAFETY HARBOR shall be made for each quarter no later than the forty-fifth (45th) day after the end of each quarter. In the event of failure to pay within the forty-five (45) day period, the interest to be due for such non-payment will be the interest rate provided by the "Florida Prompt ~/d& Payment Act." ~~ City of Safety Harbor 750 Main Street SafetyHarbor,R.34695 Ord. No. 2005-08 Page 14 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 In connection with any litigation arising out of the collection of delinquent amounts, the prevailing party shall be entitled to recover from the non-prevailing party, its court costs, legal expenses and reasonable attorney fees (including fees for paralegals) including any such costs, expenses or fees incurred in any and all appeals. CLEARWATER shall attach to each payment a statement of its Revenues by revenue account for the period on which such payment is based, signed by an authorized representative of CLEARWATER, sufficient to show the source and method of computation of Revenues. The acceptance of any statement or payment shall not estop SAFETY HARBOR fro asserting that the amount paid is not the amount due, or from recovering any deficit by any lawful proceeding, including interest to be applied at the rate set forth in this Agreement. Gross receipts, for purposes of computing such franchise fee, includes all revenues received by CLEARWATER, or any affiliated entity, from or in connection with the distribution of Gas in the City of SAFETY HARBOR and the transmission of Gas from and through the City of SAFETY HARBOR by parties other than Clearwater pursuant to the terms of this Franchise; provided, however, gross receipts shall not include monies for Gas service or a component thereof paid by customers to a third party, unaffiliated with CLEARWATER and where CLEARWATER receives no payment from the third party or the customer; provided, further, gross receipts shall not includes monies for Gas service to an industrial customer engaged in manufacturing or processing activities which create or change raw or unfinished materials into another form or product and who consumes the Gas in such activities, including but Ord. No. 2005-08 Page 15 of 29 ~/d& ~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 not limited to activities such as laundry and dry cleaning plants; cold storage plants; steam laundries; machine shops; rebuilders of airplanes and airplane engines; mines; fruit, meat and vegetable packing and precooling plants; quarries; railroad shops; water and sewer treatment plants; sewer lift stations; agricultural pumps; or any company whose Standard Industrial Code (SIC) is classified within the range of 0100-3999, as published by the Occupational Safety and Health Administration (OSHA). "Transmission of Gas" as used in this Section shall mean the transmission of natural gas and/or commingled gas through lines operating at a pressure of one hundred (100) pounds per square inch or above. SECTION 11. FAVORED NATIONS. In the event CLEARWATER shall hereafter accept a gas utility franchise ordinance from any municipality providing for the payment of a franchise fee in excess of that provided for hereinabove, CLEARWATER shall notify SAFETY HARBOR, and SAFETY HARBOR reserves the right to amend this franchise to increase the franchise fee payable under this ordinance to no more than the greater franchise fee that CLEARWATER has agreed to pay to such other municipality. CLEARWATER'S obligation to pay such greater franchise fee to SAFETY HARBOR shall apply prospectively beginning with the next monthly franchise fee payment following SAFETY HARBOR'S timely notice of its exercise of its amendment right. CLEARWATER'S failure to notify SAFETY HARBOR of such additional payments does not limit SAFETY HARBOR'S right to amend to require such additional franchise fees. However, in the event CLEARWATER does not provide timely notice as required by this paragraph, SAFETY HARBOR'S amendment right shall, if exercised, Ord. No. 2005-08 Page 16 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 relate back to the time at which SAFETY HARBOR could have first exercised that right hereunder if SAFETY HARBOR had been timely notified. SAFETY HARBOR shall notify CLEARWATER whether SAFETY HARBOR will exercise its amendment rights as to franchise fees terms on the date on which SAFETY HARBOR has actual knowledge of such other franchise terms. It is the intent and agreement of SAFETY HARBOR and CLEARWATER that CLEARWATER shall not be required to pay SAFETY HARBOR a franchise fee hereunder of a percentage greater than that paid to SAFETY HARBOR by any other gas utility utilizing SAFETY HARBOR'S rights-of-way on such gas utility's revenues attributable to services that are the same or substantially the same as those performed by CLEARWATER. It is further the intent and agreement of SAFETY HARBOR and CLEARWATER that CLEARWATER should not be placed at a competitive disadvantage by the payments required hereunder in the event gas utilities provide services in competition with CLEARWATER without utilizing SAFETY HARBOR'S rights-of-way as provided herein. The provisions of this section are further refined hereinbelow, which shall be read in harmony herewith. If SAFETY HARBOR imposes a lesser fee, or no fee, or is permitted by law to impose a fee on another gas utility that is utilizing the rights-of-way and providing or seeking to provide services in competition with CLEARWATER to customers within SAFETY HARBOR'S municipal boundaries and does not collect such a fee or collects a fee less than that provided herein, CLEARWATER'S fee for such services shall be automatically reduced to the lesser fee charged the other gas utility provider (or to zero, if no fee is charged such other gas utility provider). Although the above- Ord. No. 2005-08 Page 17 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 described reduction in franchise fees shall be automatic and self-executing, SAFETY HARBOR and CLEARWATER shall adjust the fee, if necessary, to assure that neither CLEARWATER nor such other gas utility shall be placed at a competitive disadvantage, provided, however, that the fee paid by CLEARWATER hereunder shall not exceed six percent (6%) unless the provisions of the first paragraph of this section are applicable. Where SAFETY HARBOR (1) is permitted by law to collect a fee from another gas utility that is not utilizing the rights-of-way but that is providing or seeking to provide services in competition with CLEARWATER to customers within SAFETY HARBOR'S municipal boundaries, and (2) does not collect such a fee or collects a fee less than that provided herein from another gas utility for such services shall be automatically reduced to the lesser fee charged to the other gas utility (or to zero, if no such fee is charged such other gas utility provider). SECTION 12. SERVICE STANDARDS; EXTENSION POLICY. CLEARWATER, its successors and assigns shall furnish twenty four (24) hours of continuous service each and every day to any customer within SAFETY HARBOR desiring the same and failure upon the part of CLEARWATER to: furnish Gas as herein provided for any cause within the control of CLEARWATER for a period of seventy-two (72) hours; and/or other breach of term hereof, either not being corrected within thirty (30) days after written notice by SAFETY HARBOR thereof may act as a forfeiture of this franchise in the discretion of SAFETY HARBOR. CLEARWATER shall have the opportunity to be heard by SAFETY HARBOR'S Ord. No. 2005-08 Page 18 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 Commission at a duly convened meeting of the Commission prior to consideration of any such forfeiture. SECTION 13. COSTS; OWNERSHIP; REPAIRS; RELOCATION. CLEARWATER shall install the necessary facilities or equipment at its own cost and expense and same shall be and remain the property of CLEARWATER; and CLEARWATER'S facilities or equipment and other physical properties used in connection with the furnishing of Gas under this franchise shall be free from any ad valorem tax of SAFETY HARBOR as long as the same remains the property of CLEARWATER, except as otherwise provided by applicable Florida Statute or applicable Court decision adopted after date of execution hereof. The mains shall be laid underground and CLEARWATER shall re-pave or re-Iay, as promptly as possible, all streets, lanes, alleys, sidewalks, squares, or public places dug or disturbed by it in the installation of said mains or for any other purpose attending such work, and it shall repair and restore such streets, lanes, alleys, sidewalks and public places to their former and safe condition and with the same quality of material or its equivalent as was existing before said work commenced. In all cases the repair work shall be made passable to traffic during conduct of such work as soon as physically possible. Should CLEARWATER neglect or refuse to restore or repair without delay after completion of installation and after ten (10) business days written notice, any streets, alleys, lanes, squares, sidewalks or public places which may have been excavated, dug or disturbed by it, its employees or agents, then SAFETY HARBOR shall have such repairs and restoration done and the expense incident thereto shall be paid by CLEARWATER. CLEARWATER shall obtain Ord. No. 2005-08 Page 19 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 the required permits from SAFETY HARBOR prior to the construction and installation of any facilities or equipment within the City's rights-of-way. CLEARWATER shall secure and otherw~se make safe any area excavated, dug or disturbed by it and shall hold SAFETY HARBOR harmless from any loss or damages arising from injury to persons or property in such area. In the case of an emergency, CLEARWATER shall only be required to notify SAFETY HARBOR'S City Engineer and may obtain an "after the fact" permit subject to the requirements of the City Engineer. CLEARWATER shall, locate all facilities and equipment so that such will not interfere with SAFETY HARBOR'S use of its rights-of-way and shall not cause a hazard to the public health, safety, welfare, and aesthetics of SAFETY HARBOR. In accordance with the Charter of SAFETY HARBOR, SAFETY HARBOR shall have the right to control at all times distribution of any space in, over, across or under all streets, alleys, public grounds or other public places, occupied by public utility fixtures, and when, the public interest so requires to cause such fixtures to be relocated at the expense of CLEARWATER. Further, SAFETY HARBOR shall at all times have the power to enact all regulatory ordinances, rules and regulations affecting utilities which are required in the interest of public health, safety, welfare or accommodation. Prior to requiring CLEARWATER to relocate, SAFETY HARBOR shall give CLEARWATER written notice of such requirement and the opportunity to be heard first by City staff or if SAFETY HARBOR and CLEARWATER can not agree by SAFETY HARBOR'S Commission as to the costs of such relocation to CLEARWATER and possible alternative locations and routes, for SAFETY HARBOR'S Ord. No. 2005-08 Page 20 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, FL 34695 improvements. Ultimately, the decision as to such need for relocation shall be SAFETY HARBOR'S. Should it become necessary in the installation of Gas lines or facilities to relocate water or sewer lines of SAFETY HARBOR now or hereafter installed, then such work shall be done at the expense of CLEARWATER and not SAFETY HARBOR. It is understood that in all instances the facilities of SAFETY HARBOR shall have a reasonable right-of-way and preference over that of CLEARWATER herein. SECTION 14. INDEMNIFICATION. CLEARWATER shall at all times indemnify, defend and hold SAFETY HARBOR harmless from or on account of any claims, losses, injuries or damages, received or sustained by any person or persons during or on account of any work or operations engaged in by CLEARWATER in connection with the operation of CLEARWATER'S franchise pursuant to this Interlocal Agreement; or by or in consequence of any negligence, excluding the sole negligence of SAFETY HARBOR, in connection with the same; or by or on account of the use of any improper materials or by or on account of any act or omission of CLEARWATER, its agents, servants, or contractors. CLEARWATER agrees to defend, indemnify and save harmless SAFETY HARBOR against liability arising from or based upon violation of any Federal, State, County or Municipal law, ordinance or regulation by CLEARWATER, its agents, servants, employees, or contractors. This indemnification provision obligates CLEARWATER to defend SAFETY HARBOR from any and all liability claims and all suits and actions that may be brought against SAFETY HARBOR resulting from the sole negligence of CLEARWATER. Ord. No. 2005-08 Page 21 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 CLEARWATER may defend SAFETY HARBOR with CLEARWATER'S in-house staff counsel at trial and... a.. II appellate levels or CLEAA~TER may provideJorSAFETY -., ,-,-, ,'-'-' ~ HARBOR'S defense with outside counsel by paying for all attorney=s fees, costs and trial expenses. The decision to defend with in-house counselor with outside counsel shall be within CLEARWATER'S sole discretion. CLEARWATER'S obligation to defend SAFETY HARBOR for the acts or omissions of CLEARWATER, its agents, servants, employees or contractors shall be limited to the extent provided in ~768.28, Florida Statutes. Notwithstanding anything contained herein to the contrary, this indemnification provision shall not be construed as a waiver of any immunity from or limitation of liability to which CLEARWATER or SAFETY HARBOR is entitled to pursuant to '768.28, Florida Statutes. Furthermore, this provision is not intended to nor shall be interpreted as limiting or in any way affecting any defense CLEARWATER or SAFETY HARBOR may have under ~768.28 and is not intended to and shall not be interpreted to alter the extent of CLEARWATER'S or SAFETY HARBOR'S waiver of sovereign immunity under ~768.28. The parties to this Interlocal Agreement specifically agree to be fully responsible for their own acts of negligence or their respective agents acts of negligence when acting within the scope of their employment, and agree to be liable for any damages resulting from said negligence. Nothing herein is intended to serve as a waiver of sovereign immunity by either party, and nothing herein shall be construed as consent by either party to be sued by third parties in any manner arising out of this Ordinance. Ord. No. 2005-08 Page 22 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 SECTION 15. INSURANCE. SAFETY HARBOR shall be furnished proof of insurance coverage by CLEARWATER to include: General Liability: $100,000.00 per Person/$200,000.00 per Occurrence self-insured retention with statutory limits per Section 768.28, Florida Statutes. Excess Insurance: $5,000,000.00 per Occurrence Excess Insurance (Aggregate applicable) with self- insurance retention of $500,000.00. Automobile Liability: $100,000.00 per Person/$200,000.00 per Occurrence self-insured retention with statutory limits per Section 768.28, Florida Statutes. Excess Insurance: $5,000,000.00 per Occurrence Excess Insurance (Aggregate applicable) with self- insured retention of $500,000.00. Worker's Compensation and Employer's Liability: Statutory coverage per Occurrence with self-insured retention of $500,000.00. Excess Insurance $5,000,000.00 Per Occurrence (Aggregate applicable). The insurance coverage required herein may be provided by CLEARWATER by self-insurance (self-insurance retention subject to change), by self-funding, by purchase, or by any combination thereof at the sole option of CLEARWATER. Insurance coverage and limits shall be evidenced by delivery to SAFETY HARBOR of letters of self-insurance or self-funding executed by CLEARWATER'S Risk Manager, or by certificates of insurance executed by either the agent for the insurers or the insurers or by copies of policy declaration pages. Such letters, certificates, and policy declaration pages shall list coverages (including the amount of insurance per claim and per occurrence, any gap in coverage, and the name of the excess insurer) and policy limits with expiration dates. Upon the specific Ord. No. 2005-08 Page 23 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 written request of SAFETY HARBOR, a photocopy of each applicable insurance policy, including all endorsements, will be provided to SAFETY HARBOR. CLEARWATER will provide SAFETY HARBOR prior written notice of any change to CLEARWATER'S self-insurance retention. SECTION 16. COMPLIANCE WITH ORDINANCES. CLEARWATER, its successors and assigns, shall at all times comply with all ordinances, rules and regulations enacted or passed by SAFETY HARBOR not in conflict with the terms of this franchise and CLEARWATER shall have the right to make, establish and maintain and enforce such reasonable regulations for the operation of its distribution system as may be reasonably necessary and proper, not inconsistent with the terms of this franchise and the ordinances of SAFETY HARBOR, and to protect itself from fraud or imposition and may, in its discretion, refuse to furnish Gas and to cut off the supply from any customer or customers who are in default in payment of any bill rendered for such service. SECTION 17. AVAILABILITY OF RECORDS; MAPS AND REPORTS; AUDIT. Within sixty (60) days after execution of this agreement, CLEARWATER shall provide SAFETY HARBOR with a map showing all CLEARWATER'S Gas lines and facilities within SAFETY HARBOR. Upon SAFETY HARBOR'S request, CLEARWATER shall provide an up-date of such map to reflect changes in CLEARWATER'S Gas lines and facilities. Further, CLEARWATER shall provide for review and inspection of such maps and also accounts and records of CLEARWATER and/or all such information regarding SAFETY HARBOR that SAFETY HARBOR or its representatives Ord. No. 2005-08 Page 24 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 may from time to ~reasonabty.req~or require. O1kARWATE~'>ShaU~ppfy information that SAFETY HARBOR or its representatives. may from time to time reasonably request relative to the calculation of franchise fees. CLEARWATER'S financial records shall be kept and maintained in accordance with generally. accepted accounting principles. All of these records shall, on written request of SAFETY HARBOR, be open for examination by SAFETY HARBOR and SAFETY HARBOR'S representatives during ordinary business hours, and such records shall be retained by CLEARWATER for a period of three (3) years. Upon any map information of CLEARWATER becoming available in electronic format, CLEARWATER shall at SAFETY HARBOR'S request make any map information available in that format. SAFETY HARBOR may require an audit of CLEARWATER'S books not more than once every five (5) years. CLEARWATER will reimburse SAFETY HARBOR'S audit costs if the audit identifies errors in CLEARWATER'S franchise fee payments of five percent (5%) or more for the period audited. Errors identified during the audit process shall be projected for any additional time periods not covered during the audit if there is a reasonable probability these errors occurred during the unaudited period, but not for more than five (5) years. If an underpayment of franchise fees has occurred, interest will be computed at a rate of ten percent (10%) per annum. Both the underpayment and interest shall be paid within thirty (30) days after receipt of demand therefore from SAFETY HARBOR. SECTION 18. ASSIGNMENT OF GRANT. This grant or franchise, or any renewals thereof, shall not be leased, assigned, or otherwise alienated, except with the consent of SAFETY HARBOR Ord. No. 2005-08 Page 25 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 expressed by ordinance, which consent shall not be unreasonably withheld, and evidenced by a written assignment and consent to same. In consideration of consenting to such assignment the matters which may be considered by SAFETY HARBOR should include, but not be limited to, the financial wherewithal and technical experience and capabilities of the proposed Assignee. SECTION 19. VENUE. In the event that any legal proceeding is brought to enforce the terms of this Franchise Agreement, the same shall be brought in Pinellas County, Florida, or, if a federal claim, in the U.S. District Court in and for the Middle District of Florida. Tampa Division. SECTION 20. NOTICES. Except for notices under Sections 3 and 5, all notices by either SAFETY HARBOR or CLEARWATER to the other shall be made by either depositing such notice in the United States Mail, Certified Mail return receipt requested or by facsimile. All notices required under Sections 3 and 5 shall be made, in writing, and served by Certified Mail return receipt requested. Any notice served by certified mail return receipt shall be deemed delivered five (5) days after the date of such deposit in the United States mail unless otherwise provided. Any notice given by facsimile is deemed received by next Business Day. "Business Day" for purposes of this section shall mean Monday through Friday, 8:00 a.m. through 5:00 p.m., with Saturday, Sunday and SAFETY HARBOR and CLEARWATER observed holidays excepted. All notices shall be addressed as follows: Ord. No. 2005-08 Page 26 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 To SAFETY HARBOR: To CLEARWATER: City of Safety Harbor Attn: City Manager 750 Main Street Safety Harbor, FL 34695 Facsimile No.: 727/724-1566 Clearwater Gas System Attn: Managing Director 400 Myrtle Avenue North Clearwater, Florida 33755 Facsimile No.: 727/562-4903 With a copy to: City Attorney 750 Main Street Safety Harbor, FL 34695 Facsimile No.: 727/724-1566 City Attorney Post Office Box 4748 Clearwater, FL 33758-4748 Facsimile No.: 727/562-4021 Notices shall be given as required by this Franchise and for all other emergencies. Notice shall be provided to the above-named addresses unless directed otherwise in writing by SAFETY HARBOR or CLEARWATER. SECTION 21. CONFLICT; FILING. Upon adoption of this ordinance, the franchise provided in SAFETY HARBOR's Ordinance 91-21 shall be of no further force and effect. Upon full execution hereof, CLEARWATER shall file with the Clerk a fully executed copy of this agreement for recording in the publiC records in and for Pinellas County, Florida, and shall provide a copy to SAFETY HARBOR. SECTION 22. SEVERABILITY. If any section or sections of this agreement are declared invalid for any reason, such invalidity shall not affect the remaining sections thereof. SECTION 23. EFFECTIVE DATE. Ord. No. 2005-08 Page 27 of 29 This agreement shall become effective upon the first day of the month after approval this agreement by appropriate acts by CLEARWATER's and SAFETY HARBOR's commissions. IN WITNESS WHEREOF, SAFETY HARBOR and CLEARWATER hereto have executed this agreement on the day and year above written. PASSED ON FIRST READING THIS 18TH DAY OF APRIL, 2005. PASSED AND ADOPTED ON SECOND AND FINAL READING THIS 2ND DAY OF MAY, 2005. ~~(b~ ~ Mayor-Commissioner__ ~~er ATTEST: L. -:"(u) ^' ~I. 1t~ d~~;~ Com missioner c?-6ti" &~ City tlerk ~/d& ~~ City of Safety Harbor 750 Main Street SafetyHarbor,FL34695 Ord. No. 2005-08 Page 28 of 29 ~/d& ~~ City of Safety Harbor 750 Main Street Safety Harbor, R. 34695 Accepted: Resolution Number 05-<14 adopted on S-/9. t?S -i<~, / ~ Mayor ~~ , ~1(~~~L Ifyn i E. Goudeau City Clerk- Ord. No. 2005-08 Page 29 of 29 .- " r, \. ~ . I~ - _.,.. l:OIIIIIJNl: Of" lItE _AI. WA_T 1lI All DeI'lllNT__ ~ _ Of" THE _or -- I1ION lItE CIIfID or THE 1IITAACOo\STAI. WAJUMAT 10 1lll: . POM Of" 1NTERIIc:T WIllI TIfC IIlOIEUIII Of" >>IE GUll Of" WEllICO ~ r EXHIBIT Exhibit n A" CLEARWATER GAS SYSTE~ / PEOPLES GAS TERRITORIAL BOUNDRIES --- POlIlT or 8011_0 . TNI NOIITMlAIT eClRHER or KenON 2. TOWNSHP 27 SOUTN. IWIG[ 17 WT I I. '" ~ ~~ sa nUITOIlIAL _!WENT fOlI EXI'i.JoNATlON 01 IOUHlWII' II THaC MEAl IA- January " I'" ~-