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HomeMy WebLinkAbout2014-3559 - Ordinance - 03/27/2014ORDINANCE NO: 2014-3559 AN ORDINANCE GRANTING TO ATMOS ENERGY CORPORATION, A TEXAS AND VIRGINIA CORPORATION, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO CONSTRUCT, MAINTAIN, AND OPERATE PIPELINES AND EQUIPMENT IN THE CITY OF COLLEGE STATION, BRAZOS COUNTY, TEXAS, FOR THE TRANSPORTATION, DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID CITY FOR ALL PURPOSES; RESERVING MUNICIPAL AUTHORITY; PROVIDING FOR INDEMNITY TO THE MUNICIPALITY AND INSURANCE BY ATMOS ENERGY CORPORATION; REQUIRING BOOK AND RECORD KEEPING; PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE PUBLIC RIGHTS -OF -WAYS; AND PROVIDING THAT SUCH FEE SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES; PROVIDING AN EFFECTIVE DATE AND TERM; AND REPEALING ALL PREVIOUS GAS FRANCHISE ORDINANCES. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: SECTION 1. DEFINITIONS: 1.1 "City" shall mean the City of College Station, Texas, a Home -Rule Municipal Corporation operating under the laws of the State of Texas. 1.2 "City Council" shall mean the governing body of the City. 1.3 "City Manager" shall mean the City Manager of the City, or his or her duly authorized representative. 1.4 "Company" shall mean the Mid -Tex Division of the Atmos Energy Corporation, a corporation organized and existing under and by virtue of the laws of the State of Texas and Virginia, authorized to transact and actually transacting business in the State of Texas, acting by and through its duly authorized legal representatives. 1.5 "Customer" shall mean any person or organization being billed for gas services, including transportation, whether used by him or her, or by others. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page I L L 1.6 "Emergency" is defined as sudden and unforeseeable damage or malfunction of a portion of the Company's System that creates a threat to life, health, or property. 1.7 "Franchise" shall mean this Ordinance, and all rights and obligations established herein. 1.8 "Gas" shall mean natural gas and any synthetic gas distributed by the Company through its System. 1.9 "Gross Revenues" shall mean: (a) All revenues billed by the Company from the sale of gas to all classes of customers (excluding gas sold to another non -affiliate gas utility in the City for resale to its customers within the City) within the City including base rate revenues and revenues from the Company's purchased gas adjustment tariff; (b) All revenues received by the Company from the transportation of gas through the System to customers located within the City (excluding gas transported to another non -affiliate gas utility in the City for resale to its customers within the City); (c) The value of gas transported by the Company for Transport Customers through the System (excluding gas sold to another non -affiliate gas utility in the City for resale to its customers within the City), with the value of such gas to be established by utilizing the Company's monthly Weighted Average Cost of Gas charged to industrial customers in the Mid -Tex division as reasonably near the time as the transportation services is performed; (d) Contributions in aid of construction; and (e) "Gross Revenues" shall also include state gross receipts tax and the following "miscellaneous charges": to connect, disconnect or reconnect gas and charges to handle returned checks from consumers within the City. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 2 (f) "Gross Revenues" shall not include: i. revenues billed but not ultimately collected or received by the Company; ii. the revenue of any affiliate or subsidiary of the Company; iii. sales tax and franchise fees paid to the City; iv. interest or investment income earned by the Company; and v. monies received from the lease or sale of real or personal property, provided, however, that this exclusion does not apply to the lease of facilities within the Public Rights -of -Way. 1.10 "Public Rights -of -Way" shall mean the area on, below, or above a public roadway, highway, street, sidewalk, alley, waterway, or utility easement of the City, as they now exist or may hereafter be constructed, opened, laid out, or extended within the present limits of the City, or in such territory as may hereafter be added to, consolidated or annexed to the City. 1.11 "System" shall mean all the Company's pipes, pipelines, gas mains, laterals, feeders, regulators, meters, fixtures, connections and any other equipment or instrumentalities used in or incident to providing delivery, transportation, distribution, supply and sales of natural gas for heating, lighting, power, and any other purpose for which natural gas may now or hereafter be used, located within the corporate limits of the City. 1.12 "Transport Customer" shall mean any person or entity for which the Company transports gas through the System to Customers for delivery or consumption within the City. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 3 L SECTION 2. GRANT OF AUTHORITY: 2.1 The City hereby grants to the Company, its successors and assigns, consent to use and occupy the Public Rights -of -Way, for the purpose of laying, maintaining, constructing, protecting, operating, and replacing therein and thereon all or any portion of the System to deliver, transport, and distribute gas in, out of, and through the City for persons, firms, and corporations, including all the general public, and to sell gas to persons, firms, and corporations, including all the general public, within the City corporate limits, as such limits may be amended from time to time during the term of this franchise, said consent being granted for a term ending December 31, 2023. 2.2 The provisions set forth in this Ordinance represent the terms and conditions under which the Company shall construct, operate, and maintain the System. In granting this franchise, the City does not in any manner surrender or waive its regulatory or other rights and powers under and by virtue of the Constitution and statutes of the State of Texas as the same may be amended, nor any of its rights and powers under and by virtue of present or future ordinances of the City. The Company, by its acceptance of this Franchise, agrees that all such lawful regulatory powers and rights as the same may be from time to time vested in the City shall be in full force and effect and subject to the exercise thereof by the City at any time. SECTION 3. CONSTRUCTION, MAINTENANCE, OPERATION & RELOCATION OF COMPANY FACILITIES: 3.1 The Company is hereby authorized to lay, maintain, construct, operate, and replace its pipes, mains, laterals, and other equipment to minimize interference with traffic, place or cause to be placed appropriate barriers to mark excavations or obstructions, and restore to as good a condition as before commencement of work all Public Rights -of -Way that it may disturb. Before any work is commenced, the Company must obtain any permits required by the City for construction within the Public Rights -of -Way in accordance with the ordinances or process in place at the time the work is performed. Under no circumstances shall the Company be required O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 1 4.docx College Station Gas Franchise — Page 4 to pay for any permit. It shall not be necessary for the Company to obtain permits for the laying of service lines from the mainline pipes of the Company to its Customers if no work will take place in Public Rights -of -Way. It shall not be necessary for the Company to obtain a permit in advance of resolving an Emergency. In the event of an Emergency, the Company shall notify the City Manager no later than ten (10) days after the last day of the Emergency, along with information that describes the circumstances of the Emergency. 3.2 In determining the location of the facilities of the City and other users of Public Rights - of -Way, the City shall minimize interference with then existing System facilities and shall instruct other users of Public Rights -of -Way to minimize interference with existing System facilities. The placement of all System facilities shall be subject to the City's approval. In the event of a conflict between the location of the Company's proposed facilities and the location of the existing facilities of the City or other users of Public Rights -of -Way within Public Rights -of - Way that cannot otherwise be resolved, the City or an authorized agent of the City shall resolve the conflict and determine the location of the respective facilities within the Public Rights -of - Way. 3.3 The Company or contractors working on behalf of the Company shall not be required to pay fees for permits that must be obtained from the City for street cutting, street excavation or other work in Public Rights -of -Way in connection with the Company's operations. A copy of the City's annual capital improvements plan ("CIP") shall be made available on the City's website or upon request. The City should notify the Company's local representative of any major change to the CIP. When required by City to remove or relocate its mains, laterals, and/or other facilities lying within Public Rights -of -Way, the Company shall do so as soon as practically possible with respect to the scope of the project. In no event shall the Company be required to remove or relocate its facilities in less than thirty (30) days from the time notice is given to the Company by the City. 3.4 If the City, constructs or alters its sewers, drainage, water lines, other utilities, or the grade or alignment of the Public Rights -of -Way, so as to conflict with System facilities, the Company shall remove or relocate its mains, laterals, and other facilities lying within Public O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 5 Rights -of -Way that are in conflict, at its own expense, unless such work is for the primary purpose of beautification.. However, if such work is being performed because of a private development project, the private developer shall be required to reimburse the Company for the cost of removal or relocation of its facilities. Schedules for this work shall be developed by the designated representatives of the Company and the City. If such representatives cannot agree on the schedule, the City Manager, after consultation with the Company, shall establish a schedule. This schedule shall provide for a minimum of thirty (30) days between the time the schedule is furnished to the Company and the time that any specific work to be done by the Company covered in the schedule is to begin. When the Company is required by the City to relocate its facilities, the City shall work with the Company to obtain a safe and suitable alternative location. The Company shall not be required to relocate facilities to a depth of greater than four (4) feet unless prior agreement is obtained from the Company. 3.5 When the Company is required by the City to remove or relocate its mains, laterals, and other facilities lying within Public Rights -of -Way to accommodate a request by City, and costs of utility removals or relocations are eligible under federal, state, county, local or other programs for reimbursement of costs and expenses incurred by the Company as a result of such removal or relocation, and such reimbursement is required to be handled through the City, the Company costs and expenses shall be included in any application by the City for reimbursement if the Company submits its cost and expense documentation to the City prior to the filing of the application. The City shall provide reasonable written notice to the Company of the deadline for the Company to submit documentation of the costs and expenses of such relocation to the City. In the event that the City does not provide sufficient written notice to Atmos Energy as set forth in this paragraph, the City shall be responsible for fifty percent (50%) of the cost of the removal or relocation of Atmos Energy's facilities. 3.6 When the Company is required to remove or relocate its mains, laterals or other facilities to accommodate construction by the City without reimbursement from the City, the Company shall have the right to seek recovery of relocation costs as provided for in applicable state and/or federal law. Nothing herein shall be construed to prohibit, alter, or modify in any way the right of the Company to seek or recover a surcharge from Customers for the cost of relocation O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 6 L pursuant to applicable state and/or federal law. The City shall not oppose recovery of relocation costs when the Company is required by the City to perform relocation. The City shall not require that the Company document request for reimbursement as a pre -condition to recovery of such relocation costs. Notwithstanding any provision of this Franchise, the City shall have the right to participate and challenge any other capital costs or expenses of the Company and request full documentation to the full extent provided by state law. 3.7 If the City abandons any Public Rights -of -Way in which the Company has facilities, such abandonment shall be conditioned on the Company's right to maintain its use of the former Public Right -of -Way and on the obligation of the party to whom the Public Right -of -Way is abandoned to reimburse the Company for all removal or relocation expenses if the Company agrees to the removal or relocation of its facilities following abandonment of the Public Right -of - Way. If the party to whom the Public Right -of -Way is abandoned requests the Company to remove or relocate its facilities and the Company agrees to such removal or relocation, such removal or relocation shall be done within a reasonable time at the expense of the party requesting the removal or relocation. If relocation cannot practically be made to another Public Right -of -Way, the expense of any right-of-way acquisition shall be considered a relocation expense to be reimbursed by the party requesting the relocation. 3.8 If a meter is installed in or near the Public Rights -of -Way, the Company agrees to discuss with the City Engineer or his delegate the aesthetics of the meter placement. If agreement cannot be reached, the Company may install standard equipment. 3.9 The Company shall be required to extend distribution mains in any street up to one hundred (100) feet for any one residential customer, provided, however, if the Company determines the anticipated connected load will prohibit the Company a reasonable return on its investment as may be allowed by statute, law, or regulation and the provision of service is not economically feasible, the cost of such extension shall be borne by the customer. The Company shall not be required to extend transmission mains in any Public Rights -of -Way or to make a tap on any transmission main within the City unless the Company agrees to such extension by a written agreement between the Company and a customer. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 7 3.10 The Company hereby agrees that it will not arbitrarily refuse to provide service to any Customer that it is economically feasible for the Company to serve if the Customer to be benefitted will pay the cost thereof or if it can be shown that the revenue resulting from such extension will, within a reasonable time after same is made, pay a reasonable return on the Company's investment, after making the customary allowance for depreciation. 3.11 The Company shall furnish reasonably adequate service to Customers as reasonable rates and charges therefor, and the Company shall maintain its System in good order and condition. Such rates shall be established in accordance with all applicable statutes and ordinances. The Company shall maintain on file with the City copies of its current tariffs, schedules or rates and charges and service rules and regulations applicable to the City. The rates and charges collected from Customers shall be subject to revision and change by either the City or the Company in the manner provided by law. SECTION 4. INDEMNITY & INSURANCE: 4.1 IN CONSIDERATION OF THE GRANTING OF THIS FRANCHISE, THE COMPANY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE CITY, ITS OFFICERS, AGENTS, EMPLOYEES, BOARDS AND COMMISSIONS (THE "INDEMNITEES") FROM AND AGAINST ALL SUITS, ACTIONS OR CLAIMS OF INJURY TO ANY PERSON OR PERSONS, OR DAMAGES TO ANY PROPERTY BROUGHT OR MADE FOR OR ON ACCOUNT OF ANY DEATH, INJURIES TO, OR DAMAGES RECEIVED OR SUSTAINED BY ANY PERSON OR PERSONS OR FOR DAMAGE TO OR LOSS OF PROPERTY ARISING OUT OF, OR OCCASIONED BY THE COMPANY'S INTENTIONAL AND/OR NEGLIGENT ACTS OR OMISSIONS IN CONNECTION WITH THE COMPANY'S OPERATIONS, EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE SOLE NEGLIGENCE OR INTENTIONAL ACTS OR OMISSIONS OF THE CITY, ITS OFFICERS, AGENTS OR EMPLOYEES. IN THE O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 8 Car EVENT OF JOINT AND CONCURRENT NEGLIGENCE OR FAULT OF BOTH THE CITY AND THE COMPANY, RESPONSIBILITY AND INDEMNITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT, HOWEVER, WAIVING ANY NECESSARY CONSENT TO SUIT OR GOVERNMENTAL IMMUNITY AVAILABLE TO THE CITY UNDER TEXAS LAW AND WITHOUT WAIVING ANY OF THE DEFENSES OF THE PARTIES UNDER TEXAS LAW. FURTHER, IN THE EVENT OF JOINT AND CONCURRENT NEGLIGENCE OR FAULT OF BOTH THE CITY AND THE COMPANY, RESPONSIBILITY FOR ALL COSTS OF DEFENSE SHALL BE APPORTIONED BETWEEN THE CITY AND THE COMPANY BASED UPON THE COMPARATIVE FAULT OF BOTH. C 4.2 The Company's insurance of its obligations and risks undertaken pursuant to this franchise may be in the form of self-insurance to the extent permitted by applicable law, under a Company plan of self-insurance maintained in accordance with sound accounting and risk - management practices. SECTION 5. NON-EXCLUSIVE FRANCHISE: The rights, privileges, and franchises granted by this ordinance are not to be considered exclusive, and the City hereby expressly reserves the right to grant, at any time, like privileges, rights, and franchises as it may see fit to any other person or corporation for the purpose of transporting, delivering, distributing, or selling gas to and for the City and the inhabitants thereof. SECTION 6. PAYMENTS TO CITY: 6.1 Except as provided in Section 6.3 below, the Company, its successors and assigns, agrees to pay and the City agrees to accept, on or before the 15th day of May, August, November, 2014 and February, 2015, and on or before the same days of each succeeding year during the term of this Franchise the last payment of the initial term being made on the 15th day of February, 2024, a sum of money which shall be equivalent to five percent (5%) of the Gross Revenues received by the Company during the preceding calendar quarter. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 9 L 6.2 The initial payment for the rights and privileges herein provided shall be for the privilege period January 1 through March 31, 2014, and each succeeding payment shall be for the privilege period of the calendar quarter preceding the quarter in which the payment is made. 6.3 The franchise fee amounts based on CIAC shall be calculated on an annual calendar year basis, i.e. from January 1 through December 31 of each calendar year. The franchise fee amounts that are due based on CIAC shall be paid at least once annually on or before April 30 each year based on the total CIAC recorded within the corporate limits of the City during the preceding calendar year. The final payment of franchise fee amounts based on CIAC will be April 30, 2024. 6.4 Payments received after the due date shall be subject to interest charged at the rate for Customer deposits under the Texas Utilities Code Section 183.003 in effect for the time period involved, from such due date until payment is received by the City. 6.5 The Company shall provide a report with each payment which sets forth the total, in dollars and cents, of the Gross Revenues. At a minimum, the report will show, by Customer class, Gross Revenues and resulting franchise fee attributable to the sale of gas and other miscellaneous charges. In addition, the report will show the amount of franchise fee collected from transportation customers attributable to the value of gas transported for the customers. 6.6 It is also expressly agreed that the aforesaid payments shall be in lieu of any and all other and additional occupation taxes, easement, franchise taxes or charges (whether levied as an ad valorem, special, or other character of tax or charge), municipal license, permit, and inspection fees, bonds, street taxes, and street or alley rentals or charges, and all other and additional municipal taxes, charges, levies, fees, and rentals of whatsoever kind and character that the City may now impose or hereafter levy and collect from the Company or the Company's agents, excepting only the usual general or special ad valorem taxes that the City is authorized to levy and impose upon real and personal property. If the City does not have the legal power to agree that the payment of the foregoing sums of money shall be in lieu of taxes, licenses, fees, street or alley rentals or charges, easement or franchise taxes or charges aforesaid, then the City agrees O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 10 c. c. that it will apply so much of said sums of money paid as may be necessary to satisfy the Company's obligations, if any, to pay any such taxes, licenses, charges, fees, rentals, easement or franchise taxes or charges aforesaid. 6.7 If the Company should at any time after the effective date of this Ordinance agree to a new municipal franchise ordinance, or renew an existing municipal franchise ordinance, with another municipality in the Company's Mid -Tex Division, which municipal franchise ordinance determines the franchise fee owed to that municipality for the use of its public rights-of-way in a manner that, if applied to the City, would result in a franchise fee greater than the amount otherwise due the City under this Ordinance, then the franchise fee to be paid by the Company to the City pursuant to this Ordinance may, at the election of the City, be increased so that the amount due and to be paid is equal to the amount that would be due and payable to City were the franchise fee provisions of that other franchise ordinance applied to City. The City acknowledges that the exercise of this right is conditioned upon the City's acceptance of all terms and conditions of the other municipal franchise in toto. The City may request waiver of certain terms and Company may grant, in its sole reasonable discretion, such waiver. 6.8 The Company may file with the City a tariff or tariff amendment(s) to provide for the recovery of the franchise fees under this agreement. 6.9 The City agrees that (i) as regulatory authority, it will adopt and approve the ordinance, rates or tariff which provide for 100% recovery of such franchise fees as part of the Company's rates; (ii) if the City intervenes in any regulatory proceeding before a federal or state agency in which the recovery of the Company's franchise fees is an issue, the City will take an affirmative position supporting 100% recovery of such franchise fees by the Company and; (iii) in the event of an appeal of any such regulatory proceeding in which the City has intervened, the City will take an affirmative position in any such appeals in support of the 100% recovery of such franchise fees by the Company. 6.10 The City agrees that it will take no action, nor cause any other person or entity to take any action, to prohibit the recovery of such franchise fees by the Company. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 11 c. SECTION 7. BOOKS AND RECORDS: 7.1 The Company shall keep complete and accurate books of accounts and records of its business and operations under and in connection with this Franchise. All such books of accounts and records shall be kept at the Company's principal office. Upon request of the City, the Company shall present any and all records, accounts and books for inspection relative to the Gross Revenues of the Company within the corporate limits of the City. The City may, if it sees fit, upon reasonable notice to the Company, have the books and records of the Company examined by a representative of the City to ascertain the correctness of the reports agreed to be filed herein. The Company shall make available to the auditor such personnel and records as the City may request in order to complete such audit, and shall make no charge to the City therefore. The Company shall assist the City in its review by providing all requested information no later than fifteen (15) days after receipt of a request. 7.2 The City may conduct an audit or other inquiry or may pursue a cause of action in relation to the payment of the franchise fee only if such audit, inquiry or pursuit of a cause of action concerns a payment made less than two (2) years before the commencement of such audit, inquiry or pursuit of a cause of action. Each party shall bear its own costs of any audit or inquiry, unless, if after receiving written notice from the City of the City's intent to perform an audit, the Company fails to provide data, documents, reports, or information required to be furnished or fails to reasonably cooperate with the City during an audit properly performed, the Company shall be liable for payment of the City's reasonable and necessary expenses (including reasonable attorney's fees) incurred in obtaining such data, documents, reports or information. 7.3 In the event that a dispute arises regarding an audit performed on the Company's books and records, the Company agrees to participate in mediation in an attempt to resolve the dispute. The Company agrees that it will consult with the City and the parties will mutually agree on a mediator to preside over the mediation. 7.4 The Company shall keep and maintain complete books, records, accounts, documents and papers pertaining to the Company's System and all the underlying books, records and working O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 12 papers on which the Gross Revenue calculations were based in accordance with the Company's record retention policy or for a period of four (4) years, whichever is greater. SECTION 8. TERMINATION: 8.1 Right to Terminate: In addition to any rights set out elsewhere in this Franchise, the City reserves the right to terminate the Franchise and all rights and privileges pertaining thereto, in the event that the Company violates any material provision of the Franchise. 8.2 Procedures for Termination: The City may, at any time, terminate this Franchise for a continuing material violation by the Company of any of the substantial terms hereof. In such event, the City shall give to the Company written notice, specifying all grounds on which termination or forfeiture is claimed, by registered mail, addressed and delivered to the Company at the address set forth herein. The Company shall have sixty (60) days after the receipt of such notice within which to cease such violation and comply with the terms and provisions hereof. In the event the Company fails to cease such violation or otherwise comply with the terms hereof, then the Company's Franchise is subject to termination under the following provisions; provided, however, that, if the Company commences work or other efforts to cure such violations within thirty (30) days after receipt of written notice and shall thereafter prosecute such curative work with reasonable diligence until such curative work is completed, then such violations shall cease to exist, and the Franchise will not be terminated. 8.3 Termination shall be declared only by written decision of the City Council after a public proceeding whereby the Company is afforded the full opportunity to be heard and to respond to any such notice of violation or failure to comply. The Company shall be provided at least fifteen (15) business days' prior written notice of any public hearing concerning the termination of the Franchise. In addition, ten (10) days notice by one time publication shall be given of the date, time and place of any public hearing to interested members of the public, which notice shall be paid for by the Company. O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 13 8.4 The City, after full public hearing, and upon finding material violation or failure to comply, may terminate the Franchise or excuse the violation or failure to comply, upon a showing by the Company of mitigating circumstances or upon a showing of good cause of said violation or failure to comply as may be determined by the City Council. 8.5 Nothing herein stated shall preclude the Company from appealing the final decision of the City Council to a court or regulatory authority having jurisdiction. The effective date of such termination shall be either when the appeal is dismissed, withdrawn or when a court order upholding the termination becomes final and unappealable. Until the termination becomes effective the provisions of this Franchise shall remain in effect for all purposes. 8.6 Nothing herein stated shall prevent the City from seeking to compel compliance by suit in any court of competent jurisdiction if the Company fails to comply with the terms of this franchise after due notice and the providing of adequate time for the Company to comply with said terms. SECTION 9. NO THIRD PARTY BENEFICIARIES: The Franchise is made for the exclusive benefit of the City and the Company, and nothing herein is intended to or shall confer any right, claim or benefit in favor of any third party. SECTION 10. SUCCESSORS AND ASSIGNS: No assignment or transfer shall be made in whole or in part except in the case of assignment or transfer to an affiliate, parent, or subsidiary of the Company without approval of the City Council. Notice of said transfer or assignment shall be provided to the City. City shall grant approval unless the assignee is materially weaker than Company. For the purpose of this Section, "materially weaker" means that the long term unsecured debt rating of the assignee is less than investment grade as rated by both S&P and Moody's. If the assignee is materially weaker, the City may request additional documents and information reasonably related to the transaction and the legal, financial, and technical qualifications of the assignee. City agrees that said approval shall not be unreasonably withheld or delayed. Upon approval, the rights, privileges and franchise herein granted to the Company shall extend to and include all successors and assigns. The terms, conditions, provisions, O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 14 requirements and agreements contained in this Franchise shall be binding upon the successors and assigns of the Company. SECTION 11. SEVERABILITY: This Ordinance and every provision hereof shall be considered severable, and the invalidity and unconstitutionality of any other portion of this Ordinance shall not affect the validity or constitutionality of any other portion of this Ordinance. If any term or provision of this ordinance is held to be illegal, invalid or unenforceable, the legality, validity or unenforceability of the remaining terms or provisions of this Ordinance shall not be affected thereby. SECTION 12. ACCEPTANCE OF FRANCHISE: In order to accept this Franchise, the Company must file with the City Secretary its written acceptance of this Franchise within sixty (60) days after its final passage and approval by City. If such written acceptance of this Franchise is not filed by the Company, the franchise ordinance shall be rendered null and void. SECTION 13. REPEAL: When this Franchise becomes effective, all previous ordinances of City granting franchises for gas delivery purposes that were held by the Company shall be automatically canceled and annulled, and shall be of no further force and effect. SECTION 14. PARAGRAPH HEADINGS. CONSTRUCTION: The paragraph headings contained in this Ordinance are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs hereof. Both parties have participated in the preparation of this Ordinance and this Ordinance shall not be construed either more or less strongly against or for either party. SECTION 15. NOTICES: Any notices required to be sent to the parties under this Franchise shall be sent to the following: CITY COMPANY City Manager Public Affairs Manager P.O. Box 9960 297 N. Earl Rudder Freeway College Station, Texas 77842 Bryan, Texas 77802 O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 15 i, SECTION 16. EFFECTIVE DATE: If the Company accepts this Ordinance, it becomes effective after sixty (60) days following its second and final passage by the City Council pursuant to Section 105 of the College Station City Charter. PRESENTED AND GIVEN first reading on the 13th day of March, 2014, at a regular meeting of the City Council of the City of College Station, Texas; and given a second reading and PASSED AND APPROVED on this the 27th day of March, 2014. ATTEST: City Secreta Nancy Berry, Mayor City of College Station, Texas 0:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 16 CSTATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION 0 § § I, SHERRY MASHBURN, City Secretary of the City of College Station, Brazos County, Texas, do hereby certify that the above and foregoing is a true and correct copy of an ordinance passed by the City Council of the City of COLLEGE STATION, Texas, at a regular session, held on the 27th day of March, 2014, as it appears of record in the Minutes in Book Zaly page 201 U -3-Z.7 WITNESS MY HAND AND SEAL OF SAID CITY, this the 2941 day of /Qh C—I') , 2014. City Secr City of O:\2 CONTRACTS\Franchises\Atmos\Atmos Franchise Final 2 27 14.docx College Station Gas Franchise — Page 17 ge Station, Texas STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION I, Sherry Mashburn, City Secretary of the City of College Station, Texas, do hereby certify that the above and foregoing is a true and correct copy of a formal acceptance of a franchise ordinance finally passed and approved by said City on March 27, 2014, and of record in the Minutes of the City; and I do further certify that said acceptance has been duly presented to the City Council and filed in connection with and as a part of said franchise ordinance. OF WHICH, witness my official signature and the seal of said City on this the o5,444 day of Pk/IL, , 2014. f Sherry Mashburn, City Secretary City of College Station, Texas STATE OF TEXAS § § COUNTY OF DALLAS § WHEREAS, there was finally passed and approved on March 27, 2014, Ordinance No. 2014-3559 granting to Atmos Energy Corporation, its successors and assigns, a franchise to furnish and supply gas to the general public in the City of College Station, Brazos County, Texas, for the transporting, delivery, sale and distribution of gas in, out of and through said municipality for all purposes, which is recorded in the Minutes of the City Council of said City; and WHEREAS, Section 12 of said ordinance provides as follows: "SECTION 12. ACCEPTANCE OF FRANCHISE: In order to accept this Franchise, the Company must file with the City Secretary its written acceptance of this Franchise within sixty (60) days after its final passage and approval by City. If such written acceptance of this Franchise is not filed by the Company, the franchise ordinance shall be rendered null and void." AND, WHEREAS, it is the desire of Atmos Energy Corporation, the holder of the rights, privileges and grants under the aforesaid franchise ordinance, to comply with the above -quoted provisions of Section 12 thereof. NOW, THEREFORE, Atmos Energy Corporation, acting by and through its duly authorized officers, does hereby agree to and accept the franchise granted to it by the above-described ordinance, in accordance with its terms, provisions, conditions and requirements and subject to the stipulations and agreements therein contained. WITNESS THE EXECUTION HEREOF, on this the 1 '11-4\ day of April, 2014. Atmos Energy Corporation Vice President, Mid -Tex Division