APPENDIX IV.
NATURAL GAS FRANCHISE

ORDINANCE NO. 2895

AN ORDINANCE GRANTING A NON-EXCLUSIVE GAS UTILITY FRANCHISE TO NORTHWEST NATURAL GAS COMPANY, AND FIXING TERMS, CONDITIONS AND COMPENSATION OF SUCH FRANCHISE AND REPEALING ORDINANCE 2484.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1: Definitions and Explanations.

(1)    As used in this ordinance.

(a)    "Bridge" includes a structure erected within the City to facilitate the crossing of a river, stream, ditch, ravine or other place, but does not include a culvert.

(b)    "City" means the City of Cottage Grove and the areas within its boundaries, including its boundaries as extended in the future.

(c)    "Council" means the legislative body of the City.

(d)    "Grantee" means the corporation referred to in Section 2 of this ordinance.

(e)    "Gas mains" includes all gas transmission and distribution facilities located on or under any street, bridge or public place within the City.

(f)    "Person" includes an individual, corporation, association, form, partnership and joint stock company.

(g)    "Public place" includes any city-owned park, place or grounds within the City that is open to the public but does not include a street or bridge.

(h)    "Street" includes a street, alley, avenue, road, boulevard, thoroughfare or public highway within the City, but does not include a bridge.

(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 streets and bridges and public places 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 Streets, Bridges and Public Places by Grantee.

(1)    Before the grantee may use or occupy any street, bridge or public place, the Grantee shall first obtain permission from the City so to do 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 streets, bridges and public places 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.

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.

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 street, bridge or public place.

(3)    Vacate, alter or close any street, bridge or public place, provided that the City shall make available to Grantee with 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 streets, alleys 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, 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.

(5)    Whenever the City shall vacate any street or public place for the convenience or benefit of any person or governmental agency or instrumentality, Grantee’s right under this franchise shall be preserved as to any of its facilities then existing in such street or public place.

Section 7: Continuous Service.

The Grantee shall maintain and operate an adequate system for the distribution of gas in the City.  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 an 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 purpose 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 maps showing the location of any construction, extension or relocation of its gas mains in the public right-of-way of the City and shall obtain from the City written 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: Street 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.  Open cut excavations of streets, sidewalks and other paved area shall be avoided as is practical.  Except in emergencies, and in the performance of routine service connections and ordinary maintenance, on private property, prior to making an excavation in the traveled portion of any street, bridge or public place, and, when required by the City, in any untraveled portion of any street, bridge, or any public place, the Grantee shall obtain from the City written approval of the proposed excavation and of its location.  Upon approval from City, 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 street, bridge 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.  Should street restoration settle or otherwise deteriorate beyond an acceptable standard, the Grantee shall correct the restoration at the request of the City.  If the Grantee fails to restore promptly the affected portion of a street, bridge or public place to the same condition in which it was prior to the excavation, 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 streets, bridges 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 streets of the City, and the Grantee shall remove and relocate such facilities within a reasonable time after receiving notice so to do 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 five (5%) 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 writeoff 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 streets, bridges and public places of the City.  In no case shall penalties or fines assessed for failure to obtain permits or licenses or violations of the provisions of this agreement be used as an offset against such compensation.  (Amd. Ord. 3033 §1, 2013)

(2)    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.

(3)    The Grantee shall furnish to the City with each payment of compensation required by this section a written 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 to City shall be paid by the Grantee within fifteen (15) days from 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.

(4)    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.

(5)    Upon 30 days’ prior written notice by either party to the other, the amount of such annual compensation shall be subject to renegotiation and redetermination at or before the expiration of the first, second and third successive five-year periods, respectively, of the term of the franchise hereby granted, for the ensuing five-year period of said franchise term.

Section 13: 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 to its operations and revenues within the City.

Section 14: 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 any time during business hours at an office of the Grantee.  Grantee and the City may mutually determine that the locations of certain Gas Facilities should be confidential as the public interest may require.  In such a case, Grantee is under no obligation to provide physical copies of the records of the location of these facilities to the City.  Any such records provided to the City disclosing the location of these facilities shall be treated 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 15: 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 16: Assignment of Franchise.

This franchise shall be binding upon and inure to the benefit of the successors, legal representatives and assigns of the Grantee.  Grantee shall notify the City of any sale or transfer of majority control of its plant or system at the time such information is filed with any regulatory agency.

Section 17: 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 willful 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 sixty (60) days from receipt of notice to cure such failure, or if such failure cannot reasonably be cured within sixty (60) days, to commence and diligently pursue curing such failure.

Section 18: 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 of 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 19: Repeal.

Upon the effective date hereof, but not otherwise, Ordinance No. 2484 of the City of Cottage Grove passed and approved August 22, 1983 is repealed.

Section 20: 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 by the Council and approved by the Mayor this 9th day of February, 2004.

/s/	/s/
Richard Meyers, City Manager	Gary Williams, Mayor
Dated:    Feb. 9, 2004	Dated:    Feb. 10, 2004