AN ORDINANCE GRANTING TO KANSAS GAS SERVICE, A DIVISION OF ONEOK, INC., ITS SUCCESSORS AND ASSIGNS, A NON EXCLUSIVE NATURAL GAS FRANCHISE AND THE RIGHT AND PRIVILEGE TO CONSTRUC T, USE AND MAINTAIN NATURAL GAS SERVICE LINES IN THE PUBLIC RIGHTS-OF-WAY WITHIN THE PRESENT OR FUTURE CORPORATE LIMITS OF THE CITY OF OTTAWA , KANSAS FOR THE PURPOSE OF SUPPLYI NG NATURAL GAS SERVICES TO THE CITY OF OTTAWA AND ITS INHABITANTS PURSUANT TO K.S.A. 12-2001 ET SEQ., AND REPEALING CONFLICTING ORDINANCES IN WHOLE OR IN PART.
Be it ordained by the Governing Body of the City of Ottawa, Kansas:
1. GRANTING OF FRANCHISE
In consideration of the benefits to be derived by the City of Ottawa, Kansas, (“City”), and its inhabitants, there is hereby granted to Kansas Gas Service (“KGS”), a Division of ONEOK, Inc., operating a system f or the transmission and distribution of natural gas in the State of Kansas, the authority for a period of ten (1O) years from the effective date of this Ordinance, to occupy and use streets, alleys and other public rights-of way in the City, for the placing and maintaining of equipment and property necessary to carry on the business of selling and distributing natural gas to the City and its inhabitants, and through the City and beyond the limits thereof; to obtain the natural gas from available sources ; and do all things necessary and proper to conduct business.
As further consideration for the granting of this franchise, and in lieu of any City occupation license or revenue taxes, KGS shall pay to the City during the term of this franchise five (5%) of the gross receipts from the sale of natural gas and transportation services to all consumers within the City limits, such payments to be made monthly for the preceding month. Gross receipts shall be defined as any compensation or other consideration derived directly or indirectly by KGS from any transportation , distribution, or sale of natural gas to a consumer for any use, including domestic ,commercial, and industrial purposes, and including without limitation interruptible, single, and firm sales; and shall also include all fees or rental received by KGS for the lease or use of pipeline capacity within the corporate limits of the City, however, gross receipts shall not include connection, disconnection and reconnection fees, returned check charges, temporary service charges, and delayed or late payment charges.
3. GAS TRANSPORTATI ON FEES
In addition to the assessment of franchise fees on revenues set forth in Section 2,the City has by separate Ordinance provided for the assessment and collection of franchise fees on all natural gas transported by KGS and by others to any consumer or user within the City through the facilities of KGS located in the public rights-of-way , and such Ordinance includes an assessment for the value of the commodity.. This Ordinance shall provide that the customer transporting gas through the facilities of the Company shall be solely responsible for the payment of any applicable franchise fee associated with the commodity value of the gas, but that through the City’s franchise authority is granted to the Company to collect on behalf of the City the total compensation to be made to the City by other parties using the Company’s facilities for distribution of transport gas. Such franchise assessment shall be compatible- with Company’s billing system. To the extent any transporter using the Company’s facilities fails to pay any amounts owed by transporters under the separate ordinance, Company shall notify the City of such amount and City shall be solely responsible for collecting any sums owed.
The payments and compensation herein provided shall be in lieu of other licenses, charges, and fees, except general ad valorem property taxes and special property assessments, sales and excise taxes or charges, made for privileges which are not connected with the natural gas business, will be imposed and are not covered by the payments herein. From and after the effective date the permit fees required of KGS by any ordinance presently in effect or hereafter adopted for a permit to excavate in any public right-of-way shall be deemed a part of the compensation paid in Section 2 and shall not be separately assessed or collected by the City; in no event, however, shall this provision be interpreted to waive the requirement of notice to the City and the procedural requirements of such permits and/or ordinances.
5. CONSTRUCTION STANDARDS
A. The use of public rights-of-way under this franchise by KGS shall be subject to all rules, regulations and policies now or hereafter adopted or promulgated by the City in the reasonable exercise of its police power. In addition, KGS shall be subject to all rules, regulations and policies of , or hereafter adopted or promulgated by, the City relating to permits, sidewalk and pavement cuts, utility location, construction coordination, and other requirements on the use of the rights-of-way; provided however , that nothing contained herein shall constitute a waiver or be construed as waiving the right of K(?S to oppose, challenge, or seek judicial review of , in such manner as is now or may hereafter be provided by law, any such rules, regulation or policy adopted by the City and, further provided other than the items enumerated in Section 3 herein, that such rules, regulations or policies shall not require the payment of additional fees for use of the right of way.
B. All work performed in the construction, operation, maintenance and repair of the gas system shall be performed in a safe, thorough and reliable manner using materials of good and durable quality. All construction, including installation, shall conform to all applicable federal and state laws and local regulations, ordinances, laws and codes.
C. Any property damaged or destroyed by KGS shall be repaired or replaced by KGS and reasonably restored to its pre-existing condition within a reasonable time. All City standards related to use of public rights-of-way shall be met to the City’s satisfaction, including but not limited to backfill and compaction standards, depth of buried lines, clean up, seeding, etc.
D. Upon its receipt of reasonable advance written notice, not to be less than five (5) business days, KGS shall protect, support, raise, lower, temporarily disconnect, relocate or remove from the public rights-of-way as necessary, any property of KGS when lawfully required by the City by reason of any public improvement. The City shall have the right to require KGS to change the location of any of its system within the public rights-of-way when the public interest or public health, safety or welfare requires such a change, and the expense thereof shall be at no cost to the City.
E. A general obligation of KGS is to attend pre-construction meetings called by the City with a representative knowledgeable of the KGS infrastructure within the City.
6. LOCATION OF MAINS
All mains, services and pipe which are installed or relocated shall be located and laid as not to obstruct or interfere with any water pipes, drains, sewers, or other structures already installed. KGS shall provide .. prior to commencing work, information to the City concerning work to be performed in the streets, alleys and public rights-of-way , as the City requires. The City may require that the information be provided on its standard permit form , but without requiring approval , consent or fees. In the event of an emergency, KGS shall have the right to commence work without having first providing such form(s).
7. REPLACEMENT OF PAVEMENT
KGS shall, in working on gas mains, pipes and services , avoid so far as may be practicable, interfering with the use of any street, alley or public space. KGS shall, without expense to the City, and in a manner satisfactory to the duly authorized representatives of the City, replace such paving or surface in substantially as good condition as before said work was commenced .
8. OBLIGATION TO FURNISH NATURAL GAS
It is recognized that the natural gas to be delivered hereunder is to be supplied from a pipeline system transporting natural gas from distant sources of supply, and that KGS, by its acceptance of this franchise as hereinafter provided, does obligate itself to furnish natural gas in such quantity, quality and length of time, limited by the terms hereof, as the said sources and said pipelines are capable of supplying.
9. HOLD HARM LESS
KGS, its successors and assigns, in the construction, maintenance, and operation of its natural gas system, shall use all reasonable and proper precaution to avoid damage or injury to persons and property, and shall hold and save harmless the City from any and all damage, injury, and expense caused by the negligence of KGS, its successors and assigns, or its or their agents or servants.
10. CITY ORDINANCE
Within 20 days after adoption of this Ordinance by the City, KGS shall file with the City Clerk its written acceptance of this Ordinance. In its letter of acceptance, KGS shall identify the effective date as set forth below and shall begin charging its customers for those fees set forth in Section 2 above on that date.
11. EFFECTIVE DATE
This Ordinance shall become effective, and shall be and become a binding contract between the parties, no later than the first of the monthly billing cycles which begins no later than sixty (60) days after its passage and approval by the City, acceptance by KGS, and publication in the official City newspaper.
12. PRIOR AGREEMENTS
This Ordinance, when accepted as above provided, shall constitute the entire agreement between the City and KGS relating to this franchise and the same shall supersede and cancel any prior understandings, agreements, or representations regarding the subject matter hereof, or involved in negotiations pertaining thereto, whether oral or written, shall be binding upon the parties, including their successors and assigns, and shall not be ended or further obligations imposed without mutual consent of the parties hereto. Any and all Ordinances or parts of Ordinances in conflict with the terms hereof are hereby repealed or considered as having no effect as of the billing cycle referenced in Section 11 of this Ordinance.
13. REQUIRED RECORDS
The City shall have access to and the right to examine during normal business hours, those KGS books, receipts, files, records and documents that are necessary to verify the correctness of payments due hereunder. If it is determined that a mistake was made in the payment of any franchise fee required hereunder , such mistake shall be corrected promptly upon discovery, such that any under-payment by KGS shall be paid within thirty (30) days of the recalculation and any over-payment by KGS shall be discounted from the next payment(s) due.
14. APP LICATION OF ORDINANCE
From and after the effective date of this Ordinance, no natural gas or other energy shall be transported, distributed, or sold by any provider to any consumer for use within the corporate limits of the City through a distribution system located in whole or in part in the public rights-of-way of the City except in accordance with the provisions of this Ordinance. This Ordinance applies to any distribution to a consumer within the City whether or not the portion of the distribution system serving the consumer is in the public rights-of-way so long as any portion of the distribution system of the provider is in the public rights-of-way. Every provider subject to this Ordinance shall obtain a franchise from the City under the provisions of K.S.A. 12-2001 et seq., for the use of distributions systems located in the public rights-of-way.
15. KANSAS CORPORATION COMMISSION FILING
Within twenty (20) days after the passage and approval of this Ordinance, KGS shall file the same with the Kansas Corporation Commission, as required by law.
16. KANSAS CORPORATION COMMISSION ACTION
Should the Kansas Corporation Commission take any action with respect to this Ordinance and any amendment thereto which precludes KGS from recovering from its customers any costs or fees provided for hereunder, the parties hereto shall renegotiate this Ordinance in accordance with the Commission ‘s ruling.
17. TRANSFER OF AGREEMENT
This franchise agreement cannot be assigned or transferred without the prior written consent of the City. Any such transfer without prior City consent shall be void. If however, Oneoak wants to assign this Franchise to a wholly owned subsidiary or affiliate of Oneoak, such assignment shall only require thirty (30) days prior written notice to the City and shall not require City approval.