Ordinance 1267 NORTHWEST NATURAL GAS COMPANY FRANCHISE

Ordinance 1267
NORTHWEST NATURAL GAS COMPANY FRANCHISE

ORDINANCE NO. 1267

AN ORDINANCE GRANTING A NON-EXCLUSIVE FRANCHISE WITH NORTHWEST NATURAL GAS COMPANY FOR THE OPERATION AND MAINTENANCE OF A SYSTEM TO PROVIDE NATURAL GAS SERVICES, REPEALING ORDINANCE NO. 1122, AND DECLARING AN EMERGENCY.

WHEREAS, Ordinance No. 1265 granted a non-exclusive Franchise to Northwest Natural Gas Company for the operation of a system within the public rights of way to provide natural gas services; and

WHEREAS, Ordinance No. 1265, Exhibit A, Section 27, provides as follows:

The Grantee shall, within thirty (30) days from the date this Ordinance is adopted, file with the City its written unconditional acceptance of this Franchise in the form attached as Exhibit 1. If Grantee fails to do so, this Ordinance shall be void.

WHEREAS, Northwest Natural Gas did not file its written unconditional acceptance of the Franchise within thirty (30) days of adoption and therefore, Ordinance No. 1265 is void; and

WHEREAS, Ordinance No. 1265 has inconsistent language, including provisions regarding the effective date of the Franchise, and it is in the public interest to clarify the inconsistent language of the Franchise; now, therefore

THE CITY OF JUNCTION CITY ORDAINS AS FOLLOWS:

Section 1. Grant of Franchise. The City Council grants the Franchise attached as Exhibit A to Northwest Natural Gas Company.

Section 2. Repeal. Ordinance No. 1122, An Ordinance Granting A Nonexclusive Gas Utility Franchise to Northwest Natural Gas Company is repealed as of the effective date of the Franchise granted by this Ordinance. Ordinance No. 1122 shall govern the use of Public Rights-of-Way and Public Places by Northwest Natural Gas from the effective date of Ordinance No. 1122 to the effective date of the Franchise granted by this Ordinance.

Section 3. Emergency Clause. For the preservation of the peace, health and safety of Junction City, Oregon, and due to the expiration of the Northwest Natural Gas Franchise adopted by Ordinance No. 1122, an emergency is declared to exist, and this Ordinance shall become immediately operative and in force from and after the date of adoption by the Junction City Council. The Franchise shall become operative and in force from and after the Effective Date as defined by the Franchise.

Read in full its first meeting on 12th day of October, 2021.

Read in title only for its second reading this 12th day of October, 2021.

Passed unanimously by the City Council this 12th day of October, 2021.

Approved by the Mayor this 12th day of October, 2021.

ATTEST:		APPROVED:

________________________		___________________________
Kitty Vodrup, City Recorder		Beverly A. Ficek, Mayor

Exhibit A

Franchise Agreement between the City of Junction City (City) and Northwest Natural Gas Company

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, road or other place, but does not include a culvert.

(b) "City" means the City of Junction City and the area within its boundaries, including its boundaries as extended in the future.

(d) “Effective Date” means the date the City receives the acceptance of this Franchise from Northwest Natural Gas Company pursuant to Section 27.

(e) “Existing Gas Facility” or “Existing Gas Facilities” means any Gas Facility of Grantee installed and operational on or before the Effective Date of this Franchise.

(f) "Grantee" means the corporation referred to in Section 2 of this Ordinance.

(g) "Gas Facility" or “Gas Facilities” means all new and existing gas transmission and distribution facilities owned by Grantee and located on or under any Public Rights-of-Way within the City and any existing gas transmissions and distribution facilities located on or under any Public Place within the City.

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

(i) "Public Place" includes any City-owned park, place or grounds within the City that is open to the public but does not include a Public Rights-of-Way.

(j) “Public Right-of-Way” or “Public Rights-of-Way” means Streets and Bridges under the control and jurisdiction of the City of Junction City, Oregon but does not include Public Places. A Public Rights-of-Way does not include a County Road or State Highway. Public Rights-of-Way may be used to signify the singular or plural.

(k) “Qualified Contractor” means a Person that is knowledgeable about the construction and operation of a natural gas transmission and distribution system, and must be subject to and comply with the qualifying standards as it relates to the work in question, set forth in 49 C.F.R. § 192, Subpart N – Qualification of Pipeline Personnel. Additionally, this Person must adhere to all applicable requirements of NW Natural Quality Assurance Program and Contractor Management Group.

(l) “Services” means the gas transmission, distribution, sales and marketing services provided by Grantee to its customers located within the City Limits.

(m) "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.

(3) Unless otherwise specified in this Ordinance, any action authorized or required to be taken by the City may be taken by the Council or by any official agent designated by the Council.

(4) This Ordinance shall be known as the Northwest Natural Franchise Ordinance. Within this document, it shall be referred to as “this Ordinance”, “this Franchise” or “the Franchise.”

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 non-exclusive right, privilege and franchise to:

(1) Construct, maintain and operate a gas utility system within the City.

(2) Install, maintain and operate on or under the Public Rights-of-Way of the City, Gas Facilities for the transmission and distribution of gas to the City and its inhabitants.

(3) Maintain and operate on or under Public Places Existing Gas Facilities for the transmission and distribution of gas to the City and its inhabitants. Existing Gas Facilities in Public Places shall not be upgraded, relocated, or replaced within a Public Place without a separate written agreement with the City, which the City shall negotiate in good faith considering such work may be necessary to ensure the safety and integrity of Grantee’s existing Gas Facilities or to ensure Grantee’s ability to serve customers. Nothing in this franchise provides authority for Grantee to locate new Gas Facilities in Public Places except pursuant to a separate written agreement with the City.

(4) Operate, maintain or remove existing Gas Facilities located within the City for the transmission of gas to points outside City boundaries. However, such Gas Facilities may not be installed, upgraded, relocated, or replaced without a separate written agreement from the City except where such work is necessary to ensure the safety and integrity of Grantee’s Gas Facilities or to ensure Grantee’s ability to serve customers.

Section 3. Use of Public Rights-of-Way and Public Places by Grantee.

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

(2) The compensation paid by Grantee for this Franchise includes compensation for the use of Public Rights-of-Way and Public Places located within the City as authorized.

(3) The written agreement described in Section 2(3) for Gas Facilities in Public Places may include additional compensation to be paid by Grantee.

Section 4. Duration. This Franchise is granted for a period of ten (10) years from and after the Effective Date of this Franchise, unless terminated sooner as provided herein.

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; and

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

This Franchise is intended to convey limited rights to those Public Rights-of-Way in which the City has an actual interest. It is not a warranty of title or interest in any Public Rights-of-Way. It does not provide the Grantee with any rights to any particular location within the Public Rights-of-Way. It does not confer rights other than as expressly provided in this grant. This Franchise is subject to all deeds, easements, dedications, conditions, covenants, restrictions, encumbrances and claims of title of record that may affect the Public Rights-of-Way. Nothing in this Franchise shall be deemed to grant, convey, create or vest in Grantee a real property interest in land, including any fee, leasehold interest or easement.

Section 6. City Reservation of Rights. Public Works and Improvements Not Affected by Franchise.

(1) The City reserves the right to:

(a) Construct, install, maintain, remove, relocate, replace and operate any public improvement or work in any Public Rights-of-Way, or Public Place.

(b) Do any work that the City may find desirable on, over or under any Public Rights-of-Way or Public Place.

(d) Whenever the City commences a process to vacate, alter or close any Public Rights-of-Way or Public Place for the convenience or benefit of any person or governmental agency or instrumentality, the City shall provide Grantee with the standard City-adopted notice for street vacations. If any Public Rights-of-Way or portion thereof used by Grantee is vacated by the City during the term of this Franchise, unless the City Council, in its sole discretion, specifically reserves to Grantee the right to continue its installation in the vacated Public Rights-of-Way or Grantee secures such right from the third party that will have title to the area in which Grantee has a portion of its Gas Facilities, Grantee shall, at its sole expense, relocate that portion of its Gas Facilities and restore, repair, or reconstruct the Public Rights-of-Way where such relocation has occurred to the same or better condition as before the relocation, unless otherwise instructed by the City. In the event of failure, neglect, or refusal of Grantee, after thirty (30) days’ written notice from the City, to relocate the portions of the Gas Facilities or to restore, repair or reconstruct the Public Rights-of-Way, the City may do such work using a “Qualified Contractor” at Grantee’s sole cost and expense. Upon the receipt of a demand for payment from the City, Grantee shall promptly reimburse the City for the costs the City incurred. The City shall make reasonable efforts to assist Grantee in identifying potential available alternative locations within the Public Rights-of-Way or, if requested by Grantee, City will cooperate with Grantee’s efforts to secure an alternate location in the vacated Public Rights-of-Way from the third party that shall have ownerships after vacation. Gas Facilities in a Public Place that is vacated, altered or closed shall be subject to Section 6(f).

(e) Abate any nuisance or dangerous condition.

(f) Control or prevent the use of any Public Place by Grantee and require payment of additional compensation for the use of the Public Place in any amount that the City finds to be reasonable. Existing Gas Facilities located within a Public Place, may be maintained or repaired without additional charge, subject to any special conditions imposed by the City on Grantee at the time the City permitted Grantee to place the Gas Facilities in the Public Place. In accordance with Section 2(3), Existing Gas Facilities in Public Places may not be upgraded, relocated, or replaced except as provided for in Section 2(3). Existing Gas Facilities located within an easement within a Public Place are subject to the terms of such easement.

(g) Exercise any non-regulatory power that the City currently holds, or may hereafter be authorized or granted by the laws of the State of Oregon or the City Charter or ordinances.

(h) In addition to the reservations contained in this Franchise and existing applicable ordinances, adopt such additional generally applicable regulations for Construction, Maintenance, and operation of Grantee’s Gas Facilities as the City finds necessary in the exercise of its police powers or for the orderly development of the City (including but not limited to zoning, land use, historic preservation ordinances, standard specifications, design standards and drawings, and other safety or construction standards, and other applicable requirements), or for the protection of City facilities. These regulations shall be subject to any applicable superseding provisions of state or federal law or regulations and shall be in conformance with standard engineering practices. The City may amend and add to these regulations from time to time. The City shall make a good-faith effort to provide Grantee written notice and opportunity to comment on any proposed new or amended regulations that would affect the Construction, Maintenance, and operation of Grantee’s Gas Facilities, but the City’s failure to provide such notice shall not affect Grantee’s obligation to comply with these regulations, nor shall it be deemed a material breach of the Franchise. Grantee shall promptly comply with these regulations.

(2) Whenever the City shall excavate or perform any work in any of the present and future Public 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 Facilities, 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 Facilities, pipes and appurtenances from damage and possible inconvenience or injury to the public. In any such case, 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.

(3) Police Powers and Other Laws. Each and every term, provision, and condition herein is subject to the provisions of federal law, Oregon law, the Charter of the City of Junction City, and the ordinances and regulations enacted pursuant thereto. Grantee’s rights hereunder are subject to the police powers of the City to adopt and enforce ordinances necessary to the safety, health, good order, comfort, and general welfare of the public, and as may be deemed necessary in the exercise of its police power. Grantee agrees to comply with all laws and ordinances of general applicability enacted, or hereafter enacted, by the City or any other legally constituted governmental unit having jurisdiction over the subject matter hereof.

(4) Franchise as Contract. This ordinance and the written acceptance by Grantee constitute a contract between the City and Grantee, and is binding upon and inures to the benefit of Grantee and its successors, legal representatives, and assigns, under the conditions imposed herein. By accepting the Franchise, Grantee acknowledges and accepts the City’s legal right to issue and enforce the Franchise and agrees to comply with each and every lawful provision of this Franchise consistent with applicable law.

Section 7. Continuous Service.

(1) Grantee shall maintain and operate an adequate and safe system for the distribution of gas in the City. 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 the state authorities, including the Public Utility Commission. Grantee’s liability is limited to the fullest extent provided by Grantee’s tariff approved by the Public Utility Commission. Grantee shall not be liable to the City for an interruption or failure of service caused by an act of God, unavoidable accident or other circumstances beyond the control of Grantee through no fault of its own.

(2) Construction and Maintenance of Gas Facilities. Grantee’s Gas Facilities shall be Constructed and Maintained in good order and condition, in a safe manner, and in accordance with standard engineering practice and all lawful governmental regulations.

(3) Protection of Property. Grantee shall install and maintain all Gas Facilities in a manner that does not injure or interfere with the Public Rights-of-Way or Public Place, or the property belonging to another Person within the City Limits. Grantee shall, at its sole expense, repair, renew, remove, relocate, change, or improve the Gas Facilities from time to time as may be necessary to accomplish this purpose, but nothing in this Section shall eliminate or otherwise impair Grantee’s right to seek reimbursement generally or in accordance with Section 10.

(4) Compliance with State and Federal Regulations. The rates to be charged and the rules and regulations in respect to the conditions, character, quality, and standards of service to be furnished by Grantee shall be those as may be lawfully prescribed by the Public Utility Commission and any other applicable state or federal law. In the event this jurisdiction or right of regulation, or any part thereof, is abandoned by the Public Utility Commission and is not vested exclusively by law in any other state regulatory body, and in the event this jurisdiction may be lawfully exercised by the City, consistent with subsection 6(1)(h) or 6(4), the City reserves the right to exercise this jurisdiction, and Grantee shall comply with all reasonable ordinances, rules, and regulations made by the City in the exercise of this jurisdiction or right of regulation.

Section 8. Safety Standards and Work Specifications.

(1) Grantee's facilities 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.

(3) Emergency Operation Provisions. The Grantee will provide the City with a current Emergency Response Plan detailing procedure for response to emergencies involving the Gas Facilities. Grantee may update this plan from time to time, and shall promptly provide all updates to the City. To the extent practicable, the Emergency Response Plan will include at least the following information:

(a) The names and 24-hour telephone numbers of responsible parties with the authority to commit the resources of the Grantee.

(b) The name and 24-hour telephone numbers of the Grantee’s Emergency Coordinator and other emergency contacts available to respond during emergencies.

(4) All Gas Facilities shall be constructed and maintained in accordance with this Franchise and with all City, State, and federal applicable Codes, rules, and regulations.

Section 9. Control of Construction.

(1) Construction Permits. Grantee will not construct, install or modify any facilities in the Public Rights-of-Way without first obtaining all required permits, approvals, licenses, insurances, bonding, scheduling approvals, and paying all required fees, including but not limited to that permit required by Junction City Municipal Code Chapter 12.15. When work on facilities located in the Public Rights-of-Way is necessary during an emergency or to remedy an immediate risk of harm to Persons or property, work will be allowed to commence immediately, provided that the requisite permits shall be obtained and fees paid within 72 hours thereafter. The City's fees for applicable construction permits shall be no greater than the reasonable administrative costs and expenses of the City in administering the permit, supervising the work, and inspecting the facilities. Grantee shall be responsible for all construction, installation, operation and maintenance regardless of who performed the work. Grantee shall install all gas pipes, pipelines, mains, extensions and other underground Gas Facilities at a minimum depth of 12 inches from the finished grade of the Public Rights-of-Way or as otherwise required by federal or state pipeline safety regulations. Any such pipelines that do not comply with the minimum depth requirement shall be lowered by Grantee to meet this depth requirement. City representatives shall be provided access to the work site and such further information as they require to ensure compliance with the requirements of this ordinance. Except in emergencies, prior to making an excavation, the Grantee shall obtain from the City approval for the proposed excavation and approval of its location.

(2) Grantee's Verification. All construction permit applications shall be accompanied by the verification of a qualified and duly authorized representative of the applicant that the drawings, plans and specifications submitted with the application comply with applicable technical codes, rules and regulations.

(3) Construction Schedule. All construction permit applications shall be accompanied by a written construction schedule, which shall include a deadline for completion of construction including restoration which shall be completed no more than 30 days after the work is substantially complete. The construction schedule is subject to approval by the City Administrator or designee. The permittee shall promptly complete all construction activities so as to minimize disruption of the Public Rights-of-Way and other public and private property.

(4) Coordination of Construction Activities. Grantee is required to cooperate with the City, including, but not limited to the following:

(a) Within thirty (30) days of a request by the City, Grantee shall provide the City with a schedule of its known proposed construction activities in, around, or that may affect, a Public Rights-of-Way. Grantee shall inform City of any additional proposed construction activities as these activities become known and are scheduled.

(b) If requested by the City, Grantee shall meet with the City annually or as determined by the City, to schedule and coordinate construction in the Public Rights-of-Way. At that time, the City will provide available information on plans for local, state and/or federal construction projects. and

(c) All construction locations, activities and schedules shall be coordinated as ordered by the City Administrator or his/her designee, to minimize public inconvenience, disruption or damage.

(5) Noncomplying Work/Restoration of the Public Rights-of-Way. Whenever Grantee or Grantee’s agent or designee damages or disturbs the Public Rights-of-Way, Grantee shall, at its sole cost and expense, promptly repair and return the Public Rights-of-Way to at least the condition it was in prior to the damage/disturbed state, as required and approved by the City. Restoration shall be completed no more than 30 days after the work is substantially complete, unless otherwise agreed to by the City and Grantee and in reaching such agreement, the parties will take into consideration multiple factors, including but not limited to the availability of resources needed for such restoration. If Grantee fails to repair or return the Public Rights-of-Way to its prior or better condition, City may, upon thirty days’ notice to Grantee, repair the Public Rights-of-Way at Grantee’s sole expense. If requested by Grantee, City shall meet with Grantee prior to making these repairs, provided that the meeting is held within 15 days of the date of the City’s initial notice to Grantee of the City’s intent to proceed with repairs. Upon receipt of demand for payment from the City, Grantee shall promptly reimburse the City for such costs. In addition to the City making repairs, if Grantee fails to repair or return the Public Rights-of-Way to its prior or better condition by the deadline for completion of construction including restoration as set forth in the construction schedule or as otherwise agreed to by Grantee and the City in consideration of multiple factors, including but not limited to the availability of resources needed for such restoration, Grantee agrees to pay $500 per day for each day following the deadline for completion until the work is completed. In no case shall this penalty be due if such restoration could not be timely completed due to the unavailability of necessary resources, notwithstanding Grantee’s good faith efforts to obtain the same. All work which does not comply with the construction permit, the approved or corrected plans and specifications for the work, or the requirements of this Ordinance shall be removed by a Qualified Contractor at the sole expense of Grantee. City shall be provided access to the work site and shall be provided such further information they require to ensure compliance with City requirements.

(6) As-Built Drawings. If requested by the City, Grantee shall furnish City with two (2) complete sets of plans, drawn to scale and certified or in an otherwise agreeable alternative format that the parties agree upon, which accurately depicting the location of all facilities constructed pursuant to the construction permit. These plans shall be submitted to the City Administrator or his/her designee within sixty (60) days after completion of construction, in a format mutually acceptable to the parties.

(7) No Interference. All Gas Facilities of Grantee shall be constructed and laid in such a manner as not to interfere with the use by the City and the public of the Public Rights-of-Way or with any public or private irrigation or drain ditches, sewers, water mains, conduits, sidewalks, paving or other public improvements, or utility structures. Further, if any of Grantee’s Gas Facilities unreasonably interfere with the construction or repair of any Public Rights-of-Way, public improvement or City facility by or on behalf of the City, Grantee’s Gas Facility shall be removed or replaced in coordination with the City. Any and all removal or replacement shall be at Grantee’s sole expense. Should Grantee fail to remove, adjust, or relocate its Gas Facility by the date established by the City, the City may cause such removal, adjustment, or relocation through the use of Qualified Contractors, and the expense thereof shall be paid by Grantee, including all costs and expenses incurred by the City due to Grantee’s delay.

(8) Emergency Operation Provisions. Northwest Natural uses the NIMS Incident Command System (ICS) to manage gas emergencies. Each incident is unique and must be evaluated by the Company’s first responder as to what type of excavation will be required to first make safe and then restore service. Response teams and equipment may vary considerably from incident to incident.

The NW Natural Liaison Officer is a member of the Command Staff and reports directly to the Incident Commander. During an active incident requiring the ICS team a request for a liaison officer can be made to the NW Natural Incident Commander.

The NW Natural Liaison Officer is responsible for inter-agency coordination by providing a point of contact with the assisting and cooperating agencies. This may include fire agencies, Red Cross, law enforcement, public works, etc.

NW Natural is a Local Distribution Company (LDC) regulated by the U.S. Department of Transportation in accordance with the federal statutes in 49 C.F.R. § 192. The Oregon Public Utility Commission regularly inspects NW Natural for compliance with 49 C.F.R. § 192.

Section 10. Location, Relocation, Removal, and Abandonment of Gas Facilities.

(1) All new Gas Facilities of Grantee shall be placed so that they do not unreasonably interfere with the use by the City and the public of the Public Rights-of-Way and are located in accordance with any specifications adopted by the City governing the location of the facilities.

(2) The City may require, in the public interest, the removal or relocation of any Gas Facilities maintained by Grantee, and 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 solely by Grantee. However, when such removal or relocation is required for the sole convenience or benefit of any Person, non-City governmental agency or instrumentality other than the City, Grantee may be entitled to reimbursement for the reasonable cost thereof from such Person, agency or instrumentality, in accordance with applicable law, rule or regulation.

(3) If Grantee shall fail to relocate or remove any Gas Facility as requested by the City by the date established by the City, (i) the City may cause the Gas Facility to be removed by Qualified Contractors at Grantee’s sole expense, and (ii) Grantee shall compensate the City for all costs, damages, claims, and expenses assessed against, or payable by, the City due to the Grantee’s failure to promptly remove, relocate, change or alter its Gas Facilities as directed by the City. Upon receipt of a demand for payment from the City pursuant to this subsection, Grantee shall promptly reimburse the City.

(4) Removal of Unauthorized Gas Facilities. Within ninety (90) days’ written notice from the City, or such additional time as the City may approve in writing, if Grantee owns, controls, or Maintains any portion of the Gas Facilities that is unauthorized, Grantee shall, at its sole cost and expense, remove such Gas Facilities from the Public Rights-of-Way and return the Public Rights-of-Way to its previous condition, or may be authorized at City’s sole discretion to abandon such Gas Facilities as provided in this section 10(5) and (6) of this Franchise. The Gas Facilities, or any portion thereof, is unauthorized in the following circumstances: (i) it was installed without the appropriate authority at the time of installation, (ii) it was installed at a location not permitted by this Franchise or other legally sufficient permit, or location not permitted by this Franchise or other legally sufficient permit, or (iii) it has been abandoned without written permission from the City for abandonment in place. For purposes of this subsection, a portion of the Gas Facilities shall be considered abandoned, when, for a period of ninety (90) days or more, it is deactivated and decoupled from the Gas Facilities or not used consistent with the authority granted under this Franchise. A Gas Facility will not be considered abandoned if it is temporarily out of service during performance of repairs if the Gas Facility is being replaced.

(5) Abandonment. If Grantee intends to permanently abandon a Gas Facility within all or part of a particular portion of the Public Rights-of-Way by physically disconnecting it from its operating System, Grantee shall submit to the City a completed Public Rights-of-Way permit application describing the structures or other Gas Facilities and the date on which Grantee intends to permanently abandon such Gas Facilities. Grantee may elect to remove the abandoned Gas Facilities or request that the City allow them to remain in place. Grantee’s sale of a portion of its System shall not, by itself, be considered abandonment under this section.

(6) Removal or Modification of Abandoned Gas Facilities. Upon receiving notice from Grantee of the intent to abandon a Gas Facility by permanently disconnecting it from its operating system, the City may consent to having the ownership of the abandoned Gas Facilities in the Public Rights-of-Way transfer to the City and, upon such transfer, Grantee shall have no further obligation therefore. Notwithstanding Grantee’s request that any abandoned Gas Facility remain in place, the City may require Grantee to remove the Gas Facility from the Public Rights-of-Way or modify the Gas Facility in order to protect the public health and safety or otherwise serve the public interest. The City Engineer may require Grantee to perform a combination of modification and removal of the Gas Facility. Grantee shall complete such removal or modification in accordance with a reasonable schedule set by the City. The City shall have unlimited discretion in determining a reasonable schedule for removal or modification of the abandoned Gas Facility, based on the City’s consideration of the total circumstances of the schedule. Until such time as Grantee removes or modifies the Gas Facility as directed by the City Engineer, or until the rights to and responsibility for the Gas Facility are accepted by the City or by another Person having authority to construct and maintain Gas Facilities within the Public Rights-of-Way, Grantee shall continue to be responsible for all necessary repairs and relocations of the abandoned Facility, as well as restoration of the Public Rights-of-Way, in the same manner and degree as if the abandoned Facility were in active use, and Grantee shall retain all liability for the abandoned Facility.

Section 11. Compensation.

(1) As compensation for the Franchise granted by this Ordinance, Grantee shall pay to the City an amount equal to five percent (5%) of the gross revenue collected by Grantee from its customers for gas consumed within the City. The franchise fee shall not be deemed to be in lieu of or a waiver of any ad valorem property tax or privilege tax that the City may now or hereafter legally impose. For the purposes of this section, “Gross Revenues” means revenues received from the use of the Gas Facilities within the City Limits, less related net uncollectibles. Gross Revenues shall include revenues from the use, rental, or lease of the Gas Facilities, unless such revenues have already been paid to Grantee by another City franchisee and such paid revenues were used in the calculation of the franchise fee for another franchisee operating within the City Limits or transporting gas through the City to points outside the City boundaries. Gross revenues shall not include proceeds from the sale of bonds, mortgage, or other evidence of indebtedness, securities or stocks, or sales at wholesale by Grantee to any public utility or public agency when the public utility or public agency purchasing the gas is not the ultimate customer. Gross Revenues will also not include public purpose charges, provided that such charges or surcharges are required or authorized by federal or state statute, administrative rule, or by tariff approved by the OPUC and raise revenue used solely for a public purpose and not to compensate Grantee for the sale or use of natural gas or for the use, rental, or lease of Grantee’s Gas Facilities in the City. Public purpose activities include, but are not limited to, energy efficiency programs, market transformation programs, low-income energy efficiency programs, and carbon offset programs designed to benefit residential and commercial customers within Grantee’s service territory in Oregon.

(2) The compensation required by this section shall be due for each calendar year, or fraction thereof, within forty-five (45) 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) Grantee shall furnish to the City with each payment of compensation required by this section a written statement showing the amount of gross revenue, as described in Section 11(1), of Grantee within the City for the period covered by the payment. Compensation for that period shall be based upon the gross revenue so reported. If the Grantee fails to pay the entire amount of compensation due to the City through error or otherwise, the difference due to the City shall be paid by Grantee within thirty (30) 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 Grantee. If Grantee fails to properly report or pay the true amount of gross revenue or other basis from all accounts within the city as determined by the city after investigation or audit, a late payment charge of eighteen percent (18%) per annum and will be owed on the under reported or paid gross revenue calculated from the first day of the calendar year in which the error occurred to the date on which the City receives payment, compounded monthly. The late payment charge shall be due at the same time that any under reported or under paid amount is due. If the under reported or under paid amount is greater than 10 percent of the total compensation due, an additional penalty of 25 percent of the under reported or under paid amount shall be paid in addition to the amount due and the late payment charge.

(4) Acceptance by the City of any amount 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 establishing that a larger amount was actually due, or from collecting any balance due to the City.

(5) New Business. The City specifically reserves the right to impose a fee or tax, as allowed by generally applicable law, on any new business undertaking of Grantee that is operated within the City. The City may otherwise separately regulate and obtain compensation for any other use of the City’s Public Rights-of-Way than those specifically authorized herein. The provisions of this Franchise do not impair the imposition of ad valorem taxes on the property of the Grantee as allowed by law.

(6) Additional Fees and Taxes. Payment of the Franchise Fee under this section shall not exempt Grantee from the payment of any generally applicable license, permit fee, or other generally applicable fee, tax, or charge on the business, occupation, property, or income of Grantee that may be now or hereafter imposed, or from the payment of any reimbursement or indemnity to the City. The City reserves the right to impose and collect any privilege tax in addition to the Franchise Fee set forth in this Franchise to the extent permitted by state and federal law.

Section 12. Books of Account and Reports. Grantee shall keep accurate books of account at an office in Oregon for the purpose of determining Grantee's compliance with all requirements of this Ordinance, including amounts due under Section 11 of this Franchise. The City may inspect the books of account at any time during business hours upon reasonable notice.

City may audit the books from time to time, provided that such audit is for payments that occurred or should have occurred during a period of thirty-six (36) months prior to the date the City notifies the Grantee of its intent to perform an audit or financial review. The Council may require periodic reports from Grantee relating to its operations and revenues within the City.

The City shall have the right to conduct, or cause to be conducted, an audit or financial review of Gross Revenues as defined herein for the purpose of ascertaining whether Grantee’s Franchise Fee payments have met the requirements of this Franchise. The cost of any such audit or financial review shall be borne by the City, unless the results of any such audit or financial review reveal an underpayment of more than five percent (5%) of the Franchise Fee or $1,500.00, whichever is greater, for the period audited or reviewed, in which case the full reasonable cost of such audit or financial review shall be paid by Grantee. In case of any underpayment in the correct amount of compensation due, the City shall be paid the difference due within thirty (30) days of discovery of the error or determination of the correct amount, including the late payment charge and any penalties as set forth in subsection 11(3). Any overpayment to the City through error or otherwise shall be offset against the next payment until satisfied. All books will be made available to authorized representatives of the City at no cost to the City during working hours within thirty (30) days’ written notice from the City to Grantee, or such later date agreed to in writing by the City. All amounts of Franchise Fees paid by Grantee shall be subject to audit or financial review by the City, provided that only payments that occurred or should have occurred during a period of thirty-six (36) months prior to the date the City notifies the Grantee of its intent to perform an audit or financial review shall be subject to such audit or financial review. Neither the City nor Grantee shall be liable or responsible to the other for any underpayment or overpayment that may have occurred more than thirty-six (36) months prior to the date the City notifies the Grantee of its intent to perform an audit or financial review.

Section 13. Collection Facilities. Grantee may maintain facilities in the City where its customers may pay their bills for gas service during normal business hours.

Section 14. Supplying Maps Upon Request. Grantee shall maintain on file at an office in Oregon, maps and operational data pertaining to its operations in the City Limits. Upon reasonable notice, an authorized representative of the City may inspect the maps and data at any time during business hours upon reasonable notice. Grantee and the City may determine that the location of certain Gas Facilities should be confidential as the public interest or applicable law may require. In such a case, Grantee is under no obligation to provide records of the location of these facilities to the City and the City shall treat any public records disclosing the location of these facilities as confidential, subject to the provisions of federal and state law including but not limited to the Oregon Public Records Law, and other applicable 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. Damage to Grantee's Gas Facilities. Unless directly caused by negligent, willful, intentional or malicious acts by the City, the City shall not be liable for any damage to or loss of any Gas Facility within the Public Rights-of-Way of the City as a result of or in connection with any public works, public improvements, construction, excavation, grading, filling, or work of any kind in the Public Rights-of-Way by or on behalf of the City, or for any consequential losses resulting directly or indirectly therefrom.

Section 16. General Indemnification. Grantee shall defend, indemnify and hold the City and its officers, employees, agents and representatives harmless from and against any and all damages, losses or expenses, liabilities, costs, or claims, including reasonable attorney's fees and costs of suit or defense, arising out of, related to, or resulting from or alleged to arise out of, relate to, or result from the negligent or wrongful acts, omissions, failures to act, or misconduct of Grantee or its affiliates, officers, employees, agents, contractors or subcontractors in the construction, operation, maintenance, repair or removal of its system facilities, whether such acts or omissions are authorized, allowed or prohibited by this Ordinance. This duty to indemnify shall not extend to negligent or willful misconduct by City, its officers, agents or employees. This duty to indemnify shall survive the expiration or termination of this Agreement.

Section 17. Assignments or Transfers of Franchise. This Franchise shall not be assigned or transferred without the prior written consent of the City, which consent shall not be unreasonably withheld, conditioned, or delayed, provided the Franchise is transferred or assigned to an entity that controls, is controlled by or is under the common control of the Grantee and has agreed to abide by the terms of this Franchise, including all safety requirements. If the City consents to an assignment or transfer of the Franchise, the transfer or assignment shall not be effective until the assignee or transferee has complied with the requirements in Section 9 and filed a signed acceptance of the terms of this Franchise. Notwithstanding anything in this Franchise to the contrary, Grantee may mortgage this Franchise, together with its Gas Facilities and properties within the City Limits, in order to secure any legal bond issue or other indebtedness of Grantee, with no requirement that the trustees accept this Franchise.

Grantee shall reimburse the City for all direct and indirect fees costs and expenses reasonably incurred by the City in considering a request to transfer or assign the Franchise, including the reasonable costs of the professional consultation on legal, technical or financial issues related to the transfer or assignment.

Section 18. Grantee Insurance.

(1) Grantee shall, as a condition of this grant, secure and maintain throughout the life of this Franchise, the following public liability and property damage insurance policies insuring both the Grantee and the City, and its elected and appointed officers, officials, agents and employees as coinsureds:

(a) Comprehensive general liability insurance covering bodily injury, property damage, and personal injury with limits not less than three million dollars ($3,000,000) for bodily injury or death to each Person, (ii) Three million dollars ($3,000,000) for property damage resulting from any one accident, (iii) Three million dollars ($3,000,000) for all other types of liability, (iv) comprehensive form premises-operations, explosions and collapse hazard, underground hazard and products completed hazard with limits of not less than ten million dollars ($10,000,000), and ten million dollars ($10,000,000) for all claims in the aggregate;

(b) Automobile liability insurance for owned, non-owned and hired vehicles with a limit of one million dollars ($1,000,000) for each Person and three million dollars ($3,000,000) for each accident; and

(c) Workers' compensation within statutory limits and employer's liability insurance with limits of not less than one million dollars ($1,000,000).

(2) The liability insurance policies required by this section shall be subject to any statutory increases in the maximum liability limits imposed on municipalities in the State of Oregon and shall be maintained by Grantee throughout the term of the Franchise and any such other period of time during which Grantee is operating without a Franchise hereunder, or is engaged in the removal of its facilities. No insurance policy shall be cancelled nor the intention not to renew be stated until ninety (90) days after receipt by the City of Junction City, by registered mail, of a written notice addressed to the City Administrator of such intent to cancel or not renew.

(3) Within sixty (60) days after receipt by the City of said notice, and in no event later than thirty (30) days prior to said cancellation, Grantee shall obtain and furnish to the City evidence that Grantee meets requirements of this section.

(4) As an alternative to the insurance requirements contained herein, Grantee may provide evidence of self-insurance subject to review and acceptance by the City.

Section 19. Performance Surety. No bond or other surety shall be required of Grantee at the inception of this Franchise. In the event Grantee is required by the City to obtain a bond or other surety in the future in an amount not to exceed fifty thousand dollars ($50,000), the City agrees to give Grantee at least sixty (60) days’ advance written notice thereof stating the specific reasons for such requirement. Such reasons must demonstrate a change in Grantee's legal, financial or technical qualifications that would materially prohibit or impair Grantee's ability to comply with the terms and conditions of this Franchise. Notwithstanding this section, the City may require a performance bond for the issuance of any permit as provided by Section 9(1) and Chapter 12.15 of the Junction City Municipal Code, if such performance bond is required by the City.

Section 20. Termination of Franchise for Cause. Remedies.

(1) Upon the willful failure of Grantee, after thirty (30) days' notice and demand in writing, to perform promptly and completely each and every term, condition or obligation imposed upon it under or pursuant to this Ordinance, the City may terminate this Franchise, subject to Grantee's right to judicial review in a court of appropriate jurisdiction for reasonableness of the action.

(2) In addition to any other rights set out in this Franchise and in the City of Junction City Code, the City reserves the right, at its sole option, to establish sanctions, which may include imposing a fine not to exceed $500 for each violation of this Franchise. A separate and distinct violation shall be deemed committed each day on which a violation occurs or continues.

Section 21. 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 Grantee by or pursuant to this Ordinance. A specific waiver of a particular breach of any term, condition or obligation imposed upon 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 22. Consent. Wherever the consent of either the City or Grantee is specifically required by this Ordinance, such consent shall not be unreasonably withheld.

Section 23. Confidentiality. The City agrees to use its best efforts to preserve the confidentiality of trade secrets or other information that reasonably may be deemed confidential, as requested by Grantee, to the extent permitted by the Oregon Public Records Law and to the extent consistent with other provisions of this Ordinance.

Section 24. Governing Law. Venue. This Franchise is granted subject to the provisions of the Constitution and laws of the United States and the State of Oregon and the Ordinances and Charter of the City. Any action or suit pertaining to rights and obligations arising from this Ordinance shall be filed in the Circuit Court of Lane County, Oregon.

Section 25. Severability. If any article, section, subsection, sentence, clause, phrase, term, provision, condition, covenant or portion of this Ordinance is for any reason held to be invalid or unenforceable by any court of competent jurisdiction or superseded by state or federal legislation, rules, regulations or decisions, the remainder of the Ordinance shall not be affected thereby but shall be deemed as a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions hereof, and each remaining section, subsection, sentence, clause, phrase, term, provision, condition, covenant and portion of this Ordinance shall be valid and enforceable to the fullest extent permitted by law.

Section 26. Compliance with Laws. Grantee shall comply with all federal and state laws and regulations, including regulations of any administrative agency thereof, as well as all Ordinances, resolutions, rules and regulations of the City heretofore or hereafter adopted or established during the entire term of any Franchise granted under this Ordinance, which are relevant and relate to the subject of this Franchise granted hereunder.

Section 27. Acceptance. The Grantee shall, within sixty (60) days from the date this Ordinance is adopted, file with the City its written unconditional acceptance of this Franchise substantially in the form attached as Exhibit 1. If Grantee fails to do so, this Ordinance shall be voidable at the option of the City.

Section 28: 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 for an additional one year term or until the City grants a new franchise and Grantee accepts it in writing.

Section 29. No Third-Party Beneficiaries. Nothing in this Franchise shall be construed or applied to create rights or grant remedies to any third-party as a beneficiary of this Franchise or any duty or obligation established by this Franchise.

Section 30. Independent Contractor Status. When performing under this Franchise, Grantee shall be an independent contractor, not an agent, employee or representative or business associate of the City. No term or provision of this Franchise or act of the Grantee or its agent shall be construed as changing that status.

Section 31. Representations and Warranties. Each of the Parties to this Franchise represents and warrants that it has full right, power, legal capacity and authority to enter into and perform the parties’ respective obligations hereunder and that such obligations shall be binding upon such Party without the requirement of the approval or consent of any other person or entity in connection therewith.

Section 32. Entire Agreement. This Franchise contains the entire understanding between the Parties with respect to the subject matter herein. There are no representations, agreements or understandings whether oral or written between or among the Parties relating to this subject matter of the Franchise that are not fully expressed herein.

Approved:
________________________		Date: ___________________________
Jason Knope, City Administrator

Exhibit 1

ACCEPTANCE

City of Junction City

City Recorder

PO Box 250

Junction City, OR 97448

This is to advise the City of Junction City, Oregon (the “City”) that Northwest Natural Gas Company (the “Grantee”) hereby accepts the terms and provisions of Ordinance No. _______ passed by the Junction City Council on ______________ (the “Franchise”) granting a Franchise for ten (10) years to Grantee. The Grantee agrees to abide by each and every term of the Franchise, which Franchise shall become effective upon City receipt of the acceptance of this Franchise by NW Natural Gas Company (the “Grantee”).

A current Emergency Response Plan as provided by Section 8(3) of the Franchise is enclosed with this Acceptance.

BY ________________________
(Signature)

________________________
(Print Name)

TITLE: Senior Vice President & General Counsel - Regulation
DATE: ___________________

****************************************************************************************************************

This Acceptance was received by the City of Junction City on ________________.

________________________
City Recorder

Ordinance 1267NORTHWEST NATURAL GAS COMPANY FRANCHISE

Ordinance 1267
NORTHWEST NATURAL GAS COMPANY FRANCHISE