Appendix C

APPENDIX C. GAS UTILITY FRANCHISE

ORDINANCE NO. 704

AN ORDINANCE GRANTING A NON-EXCLUSIVE GAS UTILITY FRANCHISE TO NORTHWEST NATURAL GAS COMPANY, AND FIXING TERMS, CONDITIONS AND COMPENSATION OF SUCH FRANCHISE.

THE CITY OF BROWNSVILLE ORDAINS AS FOLLOWS:

Section 1: Definitions and Explanations.

(1) As used in this ordinance:

(a) “City” means the City of Brownsville and the area within its boundaries, including its boundaries as extended in the future.

(b) “Council” means the legislative body of the City.

(d) “Gas mains” includes all gas transmission and distribution facilities located on or under any right-of-way or public place within the City.

(e) “Person” includes an individual, corporation, association, firm, partnership and joint stock company.

(f) “Public place” includes any park, place or grounds within the City that is owned by the City and is open to the public, but does not include a right-of-way.

(g) “Right-of-way” includes a street, alley, avenue, road, boulevard, thoroughfare, bridge or public highway within the City, but does not include a public place.

(2) As used in this ordinance, the singular number may include the plural and the plural number may include the singular.

Section 2: Rights Granted.

Subject to the conditions and reservations contained in this ordinance, the City hereby grants to NORTHWEST NATURAL GAS COMPANY, a corporation, the right, privilege and franchise to:

(1) Construct, maintain and operate a gas utility system within the city;

(2) Install, maintain and operate on and under the rights-of-way of the City, facilities for the transmission and distribution of gas to the City and its inhabitants and to other customers and territory beyond the limits of the City; and

(3) Transmit, distribute and sell gas.

Section 3: Use of Right-of-Way by Grantee.

(1) Before the Grantee may use or occupy any right-of-way, the Grantee shall first obtain permission from the City to do so and shall comply with any special conditions the City desires to impose on such use or occupation.

(2) The compensation paid by the Grantee for this franchise includes all compensation for the use of rights-of-way located within the City as authorized.

Section 4: Duration.

This franchise is granted for a period of 20 years from and after the effective date of this ordinance.

Section 5: Franchise Not Exclusive and Not Limitation on City’s General Powers.

This franchise is not exclusive, and shall not be construed as a limitation on the City in:

(1) Granting rights, privileges and authority to other persons similar to or different from those granted by this ordinance.

(2) Constructing, installing, maintaining or operating any City-owned public utility.

(3) Adopting general ordinances that apply to Grantee in the same manner as to other persons residing or doing business in the City.

Section 6: Public Works and Improvements Not Affected by Franchise.

The City reserves the right to:

(1) Construct, install, maintain and operate any public improvement, work or facility.

(2) Do any work that the City may find desirable on, over or under any right-of-way or public place.

(3) Vacate, alter or close any right-of-way or public place, provided that the City shall either preserve Grantee’s right to maintain its existing facilities in the vacated or closed right-of-way or public place, or make available to Grantee an alternative right-of-way for the location of its facilities.

(4) Whenever the City shall excavate or perform any work in any of the present and future rights-of-way and public places of the City, or shall contract, or issue permits, for such excavation or work where such excavation or work may disturb Grantee’s gas mains, pipes and appurtenances, the City shall, in writing (including fax or e-mail), notify Grantee sufficiently in advance of such contemplated excavation or work to enable Grantee to take such measures as may be deemed necessary to protect such gas mains, pipes and appurtenances from damage and possible inconvenience or injury to the public. In any such case, the Grantee, upon request, shall furnish maps or drawings to the City or contractor, as the case may be, showing the approximate location of all its structures in the area involved in such proposed excavation or other work.

Section 7: Continuous Service.

The Grantee shall maintain and operate an adequate system for the distribution of gas in the City to all current gas customers who are residents and businesses within the City limits. The Grantee shall use due diligence to maintain continuous and uninterrupted 24-hour a day service which shall at all times conform at least to the standards common in the business and to the standards adopted by state authorities and to standards of the City which are not in conflict with those adopted by the state authorities. Under no circumstances shall the Grantee be liable for an interruption or failure of service caused by act of God, unavoidable accident or other circumstances beyond the control of the Grantee through no fault of its own.

Section 8: Safety Standards and Work Specifications.

(1) The facilities of the Grantee shall at all times be maintained in a safe, substantial and workmanlike manner.

(2) For the purposes of carrying out the provisions of this section, the City may provide such specifications relating thereto as may be necessary or convenient for public safety or the orderly development of the City. The City may amend and add to such specifications from time to time.

Section 9: Control of Construction.

The Grantee shall file with the City, in such format that is available to Grantee as the City may require, maps showing the location of any construction, extension or relocation of its gas mains in the right-of-way and public places of the City and shall obtain from the City approval of the location and plans prior to commencement of the work. The City may require the Grantee to obtain a permit before commencing the construction, extension or relocation of any of its gas mains.

Section 10: Right-of-Way Excavations and Restorations.

(1) Subject to the provisions of this ordinance, the Grantee may make necessary excavations for the purpose of constructing, installing, maintaining and operating its facilities. The Grantee shall obtain from the City prior approval of any proposed excavation in the traveled portion of any right-of-way and its location, except: when an emergency makes it impracticable to get prior approval, or when Grantee is performing routine service connections or ordinary maintenance on private property. The Grantee shall also obtain prior approval of excavations in any untraveled portion of any right-of-way and in any public place where Grantee has facilities, if the City has previously notified Grantee by telephone, electronic data transmittal or other appropriate means that the City will require prior notice and approval of such excavations. Grantee shall give notice to the City by telephone, electronic data transmittal or other appropriate means prior to the commencement of service or maintenance work and as soon as is practicable after the commencement of work performed under emergency conditions.

(2) When any excavation is made by the Grantee, the Grantee shall promptly restore the affected portion of the right-of-way or public place to the same condition in which it was prior to the excavation. The restoration shall be in compliance with specifications, requirements and regulations of the City in effect at the time of such restoration. If the Grantee fails to restore promptly the affected portion of a right-of-way or public place to the same condition in which it was prior to the excavation, upon thirty (30) days prior written notice to Grantee, the City may make the restoration and the cost thereof shall be paid by the Grantee.

Section 11: Location and Relocation of Facilities.

(1) All facilities of the Grantee shall be placed so that they do not interfere unreasonably with the use by the City and the public of the right-of-way and public places and in accordance with any specifications adopted by the City governing the location of facilities.

(2) The City may require, in the public interest, the removal or relocation of facilities maintained by the Grantee in the rights-of-way and public places of the City, and the Grantee shall remove and relocate such facilities within a reasonable time after receiving notice to do so from the City. The cost of such removal or relocation of its facilities shall be paid by the Grantee, but when such removal or relocation is required for the convenience or benefit of any person, governmental agency or instrumentality other than the City, Grantee shall be entitled to reimbursement for the reasonable cost thereof from such person, agency or instrumentality. The City shall provide the Grantee with timely notice of any anticipated requirement to remove or relocate its facilities and shall cooperate with the Grantee in the matter of assigning or allocating the costs of removal or relocation.

Section 12: Compensation.

(1) As compensation for the franchise granted by this ordinance, the Grantee shall pay to the City an amount equal to three percent (3%) of the gross revenue collected by the Grantee from its customers for gas consumed within the city. Gross revenue shall be computed by deducting from the total billings of the Grantee, the total net write-off of uncollectible accounts, revenues derived from the sale or transportation of gas supplied under an interruptible tariff schedule, revenues paid directly by the United States of America or any of its agencies, and sales of gas at wholesale by the Grantee to any public utility or public agency where the public utility or public agency purchasing such gas is not the ultimate consumer. The Grantee may offset against such compensation the amount of any license, permit or other fees paid to the City in connection with the Grantee’s use of the right-of-way of the City.

(2) No later than sixty days prior to the end of the fifth, tenth and fifteenth years of the franchise term, either City or Grantee may notify the other of its desire to renegotiate the amount of compensation to be paid by Grantee. Factors that would justify a change in compensation include, but are not limited to: statutory authorization to cities to charge a higher percentage of gross revenues, statutory amendments authorizing a different definition of gross revenue for comparable purposes, and changes in the energy industry that place Grantee in an uncompetitive position as a result of paying the compensation due under this franchise.

(3) The compensation required by this section shall be due for each calendar year, or fraction thereof, within sixty (60) days after the close of such calendar year, or fraction thereof. Within sixty (60) days after the termination of this franchise, compensation shall be paid for the period elapsing since the close of the last calendar year for which compensation has been paid.

(4) The Grantee shall furnish to the City with each payment of compensation required by this section a statement showing the amount of gross revenue of the Grantee within the City for the period covered by the payment computed on the basis set out in subsection (1) of this section. The compensation for the period covered by the statement shall be computed on the basis of the gross revenue so reported. If the Grantee fails to pay the entire amount of compensation due the City through error or otherwise, the difference due City shall be paid by the Grantee within fifteen (15) days from the discovery of the error or determination of the correct amount. Any overpayment to the City through error or otherwise, shall be offset against the next payment due from the Grantee.

(5) Acceptance by the City of any payment due under this section shall not be deemed to be a waiver by the City of any breach of this franchise occurring prior thereto, nor shall the acceptance by the City of any such payments preclude the City from later establishing that a larger amount was actually due, or from collecting any balance due to the City.

(6) Grantee shall pay interest at the one-year U.S. Treasury rate established at the beginning of each calendar year on all compensation due but unpaid for more than thirty days.

(7) If an examination of Grantee’s records by City or City’s agent reveals that Grantee has failed to pay the full amount of compensation due to the City, and the amount paid was less than 95% of the amount due for any period for which compensation was owed, Grantee shall reimburse City for the reasonable expenses City incurred to examine Grantee’s records.

Section 13: Expiration.

At the end of the Franchise term, if the City and Grantee are negotiating another franchise and have not concluded their negotiations, Grantee’s rights and responsibilities shall be controlled by this Franchise until the City grants a new franchise and Grantee accepts it.

Section 14: Books of Account and Reports.

The Grantee shall keep accurate books of account at an office in Oregon for the purpose of determining the amounts due to the City under Section 12 of this ordinance. The City may inspect the books of account at any time during business hours and may audit the books from time to time. The Council may require periodic reports from the Grantee relating its operations and revenues within the City.

Section 15: Supplying Maps Upon Request.

The Grantee shall maintain on file, at an office in Oregon, maps and operational data pertaining to its operations in the City. Upon reasonable notice, an authorized representative of the City may inspect the maps and data at any time during business hours at an office of the Grantee. Grantee and the City may determine that the locations of certain gas facilities should be confidential as the public interest may require. In such a case, the City shall treat any public record disclosing the location of these facilities as confidential, subject to the provisions of state law and the Oregon Public Records Law. The City shall limit access to any such confidential record to trustworthy employees of the City with a need to know the information set out in the record. The City shall store any such confidential record in a secure and private place and avoid making and distributing copies of the record.

Section 16: Indemnification.

The Grantee shall indemnify and save harmless the City and its officers, agents and employees from any and all loss, cost and expense arising from damage to property and/or injury to, or death of, persons due to any wrongful or negligent act or omission of the Grantee, its agents or employees in exercising the rights, privileges and franchise hereby granted.

Section 17: Assignment of Franchise.

(1) This franchise shall be binding upon and inure to the benefit of the successors, legal representatives and assigns of the Grantee.

(2) This franchise may not be assigned or transferred by Grantee without the prior written consent of the City. City shall not unreasonably withhold its consent, if City fails to act on the proposed assignment or transfer within 60 days following receipt of the written notice of the proposed assignment or transfer, the City will be deemed to have consented.

Section 18: Termination of Franchise for Cause.

The City may terminate this franchise as provided in this Section, subject to Grantee’s right to a court review of the reasonableness of such action, upon the failure of the Grantee to perform promptly and completely each and every material term, condition or obligation imposed upon it under or pursuant to this ordinance. The City shall provide the Grantee written notice of any such failure and the Grantee shall have a reasonable time to cure such failure.

Section 19: Valuation for Eminent Domain Purposes.

If City needs to acquire any of Grantee’s property or facilities by purchase, condemnation or otherwise, the price to be paid by City shall not include the value of the franchise granted by this ordinance or any extension or renewal thereof.

Section 20: Remedies Not Exclusive; When Requirement Waived.

All remedies and penalties under this ordinance, including termination of the franchise, are cumulative, and the recovery or enforcement of one is not a bar to the recovery or enforcement of any other such remedy or penalty. The remedies and penalties contained in this ordinance, including termination of the franchise, are not exclusive and the City reserves the right to enforce the penal provisions of any ordinance or resolution and to avail itself of any and all remedies available at law or in equity. Failure to enforce shall not be construed as a waiver of a breach of any term, condition or obligation imposed upon the Grantee by or pursuant to this ordinance. A specific waiver of a particular breach of any term, condition or obligation imposed upon the Grantee by or pursuant to this ordinance shall not be a waiver of any other or subsequent or future breach of the same or of any other term, condition or obligation, or a waiver of the term, condition or obligation itself.

Section 21: Acceptance.

The Grantee shall, within thirty (30) days from the date this ordinance takes effect, file with the City its written unconditional acceptance of this franchise and if the Grantee fails so to do, this ordinance shall be void.

PASSED on first reading by the City Council this 17th day of April 2006.

Passed on second reading by the City Council this 15th day of May 2006.

	__________________/s/____________
	Mayor
ATTEST:
__________________/s/____________
Recorder