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HomeMy WebLinkAboutOrdinance No. O04-06ORDINANCE NO. 004-06 FRANCHISE ORDINANCE Section I. Authority Pursuant to the City of Lanrcl's general powers including but not limited to the general powers set forth in Title XI of the Montana Constitution and Title 7 of the Montana Code Annotated, specifically Section 7-1-4123(8), MCA, the City of Laurel has the authority to grant franchises to applicants by entering into Franchise Agreements under thc authority of this ordinance subject to provisions contained herein. Section II. Definitions. The following definitions apply herein: A. "Activities" means the installation or maintenance of any assets, structures, or facilities in a public right-of-way within thc City of Laurel. B. "Applicant" means the entity requesting the grant of a Franchise Agreement under this ordinance. C. "City" means the City of Laurel, Montana. D. "Demonstration" means the submission or presentation of any of the following to support an enumerated requirement: I. Verifiable historical data; 2. Studies or reports based upon disclosed data sources; 3. Other forms of demonstrations specifically enumerated in this chapter. E. "Facility or Facilities" include(s), but is not limited to, all structures, equipment, and assets for the operation of railroads and other routes for public conveyances, poles, conduits, tunnels, towers and structures, pipes and wires and appurtenances thereof for transmission and distribution of electrical energy, signals and other methods of communication, for gas, steam and liquid fuels, water, sewer and other private and publicly owned and operated systems for public service. F. "Franchise Agreement" means a bi-lateral contractual agreement, between an applicant and City setting forth the terms and conditions under which the City provides the applicant authority to install and maintain facilities in the public right-of-way. G. "Grantee, Franchisee, Licensee" means an applicant that has been granted a franchise agreement under this ordinance. H. "Utility" means persons or private or municipal corporations owning or operating, or proposing to own or operate, facilities that comprise a system or systems for public service. Section IlL Policy. It is the policy of the City to require all individuals and/or entities who install or maintain facilities in, on, above or below a public right-of-way to comply with the provisions contained in this ordinance in order to obtain a franchise agreement with the City. Section IV. Franchise Agreement. O04-06 Franchise Ordinance 1 A. It shall be unlawful to construct, install, maintain or operate any facility in on, above or below a public right-of-way within the City without a valid and enfomeable franchise agreement obtained hereunder. The City shall not permit or allow the performance of activities in a public right-of-way without first obtaining a permit as provided in the Laurel Municipal Code. No one shall be granted a permit to perform any activities in, on, under, or above the public right-of-way without first obtaining and maintaining a valid franchise agreement. All permits to work in, on, under, or above the public right-of-way will be restricted to activities contained in the respective franchise agreement. B. The franchise agreement shall contain the following: 1. A provision wherein the grantee agrees to indemnify and hold harmless the City from any loss due to damage caused by grantee during the construction, installation, and maintenance of its property, and its use of the public right of way. 2. A provision wherein the grantee agrees to repair damages to any City property or streets caused by grantee. 3. A provision requiting grantee to perform and pay for any construction required for the operation of its system. Any construction shall conform to the Standards for Public Works Improvements and Rules and Regulations Governing Utility Services and Streets for the City to the extent the City's standards, rules and regulations do not conflict with any applicable federal or state law as well as any Montana Public Service Commission regulation of grantee. All work is subject to the Public Works Director's approval and review. Section V. Filing of Applications. Applications for a franchise agreement will be considered pursuant to the procedures set forth herein. For good cause, the City, through the City Council may elect by resolution to waive any requirement set forth herein unless required by law. A. Applications shall be delivered to the City Clerk. The applicant shall pay the City a fee of $1000.00 to reimburse the City for all costs reasonably associated with the processing the application. If the application is in response to a Request for Proposals (RFP) or other public advertisement issued by the City, the applicant shall pay the fee set forth in the public advertisement. The fee herein may be set or adjusted from time to time by the City Council, however, the fee shall be reasonably approximate to reimburse the City for costs and expenses incurred by the City to process the application flied hereunder. Section VI. Content of Applications. An application made pursuant to a RFP or other public advertisement shall contain all the information required in the public advertisement. If an application is not filed pursuant to an RFP, it must contain the minimum information provided under this Section. A. All applicants that are not fully owned by, or a division of, a govenunental agency, whether municipal, state, or federal, shall provide the following: 1. Identification of the applicant and proposed system owner, and, if the applicant or proposed owner is not a natural person, a list of all parmers or stockholders holding 10 percent or more ownership interest in applicant's company and any parent corporation; provided, however, 004-06 Franchise Ordinance 2 when any parent corporation has in excess of 1,000 shareholders and its shares are publicly traded on a national stock exchange, then identification of the parent corporation and its relationship to the subsidiary, if any, shall be provided. An affirmed statement of whether the applicant, or any person controlling the applicant, or any affiliate of said controlling person, including any officer of a corporation or major stockholder thereof, has voluntarily filed for relief under any provision of the bankruptcy laws of the United States (Title 11 of the United States Code), had an involuntary petition filed against it pursuant to the Bankruptcy Code, has been subject of any state law insolvency proceeding such as a transfer for the benefit of creditors or has had a franchise agreement revoked by any other city or town in the United States of America. A demonstration of the applicant's financial ability to construct and operate the proposed system, including, at the City's option: a. For a sole proprietorship or partnership: (i). ^ detailed, complete, and audited financial statement of the applicant, duly certified as true and correct by an executive officer of the company, for the five fiscal years preceding the date of the application hereunder or three years if five years of data is not available); or (ii). A letter or other acceptable evidence in writing from a recognized lending institution or funding source, addressed to both the applicant and the City, setting forth the basis of a study performed by such lending institution or funding source, a statement of the criteria used to evaluate that basis, and a clear statement of its intent as a lending institution or funding source to provide whatever capital shall be required by the applicant to construct and operate the proposed system in the City; or (iii). A statement from an independent certified public accountant, certifying that the applicant has sufficient free, net and uncommitted cash resources to construct and operate the proposed system in the City. b. For a corporation publicly traded on a national stock exchange: (i). A most recent public annual report filed with the Securities and Exchange Commission, or (ii). For a wholly owned subsidiary, the most recent public annual report filed with the Securities and Exchange Commission of the parent corporation along with a statement of the parent corporation's responsibility for the obligations of the subsidiary. B. All applicants shall provide the following: 004-06 Franchise Ordinance 3 A description of the physical facility proposed, the area to be served, a description of the technical characteristics of the existing service facilities and a map of the proposed and existing service system and updates (when available) and distribution scheme. The City shall not rely upon such data for digging and excavating work. 2. A description of how any construction will be implemented, identification of areas having above ground or below ground facilities and the proposed construction schedule. 3. A description of the proposed services to be provided over the system. 4. Information as necessary to demonstrate compliance with all relevant requirements contained in this chapter. An affidavit of the applicant, or duly authorized person, certifying, in a form acceptable to the City, the troth and accuracy of the information contained in the application and acknowledging the enforceability of application commitments. 6. The City shall request updated system maps no later than every three (3) years. Co In the case of an application by an existing grantee for a renewed franchise agreement, a demonstration that said grantee has substantially complied with the material terms of the existing agreement and with applicable law. Do Other information that the city, or its agents, may reasonably request the applicant provide in a timely manner. Section VII. Applicant representatives. Any person or entity who submits an application under this chapter possesses a continuing obligation to notify the City, in writing, of the names, addresses and occupations of all persons who arc authorized to represent or act on behalf of thc applicant in those matters pertaining to the application. The requirement to make such disclosure shall continue until the City has approved or disapproved an applicant's application or until an applicant withdraws its application. Section VIII. Consideration of applications. A. The City shall consider each application for a new or renewed franchise agreement where the application is found to be in substantial compliance with the requirements of this chapter and any applicable RFP. In evaluating an application, the City shall consider, among other things: (1) the applicant's past service record in the City and in other communities, (2) the nature of the proposed facilities and services, (3) the proposed area of service, (4) the proposed rates (if applicable), (5) and whether the proposal would serve the public needs and the overall interests of the City residents. B. In addition, where the application is for a renewed franchise agreement, the City shall consider whether: (1) the applicant has substantially complied with the material terms of the existing franchise agreement and with applicable 004-06 Franchise Ordinance 4 law, (2) the quality of the applicant's service, response to consumer complaints, and billing practices, (3) the applicant has the financial, legal and technical ability to provide the services, facilities, and equipment as set forth in the application, and (4) the applicant's proposal is reasonable to meet the furore community needs and interests, taking into account the cost of meeting such needs and interests. C. If the City determines that an applicant's proposal, including the proposed service area, would serve the public interest, it may grant a franchise agreement to the applicant, subject to terms and conditions as agreed upon between the applicant and the City. No franchise agreement shall be deemed granted unless and until an agreement has been fully executed by the applicant and the city. The franchise agreement will constitute a contract, freely entered into, between the city and the applicant. Each franchise agreement shall be approved by a Resolution of the City Council under the authority of this ordinance. D. In the course of considering an application for a renewed franchise agreement, the City Council shall adhere to all requirements of applicable state and federal laws. Neither the applicant nor the City waives any right it may have under federal or state law by participating in this process. Section VIII. Length of franchise agreement. The period of a franchise agreement shall be as specified in the specific agreement, but it shall not exceed fifteen (15) years. If an applicant seeks authority to operate in the City beyond the term of its franchise agreement, it shall file an application for a new agreement not earlier than thirty six (36) nor later than (30) months prior to the expiration of its term. The City reserves the right to revise this ordinance and any cun'ent or future franchise agreements hereunder if the State of Montana substantially amends, modifies or alters its laws governing the City's duties, powers and/or responsibilities relating to franchises. Section XI. Franchise agreement revocation. A. In addition to all other rights and powers retained by the City under this chapter and any franchise agreement issued pursuant thereto, the City Council reserves the right to revoke and terminate a franchise agreement and all rights and privileges of a grantee in the event of a substantial violation or breach of its terms and conditions. A substantial violation or breach by a grantee includes, but is not limited to, the following: An uncured violation of any material provision of this chapter or an uncured breach of any material provision of the respective franchise agreement or other agreement or permit issued thereunder, or any material rule, order or regulation of the City made pursuant to its power to protect the public health, safety and welfare; An intentional evasion or knowing attempt to evade any material provision of a franchise agreement or practice of any fraud or deceit upon the system customers or upon the City; Failure to begin or substantially complete any system construction or system extension as set forth in a respective franchise agreement; Failure to provide the services promised in the application or specified in a franchise agreement, or a reasonable substitute therefor; 004-06 Franchise Ordinance 5 Failure to restore service after ten (10) consecutive days of interrupted service, except when approval of such interruption is obtained from the City; Misrepresentation of material fact in the application for, or during negotiations relating to, a franchise agreement; or A continuous and willful pattern of grossly inadequate service and failure to respond to legitimate customer complaints; B. None of the foregoing shall constitute a substantial violation or breach if a violation or breach occurs which is without fault of a grantee or occurs as a result of circumstances beyond a grantee's reasonable control. A grantee shall not be excused by economic hardship nor by nonfeasance or malfeasance of its directors, officers, agents or employees; provided, however, that damage to equipment causing service interruption shall be deemed to be the result of circumstances beyond a grantee's control if it is caused by any negligent act or unintended omission of its employees (assuming proper training) or agents (assuming reasonable diligence in their selection), or sabotage or vandalism or malicious mischief by its employees or agents. A grantee shall bear the burden of proof in establishing the existence of such conditions. C. Except in the case of termination pursuant to subsection (A)(5) of this section, prior to any termination or revocation, the City shall provide a grantee with detailed written notice of any substantial violation or material breach upon which it proposes to take action. A grantee shall have a period of sixty (60) days following such written notice to cure the alleged violation or breach, demonstrate to the City's satisfaction that a violation or breach does not exist, or submit a plan satisfactory to the City to correct the violation or breach. If at the end of said period the City reasonably believes that a substantial violation or material breach is continuing and a grantee is not taking satisfactory corrective action, the City may declare a grantee in default, which declaration must be in writing. The City may, in its discretion, provide an additional opportunity for a grantee to remedy any violation or breach and come into compliance with this chapter so as to avoid the termination or revocation. Section XII. Enforcement. Any violation of any provision, or failure to comply with any of the requirements of this chapter, shall be a civil violation subjecting the offender to a civil penalty of up to $100.00 for each of the first five (5) days that a violation exists and up to $500.00 for each subsequent day that a violation exists. Payment of any such monetary penalty shall not relieve any person of the duty to correct the violation as set forth in the applicable notice and order. Any violation existing for a period greater than 30 days may be remedied by the City at the grantor's expense. Section XIII. Date of Applicability, extension of Ordinance No. 653 and current franchises. A. This Ordinance shall become effective thirty (30) days after its final adoption. If an applicant currently operates under a valid franchise agreement approved by the City Council in accordance with Section 7-1-4123(8), MCA, the applicant may continue to operate under its valid agreement until it expires. Prior to expiration, applicant must utilize this ordinance for any subsequent franchise agreements with the City. O04-06 Franchise Ordinance 6 B. In order to provide an orderly and timely application process, the City Council has determined it necessary to extend the expiration date of Ordinance No. 653, for an additional ninety (90) days to provide Montana-Dakota Utilities, Co., a reasonable time to apply for a new franchise agreement under this ordinance. Therefore, Ordinance No. 653's expiration date is hereby extended from August 21, 2004 until November 21, 2004. This Ordinance becomes effective thirty (30) days after final passage by the City Council and approval by the Mayor. Introduced and passed on ftrst reading at a regular meeting of the City Council on July 20 ,2004, by Alderwoman Johnson PASSED and ADOPTED by the Laurel City Council on second reading this 7th of September ,2004, upon motion of Alderman Easton day APPROVED BY THE MAYOR this ATTEST: 7th day of September ,2004. //r~enr~th~. Olson, Jr~ayor Mary .I~mbleton, Clerk-Treasurer S. Painter,-r-r~gal Counsel" ~ Elk River Law Office, P.L.L.P. O04-06 Franchise Ordinance 7