Chapter 5.20 GAS, OIL, ELECTRIC AND WATER FRANCHISES

"Grantee" shall include any successor or assign of the original grantee of any franchise granted hereunder. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-1).

5.20.020 Powers – Purposes.

This chapter is enacted by ordinance pursuant to the authority of Section 1400 of Article XIV of the Charter of the City of Santa Clara which vests in the City Council the power to provide a procedure for the granting of franchises upon such terms, conditions, restrictions, and limitations as may be prescribed by ordinance, but that no franchise shall be granted without reserving to the City adequate compensation for the privilege conferred. The purpose of this chapter is to provide an exclusive procedure for the granting of gas, oil, electric, and water franchises by the City, including resettlement franchises in lieu of existing franchises and claims, upon terms, conditions, restrictions, and limitations which will provide greater protection of the interests of the public than is provided for by general law. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-2).

5.20.030 Franchises – Authority to grant.

The City Council is hereby empowered to grant a franchise to any person, whether operating under an existing franchise or not, to use, or to construct and use, poles, wires, conduits, and appurtenances for transmitting and distributing electricity for all purposes, or to use, or to lay and use pipes and appurtenances for transmitting and distributing gas for any and all purposes, or to use, or to lay and use, pipes and appurtenances for transmitting and distributing oil or products thereof for any and all purposes, or to lay and use pipes, ditches, flumes, conduits, and appurtenances for transmitting and distributing water for any and all purposes, under, along, across or upon the public streets, ways, alleys, and places as the same now, or hereafter, exist within the city, upon the terms and conditions provided in the City's Charter and this chapter, and may, in such franchise, impose such other and additional terms, conditions, restrictions, and limitations not in conflict with said Charter or this chapter, whether governmental or contractual in character, as in the judgment of said Council are to the public interest. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-3).

Article II. Manner of Granting

5.20.040 Application – Filing, contents.

An applicant for a franchise shall file with the City Council an application stating:

(a) The name of the applicant.

(b) The purpose for which the franchise is desired.

(d) The amount or percentages applicant, if granted the franchise, proposes to pay to the City during the life of such franchise and any other terms or conditions that applicant may desire so long as they are supplemental to and not inconsistent with those set forth in this chapter.

(e) Notwithstanding any other provision of this section, if the application is for a franchise for a nonpublic utility pipeline for oil or products thereof, the application shall state that the applicant, if granted the franchise, will pay to the City during the life of the franchise either a specified percentage agreed to by the applicant and the City of the gross annual receipts of the applicant arising from the use, operation, or possession of the franchise or an annual franchise fee in an amount agreed to by the applicant and the City or an annual franchise fee computed by multiplying the sum of one cent ($0.01) times the nominal internal diameter of the pipe, expressed in inches, times the number of lineal feet of such pipe, within the public streets, ways, alleys, or other public places within the city. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 1, 3-18-69. Formerly § 12A-4).

5.20.050 Resolution of intention to grant franchise – Notice of hearing – Publication of notice – Time for hearing.

(a) Upon receipt of the application, the City Council may pass a resolution stating the character of the franchise, setting forth a notice of the day, hour, and place when and where all persons having any objection to the granting thereof may appear before the City Council and be heard thereon, and directing the City Clerk to publish the notice at least once within fifteen (15) days after the passage of the resolution in a newspaper of general circulation within the city.

(b) The time fixed for the hearing shall be not less than twenty (20) nor more than sixty (60) days after the date of the passage of the resolution. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-5).

5.20.060 City Council's discretion.

Nothing in this chapter shall make it mandatory for the Council to authorize publication of said notice.

The Council may consider applicant's ability to carry out its proposal, its financial and business standing, experience, and any other pertinent factors. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-6).

5.20.070 Contents of notice of hearing.

The notice of the time and place of hearing objections shall state that the grantee of the franchise and its successors and assigns, will during the life of its franchise, pay to the City the amounts or percentages specified in the application, and in the event such payment is not made the franchise will be forfeited. The notice shall also designate the term, whether definite or indeterminate, for which the franchise is proposed to be granted. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 2, 3-18-69. Formerly § 12A-7).

5.20.080 Protests – Hearing – Grant of franchise.

Any interested person may protest, stating objections against the granting of the franchise. At the time set for the hearing, the City Council shall hear the application and the protests. The City Council may adjourn the hearing from time to time. Following the conclusion of the hearing, the City Council shall decide if the franchise shall be granted. The decision of the City Council shall be final and conclusive, subject to the right of referendum of the people and the following provisions. The franchise shall be granted by ordinance upon the terms, conditions, and restrictions stated in the application and upon such other terms, conditions, and restrictions as the City Council deems are in the public interest. The decision of the City Council to grant a franchise shall not be made until such an ordinance is duly adopted, whereas the decision to deny is made on passage of a motion to deny. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-8).

5.20.090 Written acceptance.

Any franchise granted under this chapter shall not become effective until the grantee files written acceptance thereof with the City Clerk. When so filed, the acceptance constitutes a continuing agreement by the grantee that if and when the City thereafter annexes, or consolidates with, additional territory, all franchises, rights, and privileges of the grantee therein, except a franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911, shall be deemed abandoned within the limits of the additional territory. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-9).

Article III. Scope of Franchise

5.20.100 Effect of acceptance of grant.

Any franchise granted under this chapter with respect to a given utility service is in lieu of all other franchises, rights, or privileges of the grantee, or of any successor of the grantee to any rights under the franchise for transmitting and distributing the utility service within the limits of the City as such limits exist at the time of the granting of the franchise or as they may hereafter exist, except any franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911. The acceptance of any such franchise granted under this chapter shall operate as an abandonment of all other franchises, rights, and privileges of grantee or of any successor of grantee within the limits of the City as such limits at any time exist. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-10).

5.20.110 Franchise rights.

Every gas franchise granted pursuant to this chapter confers upon the grantee the right to use, or to lay and use, gas pipes and appurtenances for the purpose of transmitting and distributing gas; every oil franchise so granted confers upon the grantee thereof the right to use, or lay and use, oil pipes and appurtenances for the purpose of transmitting and distributing oil or products thereof; every water franchise so granted confers upon the grantee thereof the right to use, or to lay and use, pipes, ditches, flumes, conduits, and appurtenances for the purpose of transmitting and distributing water; and every electric franchise so granted confers upon the grantee thereof the right to use, or to construct and use, poles, wires or conduits and appurtenances for the purpose of transmitting and distributing electricity for any and all purposes, under, along, across, or upon the public streets, ways, alleys, and places as they now or hereafter exist within the city.

Such rights shall not include the right to occupy any park, playground, or other municipal property (exclusive of public thoroughfares), unless a special permit therefor shall be granted by the City Council. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-11).

5.20.120 Acquisition of grantee's property – Eminent domain.

No franchise granted under this chapter in any way impairs or affects the right of the City to acquire the property of the grantee by purchase or condemnation, and nothing contained in such a franchise shall be construed to contract away, modify or abridge either for a term or in perpetuity the City's right of eminent domain. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-12).

5.20.130 Valuation of franchise.

No franchise granted under this chapter shall ever be given any value before any court or other public authority in any proceeding of any character in excess of the cost to the grantee of the necessary publication and any other sum paid by it to the City therefor at the time of acceptance. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-13).

Article IV. Duties and Liabilities

5.20.140 Duty of applicant – Publication expenses.

The applicant for a franchise shall pay to the City a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the application and processing thereof. Such payment shall be made within thirty (30) days after the City furnishes the applicant with a written statement of the expenses. The City Council may by resolution require the deposit of a sufficient sum to cover such expense in advance of processing the application. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-14).

5.20.150 Duty of grantee – Construction and maintenance.

The grantee of a franchise under this chapter shall construct, install, and maintain all pipes, conduits, poles, wires and appurtenances in accordance and in conformity with all of the lawful ordinances and regulations adopted by the City Council in the exercise of its police powers, and, as to State highways, subject to the laws relating to the location and maintenance of such facilities therein. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 2, 3-18-69. Formerly § 12A-15).

5.20.160 Payment for repairs to public property.

The grantee shall pay to the City on demand the cost of all repairs to public property made necessary by any of the operations of the grantee under the franchise. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-16).

5.20.170 Indemnification of City.

The grantee shall protect, defend, indemnify and hold harmless the City and its officers and employees from all liability for damages proximately resulting from any operations under the franchise. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-17).

5.20.180 Removal or relocation of facilities.

The grantee shall remove or relocate without expense to the City any facilities installed, used, or maintained under the franchise when made necessary by any lawful change of grade, alignment, or width of any public street, way, alley, or place, including the construction for or by the City of any subway or viaduct or any other lawful public work of governmental character. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-18).

5.20.190 Filing of franchise transfer.

The grantee shall file with the City Council no less than thirty (30) days prior to any proposed sale, transfer, assignment, or lease, of the franchise or any part thereof, or any of the rights or privileges granted thereby, written evidence of the proposed transaction certified to by the grantee or its duly authorized officers. No franchise issued under the provisions of this chapter shall be sold, transferred, assigned, or leased without the consent of the City Council, and any attempt to sell, transfer, assign or lease without such consent is a nullity. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-19).

5.20.200 Annual statements.

The grantee shall file with the City Clerk, within three months after the expiration of the calendar year, or fractional calendar year, following the date of the granting of the franchise and within three months after the expiration of each calendar year thereafter, a verified statement showing in detail the total gross receipts of the grantee, its successors, or assigns during the preceding calendar year or fractional calendar year arising from the use, operation and possession of the franchise and the gross receipts from the sale within the city of the utility service for which the franchise was granted. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 3, 3-18-69. Formerly § 12A-20).

5.20.210 Payment – Effect of failure to file statement or make required payment.

The grantee shall pay to the City within 15 days after the time for filing its statement of gross receipts, in lawful money of the United States, the specified percentage of its gross receipts, and any other sum, for the calendar year or fractional calendar year covered by the statement. Any neglect, omission or refusal by the grantee to file the verified statement, or to pay the percentage at the time or in the manner provided constitutes grounds for the declaration of a forfeiture of the franchise and of all the rights thereunder. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 3, 3-18-69. Formerly § 12A-21).

5.20.220 Records and accounts.

The grantee shall keep and maintain for the term of the franchise and three years thereafter suitable and accurate accounts and records in such form as to enable the City to readily ascertain and check the amounts due it pursuant to the requirements of any franchise granted; provided, that nothing herein contained shall be deemed to require noncompliance with the provisions of applicable Federal or State law or regulations being paramount hereto. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-22).

5.20.230 Right to inspection of books.

The City shall have free access to and the right at any time to inspect and audit any books and records of the grantee involving or relating to calculations and transactions related to the franchise. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-23).

5.20.240 Bond of grantee – Conditions –Refusal or forfeiture of franchise.

(a) The grantee of a franchise under this chapter may be required to file a bond running to the City with at least two good and sufficient sureties approved by the City Council, or with a corporate surety approved by the City Council, in a penal sum prescribed by the City Council and set forth in the resolution of intention to grant the franchise, conditioned that the grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise, and that in case of any breach of condition of the bond, the amount of the penal sum therein shall be recoverable from the principal and sureties upon the bond.

(b) The bond, if required by the City Council, shall be filed with the City Council within five days after the date of the granting of the franchise; and if the bond is not so filed, or does not receive the approval of the City Council, the franchise may be refused or forfeited and any money paid to the City in connection therewith shall be retained by the City. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-24).

5.20.250 Reserved.

5.20.260 Forfeiture.

If the grantee of any franchise granted under this chapter fails, neglects, or refuses to comply with any of the provisions or conditions prescribed in this chapter and does not, within ten days after written demand for compliance, begin the work of compliance, or after such beginning, does not prosecute the work with due diligence to completion, the City, by its City Council, may declare the franchise forfeited. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-26).

5.20.270 Appointment of a receiver.

If for any reason a person provides service within the purview of this chapter within the city without authority of a franchise, the City Council may cause a receiver to be appointed who shall have authority to take custody of the property and gross receipts of the person providing service without a franchise and, from the property and gross receipts which are impounded, pay to the City an amount equal to that which would be paid to the City if the person were providing service under lawful authority of a franchise in addition to any costs to be incurred incidental to the receivership. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-27).

5.20.280 Suit by City for forfeiture of franchise.

The City shall also have the right to sue in its own name for the forfeiture of any franchise granted pursuant to this chapter because of the noncompliance of the grantee with any of the terms or conditions of the franchise. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-28).

5.20.290 Violation by grantee – Liability for damages to City for nonfaithful performance.

The grantee of the franchise under this chapter shall be liable to the City for all damages proximately resulting from the failure of the grantee well and faithfully to observe and perform any provisions of the franchise and any provision of this chapter. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-29).

5.20.300 Exemplary damages.

The City shall be allowed exemplary damages for violation of any of the terms hereof or of any franchise issued hereunder if, and to the extent, allowed by law. (Ord. 1169 § 1, 9-5-67; Ord. 1208 § 4, 3-18-69. Formerly § 12A-30).

5.20.310 Necessity for legal proceeding –Payment of legal fees.

If legal proceedings are necessary to enforce compliance with the provisions of this chapter against any grantee of a franchise, said grantee shall be liable for the value of attorneys' services, services of other personnel, and other expenses of City which are necessary to gain compliance herewith. (Ord. 1169 § 1, 9-5-67. Formerly § 12A-31).