Ordinance No. 908

AN ORDINANCE GRANTING TO NORTHERN LIGHTS, INC., AN IDAHO CORPORATION, ITS SUCCESSORS AND ASSIGNS, FOR A TERM OF 20 YEARS, A NON-EXCLUSIVE FRANCHISE AND RIGHT TO OWN, HOLD, CONSTRUCT, OR OTHERWISE ACQUIRE, AND TO MAINTAIN AND OPERATE, A NATURAL GAS TRANSMISSION AND DISTRIBUTION SYSTEM IN AND SUPPLY GAS TO NEWPORT, WASHINGTON, AND ITS INHABITANTS, AND FOR SUCH PURPOSES TO OWN, HOLD, CONSTRUCT OR OTHERWISE ACQUIRE AND TO MAINTAIN AND OPERATE WITHIN THE PRESENT AND FUTURE CORPORATE LIMITS OF NEWPORT, WASHINGTON, MAINS, PIPES, CONDUITS, SERVICES AND OTHER NECESSARY APPLIANCES, WORKS AND STRUCTURES AND ALSO TO LAY, TAKE UP, REPAIR, REPLACE, RENEW, EXTEND, MAINTAIN AND OPERATE GAS MAINS, PIPES, CONDUITS AND SERVICES, IN, UPON, OVER, UNDER, ALONG, THROUGH AND ACROSS ALL STREETS, AVENUES, ALLEYS, HIGHWAYS AND OTHER PUBLIC PLACES IN NEWPORT, WASHINGTON, AS THE SAME NOW EXIST OR MAY HEREAFTER BE EXTENDED, LAID OUT OR ESTABLISHED, AND PRESCRIBING THE TERMS AND CONDITIONS THEREOF; PRESCRIBING THE TIMES AND CONDITIONS FOR COMMENCEMENT AND COMPLETION OF CERTAIN WORK HEREUNDER; PRESCRIBING THE METHOD AND MANNER OF PROTECTION OF WORK UNDERTAKEN, CARRIED ON, OR DONE BY THE GRANTEE HEREUNDER IN THE STREETS, AVENUES, ALLEYS, HIGHWAYS AND OTHER PUBLIC PLACES IN SAID CITY AND FOR THE REPAIR OF DAMAGES BY GRANTEE OR ITS PIPES AND MAINS OR BY GAS ESCAPING THEREFROM AND FILING OF BOND, AND FOR GRANTEE’S INDEMNIFYING SAID CITY FOR ALL LOSS OR DAMAGE SUFFERED BY THE CITY CAUSED BY WORK UNDERTAKEN, CARRIED ON, OR DONE BY THE GRANTEE HEREUNDER, REQUIRING THE GRANTEE TO CONFORM TO CERTAIN CITY ORDINANCES; PROVIDING FOR THE FORFEITURE OF THIS FRANCHISE AND GRANT, AND THE GROUNDS, MANNER, TERMS AND CONDITIONS THEREOF; PROHIBITING THE ISSUANCE OF ANY CAPITAL STOCK ON ACCOUNT OF THIS FRANCHISE AND GRANT OR THE VALUE THEREOF; PROVIDING FOR THE ACCEPTANCE OF THIS FRANCHISE AND GRANT BY THE GRANTEE, AND THE TIME, MANNER AND EFFECT THEREOF; RESERVING RIGHTS TO SECURE SAFETY, WELFARE, AND SERVICE; DEFINING THE WORDS “CITY,” “COUNCIL,” AND “GRANTEE” AS USED HEREIN; FORBIDDING THE LEASE, ASSIGNMENT OR OTHER ALIENATION OF THIS FRANCHISE AND GRANT OTHERWISE THAN BY MORTGAGE OR TRUST DEED EXECUTED FOR THE PURPOSE OF OBTAINING MONEY FOR CORPORATE OBJECTS; PROVIDING FOR SEPARABILITY AND CONDITIONS THEREOF AND FOR THE PUBLICATION OF THIS ORDINANCE, AND SPECIFYING THE DATE ON WHICH IT SHALL TAKE EFFECT.

The City Council of the City of Newport, Washington, do ordain as follows:

SECTION 1:

Northern Lights, Inc., a corporation organized and existing under and by virtue of the laws of the State of Idaho, having on February 17, 1998 duly filed with the City Council of the City of Newport, Washington, a written application for a non-exclusive franchise for a term of 20 years, to own, hold, construct, or otherwise acquire, and to maintain and operate, a gas system in and supply gas to the City of Newport, Washington, and its inhabitants, and for such purposes to own, hold, construct, or otherwise acquire, and to maintain and operate within the present and future corporate limits of the City of Newport, Washington, mains, pipes, conduits, services and other necessary appliances, works and structures and also to lay, take up, repair, replace, renew, extend, maintain and operate gas mains, pipes, conduits, and services in, upon, over, under, along, through and across all streets, avenues, alleys, highways and other public places in the City of Newport, Washington, as the same now exist or may hereafter be extended, laid out or established in form, tenor and effect identical with this ordinance, this ordinance having been published in accordance with Washington law.

The City of Newport, Washington, does hereby grant to Northern Lights, Inc., a corporation, its successors and assigns, a non-exclusive franchise for a term of 20 years, to own, hold, construct, or otherwise acquire and to maintain and operate, a gas system in and supply gas to the City of Newport, Washington, and its inhabitants, and for such purposes to own, hold, construct, or otherwise acquire, and to maintain and operate, within the present and future corporation limits of the City of Newport, Washington, mains, pipes, conduits, services and other appliances, works and structures and also to lay, take up, repair, replace, renew, extend, maintain and operate gas mains, pipes, conduits and services, in, upon, over, under, along, through and across all streets, avenues, alleys, highways and other public places in the City of Newport, Washington, as the same now exist or may hereafter be extended, laid out or established; provided, however, that the location of all such conduits, pipes, mains, and other appliances or services, in, along or under said streets, alleys, highways or public places shall at all times be subject to control and regulation of the City.

SECTION 2:

The franchise and grant herein and hereby made to said Grantee, its successors and assigns, is for a term of 20 years from the date this ordinance becomes effective unless sooner abandoned, revoked, terminated, or amended under other provisions herein. In the event significant technological innovations or advancements in the natural gas transmission and distribution industry occur, the City and Grantee agree to conduct good faith negotiations and discussions on the best manner of taking advantage of those advancements. Upon agreement between the parties concerning the necessary adjustments to the Grantee’s franchise obligations, Grantee shall implement those changes.

This franchise and grant are conditioned upon the acceptance and approval by all government agencies, including but not limited to the WUTC and FERC, of any and all applications for permits, licenses, waivers, or other documentation necessary for Grantee to exercise its rights under this franchise and grant. It is also conditioned upon acceptance by Grantee’s members of the plan to offer natural gas services in addition to the services Grantee already provides. If Grantee is unable to obtain said approvals and acceptances after reasonable efforts by Grantee, but in no event longer than the time periods specified in Section 3 herein, unless Grantor agrees in writing to extend the time periods, then said franchise and grant shall be forfeited and neither Grantor nor Grantee shall have any right to seek damages of any type against the other for failure of Grantee to obtain the necessary approvals and acceptances.

SECTION 3:

Work under this franchise shall be commenced in good faith within not more than 24 months from the date of the final passage of this ordinance and if not so commenced within said time this franchise shall be forfeited. Distribution mains sufficient to make merchantable gas available to a substantial majority of the inhabitants of the City of Newport, Washington requesting services, and to a substantial majority of the areas of the City of Newport, Washington requesting services, shall be installed and completed, and such gas in sufficient quantities to supply the same shall be made available within 36 months, subject to such supply being available from the gas transmission line. The natural gas service to be furnished by Grantee to the public and the City hereunder and all rates and charges therefor and all regulations, policies, and conduct of the Grantee applicable thereto shall at all times be fair and reasonable and be subject to all rules, regulations, and orders that may be lawfully prescribed by the regulatory body of the State of Washington having jurisdiction thereof. The City recognizes that Grantee’s rates and charges will be set by the members of Grantee through its Board of Directors and not under the regulation of any government entity. Work under this franchise shall be completed within 36 months from the date of final passage of this ordinance unless such time be extended by resolution of the Council, and if not so completed within said time, said exclusive franchise shall be forfeited. Provided, that the limitations and provisions of this section shall not apply to repairs, maintenance, operation, alterations, additions, replacements or extensions, nor to any work not required by the provisions of this ordinance. Grantee shall provide the City of Newport with an accurate map, plans and specifications showing the location and depth of all pipes and equipment and shall provide the City with all such other information as may be requested by the Mayor, the Public Works Field Supervisor or their designees. Grantee will come in, locate and mark pipes and equipment upon the request of City, without charge.

SECTION 4:

Grantee shall secure a permit for any opening it shall make in the streets, alleys, and public places in the City and shall be subject to all applicable ordinances. Franchisee must file all permit applications deemed necessary by the Public Works Director, including filing detailed plans, specifications and profiles of the intended work, pay all permit fees, and receive such appropriate permits from the City prior to commencing any work in the City limits; provided, however, that in the event of an emergency, Franchisee may do the work immediately so long as a permit is obtained by Franchisee as soon as practicable thereafter. Applications for right-of-way permits shall be presented to the Public Works Department, which applications will require plans, blueprints, cross-sections, or further detailing of any work to be performed, at the Public Works Director’s discretion. All materials and equipment used for restoration work shall be approved by the City. Franchisee agrees to pay the City all reasonable costs and expenses associated with the examination, inspection, and supervision connected with installation or restoration work. The location or relocation of all facilities shall be made under the supervision and with the approval of such representatives as the governing body of the City may designate for such purpose, but not so as unreasonably to interfere with the proper operation of Grantee’s facilities and services. Whenever the City shall pave or repave any street or shall change the grade or line of any street or public place or shall construct or re-construct any conduit, watermain, sewer or water connection or municipal public works or utilities, it shall be the duty of the Grantee when so ordered by the City to change its main, services and other property in the streets or public places at the Grantee’s expense and without cost to the City so as to conform to the established grade or line of such street or public place and so as not to interfere with the conduits, sewers and other mains as constructed or reconstructed. Whenever the City grants a permit for an excavation in a street, alley or other public ground and the work contemplated by the permit may expose gas pipes, mains and appurtenances of the Grantee, the City shall promptly furnish a copy of the permit to Grantee, and the Grantee will pay the reasonable administrative and related costs.

The exercise of privileges by this franchise shall be subject at all times to the police power of the City over its streets and alleys and shall at all times be subject to all ordinances, regulations and specifications of the City including those relating to work and construction in the public streets and relating to material, type, character and method of construction or of repair of the public streets and alleys. The Grantee shall not unnecessarily or unreasonably obstruct the use of or damage any street or alley, and shall within a reasonable time and as early as practicable upon the completion of any construction or repair work, restore all municipal streets and alleys to the same order and condition as they were before the excavation was made insofar as reasonably possible. The Grantee shall be responsible for any obstruction or any defect in any street, alley, or other public place caused by it in the operation and maintenance of its properties occurring at any time and shall promptly remove any such obstruction or defect at its own expense. Any such obstruction or defect which, after proper notice to Grantee demanding removal or repair as the case may be, is not promptly removed or repaired by the Grantee, may be taken care of by the City, and the costs thereof shall be charged against Grantee. In the event payment is not made within thirty (30) days, the Grantor can declare a default under Section 6 herein.

SECTION 5:

 The Grantee shall conform to all present general ordinances now existing, including those concerning the safety, welfare and accommodation of the public, and to any further general ordinances relating thereto or to franchise fees which shall be validly put into effect by the City by its legislative police power. This franchise shall be subject to the right of the City to make all reservations which shall be necessary to secure in the most ample manner, the safety, welfare and accommodations of the public, including among other things, the right to pass and enforce ordinances to protect the public from danger and inconvenience in the operation of any work or the business authorized by the grant of this franchise, and the right to make and enforce all such regulations as shall be reasonably necessary to secure adequate, sufficient and proper service and accommodations to the inhabitants of the City of Newport, Washington.

SECTION 6:

Upon a breach or failure of the Grantee to comply with any of the terms, limitations or conditions of this franchise and grant, the City reserves the right to declare a termination and forfeiture hereof, provided, however, the City shall first give the Grantee written notice of the matters in respect of which Grantee is claimed to be in default, such written notice to be given by personal service or by registered mail to said Grantee at Sandpoint, Idaho. Should Grantee fail to remedy said default within a reasonable time from the date of receipt of such notice, such reasonable time to depend upon the exigencies surrounding the matter set forth in said notice, then and in that event said City may declare the termination and forfeiture of this franchise and grant; and provided, further, that no breach or failure resulting from said acts of God, fire, earthquakes, the elements, or any other causes beyond the Grantee’s control which could not have been reasonably anticipated and prevented by the Grantee, shall create a termination or forfeiture of this franchise and grant, or any of the provisions thereof.

SECTION 7:

Within 60 days after the day on which this franchise and grant takes effect, the Grantee shall file a written acceptance thereof in the office of the City Clerk, and said acceptance shall be attached hereto and also entered on the journal of the Council. The Grantee, by the acceptance of this franchise and grant, agrees to maintain and operate a gas system in the City of Newport, Washington, and furnish a substantial majority of the residents of Newport requesting gas service with an adequate supply of gas and comply with the terms of this franchise and grant.

SECTION 8:

Whenever in this franchise and grant the word “City” is used it shall be construed to mean the City of Newport, Washington, as it now exists or may hereafter exist; the word “Council” shall be construed to mean the City Council of the City of Newport, Washington, as well as any successor legislative body of the City of Newport, Washington; and the word “Grantee” shall be construed to mean the Grantee herein named and Grantee’s successors and assigns. The franchise hereby granted shall not be sold, leased, assigned, or otherwise alienated without the express consent of the City, expressed by ordinance of the City Council passed for that purpose, and no rule of estoppel shall be invoked against the City in case it shall assert the invalidity of any attempted transfer in violation of this section. Such consent shall not be unreasonably withheld. The consent of the City is hereby expressly given to the mortgaging of the gas utility property and facilities of the Grantee within the City, under any presently outstanding or future mortgage or mortgages given to secure any bonds or other bona fide indebtedness of the Grantee, and the purchaser at any foreclosure sale, if approved by the WUTC or other state utilities regulatory body, may operate the properties under this franchise upon complying with the applicable provisions of the City charter, ordinances, regulations, and this franchise. The City reserves the right to invoke any or all provisions of this franchise upon the Grantee’s successors, assigns, judgment creditors, or distributees of facilities or property used in enjoyment of privileges conferred herein, whether or not stated elsewhere, all without waiver of the right to withhold consent not expressly given of any such transfer and/or require a new franchise.

Section 9:

 In the event natural gas at any time shall cease to be available to Grantee for distribution and sale hereunder, Grantee reserves the right to surrender this franchise and in the event of such surrender, forfeiture, or any expiration or termination of this franchise, or in any of such events, Grantee reserves the right to salvage all of its plant, works and facilities.

Section 10:

If any part or parts of this ordinance shall be adjudged by the courts to be unconstitutional or invalid, the same shall not affect the validity of any other part or parts thereof which can be given effect without the part or parts adjudged to be unconstitutional or invalid. The Council of the City of Newport, Washington, declares that it would have passed the remaining parts of this ordinance if it had been known that such other part or parts thereof would be declared unconstitutional or invalid.

SECTION 11:

The Grantee shall at all times fully defend, indemnify and hold the City, its agencies, boards, officers, agents, officials and employees harmless from any and all claims, accidents, losses, damages and liabilities arising from or by reason of any intentional or negligent act, occurrence, or omission of the Grantee, singularly or jointly with others, its representatives, permitees, or employees, in the construction, operation, use or maintenance of any of the Grantee’s gas utility property or facilities and/or enjoyment of any privileges granted by this franchise, or because of Grantee’s performance of franchise obligations. Such indemnity shall include costs of negotiation or defense, any other costs incurred, and reasonable attorney’s fees.

Grantee shall not be responsible for damages determined to arise out of the City’s sole negligence or, in the case where damages are determined to arise out of concurrent negligence of the parties, Grantee’s liability shall extend to damages determined to arise beyond the extent of Grantee’s concurrent negligence only so far as permitted by law.

Whenever any judgment is recovered against the City or any other indemnity for any such liability, loss, costs, or expenses, such judgment shall be conclusive against the Grantee, not only as to the amount of such damage, but as to its liability, provided the Grantee has reasonable notice or actually knew of the pendency of such suit.

Grantee waives all claims for loss, liability, and/or damages against the City of Newport, its agencies, officers, agents, officials or employees, arising out of or in connection with the Grantee’s enjoyment of franchise rights and privileges, or because of Grantee’s performance or franchise obligations. No action, error or omission, or failure to act by the City in connection with administering its rights or duties related to this franchise shall be asserted by the Grantee, directly, indirectly, or by way of seeking indemnification, against the City, its agencies, boards, officers, agents, officials or employees, except where required by law.

It is not the intent of this franchise to acknowledge, create, imply, or expand any duty or liability of the City without respect to its role as franchising authority, in the exercise of its police power or for any other purpose. Any City duty, nonetheless deemed created, shall be a duty to the general public and not to any specific party, group or entity.

Grantee will keep the City as an additional insured on insurance policies to cover liability, damages, causes of action, allegations of such, and all losses including any deductible, from a reputable insurance company or companies reasonably satisfactory to the City and supplying copies of said coverage in an amount of not less than one million dollars ($1,000,000.00) in accord with Section 12.

SECTION 12:

Upon acceptance of this franchise by Grantee and before Grantee shall have any rights hereunder, as a part of the indemnification previously provided in Section 11, but without limiting the foregoing, Grantee shall file with the City, and at all times thereafter maintain in full force and effect at its sole expense, an acceptable policy or policies of liability insurance, including commercial liability insurance, personal injury liability, owners and contractors personal injury liability, broad form property damage, contractual liability, automobile liability (owned; non-owned and hired automobiles), workers compensation and employer liability. The policy or policies shall name as primary insured the Grantee and their capacity as such, their officers, agents and employees. The City and said City and officers, agents and employees shall be named as additional insured, and the policy or policies shall be of no less than one million dollars ($1,000,000.00) annual aggregate limit per occurrence, but shall never be less than the City’s insurance coverage. The insurance policy or policies shall contain contractual liability insurance naming the Grantee and City, and shall insure against the types of liabilities covered by the indemnification and hold harmless provisions.

The policy or policies of insurance shall be maintained by the Grantee and in full force and effect during the entire term of this franchise. Each policy of insurance shall contain a statement on its face that the insurer will not cancel the policy or fail to renew the policy, whether at the request of the Grantee or for other reasons, except after thirty (30) calendar days advance written notice mailed by the insurer to the City Clerk.

SECTION 13:

In the event RCW 35.21.860, as now existing or hereafter adopted or amended, is revoked, or other laws, statutes, rules or regulations are adopted which authorize the City to impose a franchise fee or other charge upon the gas distribution business, then Franchisee agrees to enter into good faith negotiations with the City regarding amending this franchise to provide for the inclusion of a franchise fee; provided, however, that if the City and the Franchisee are unable to reach an agreement within ninety (90) days, this franchise shall terminate.

SECTION 14:

Franchisee agrees to pay a fee or charge to recover the actual and necessary administrative expenses incurred by the City which are directly related to receiving and approving this franchise. In addition, Franchisee shall pay the City all administrative costs incurred by the City in the approval of permits or in the supervision, inspection or examination of all work by Franchisee in the City limits.

SECTION 15:

Franchisee shall prepare and file with the City an emergency management plan for responding to any spill or other emergency condition. The plan shall designate responsible officials and emergency twenty-four (24) hour on-call personnel and the procedures to be followed when responding to an emergency. After being notified of an emergency, Franchisee shall cooperate with the City and make every effort to respond as fast as practical with action to minimize damage and to protect the health and safety of the public. Franchisee agrees to provide training to firefighters when reasonably requested, at least once per year. In addition, Franchisee will make available to the City of Newport, a gas leak sniffing or leak detection unit for use by City officials.

SECTION 16:

Promptly upon receipt of the City’s invoice therefore, the Grantee shall pay all publication costs in connection with the adoption of this ordinance.

SECTION 17:

All notices and other communications hereunder shall be in writing and deemed to have been duly given if delivered by hand or delivery service providing proof of delivery or if mailed (first class or certified, return receipt and postage prepaid) to the following respective addresses:

Northern Lights, Inc.  and	City of Newport
P.O. Box 310	200 So. Washington
Sandpoint, ID 83864	Newport, WA
	99156

or to such other address(es) as the Grantee or the City may specify in a notice delivered in accordance with the terms hereof.

SECTION 18:

This ordinance, upon its passage and approval, and within 1 days thereafter, shall be published in one issue of the Newport Miner, a weekly newspaper of said City, and shall take effect on the 30th day after its passage and approval according to law.

Passed the City Council of the City of Newport, Washington, this 17th day of March 1998.