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Ordinance 2007-02 ORDINANCE NO. 2007-02
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 WYLIE,
COLLIN COUNTY, TEXAS, FOR THE TRANSPORTATION,
DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND
THROUGH SAID CITY FOR ALL PURPOSES; PROVIDING FOR THE
PAYMENT OF A FEE OR CHARGE FOR THE USE OF RIGHTS-OF-
WAYS; AND PROVIDING FOR REPEALING AND SEVERABILITY
CLAUSES; AND PROVIDING FOR AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS:
SECTION 1. GRANT OF AUTHORITY:
1.1 Permission. The City of Wylie, Texas, hereinafter called "City," hereby grants to Atmos
Energy Corporation, its successors and assigns, hereinafter called "Atmos Energy,"
consent to use and occupy the surface and the space below any present and future streets,
alleys, highways, public utility easements, public ways and other public places (the
"Rights-of-Way" or "ROW"), for the purpose of laying, maintaining, constructing,
protecting, operating, and replacing therein and thereon pipelines and all other
appurtenant equipment to deliver, transport, and distribute gas in, out of, and through
City for persons, firms, and corporations, including all the general public, and to sell
natural gas (hereinafter "gas" means "natural gas") to persons, firms, and corporations,
including all the general public, within the City's corporate limits, as such limits may be
amended from time to time during the term of this franchise (the "System"). This
consent or grant does not grant to Atmos Energy the right, privilege or authority to
engage in any other business within the City other than the provision of gas sales,
transportation, distribution and the furnishing of gas to the City and its residents
("residents" meaning all persons, businesses, industry, governmental agencies, and any
other entity whatsoever, located, in whole or part, within the City that are or may be
served by Ahnos Energy hereunder).
1.2 Non-Exclusive Use. This Ordinance (hereinafter referred to as "AgreemenY') does not
provide Atmos Energy with exclusive use of the ROW, and City shall have the right to
permit other providers of services to install equipment or devices in the ROW. Nothing
in this Agreement shall be construed to obligate the City to grant Atmos Energy
permission to use any particular facility, property, or right-of-way not covered by this
Agreement.
1.3 No Prioritv. This Agreement does not establish any priority for the use of the ROW by
Atmos Energy or by any present or future recipients of franchise agreements, easement
holders or other permit holders. In the event of any dispute as to the priority of use of the
Ordinance No. 2007-02 Page 1
Atmos Franchise Agreement
466644.v2
ROW, the priority shall be determined by the City in the exercise of its powers, including
the police power and other powers reserved to and conferred on it by the State of Texas.
1.5 Compliance with Law. Atmos Energy shall be subject to and comply with all applicable
and controlling local, state and federal laws, including the rules and regulations of any
and all agencies thereof, whether presently in force or whether enacted or adopted at any
time in the future. In constructing, maintaining and/or operating the System, Atrnos
Energy shall act in a good and workmanlike ma.nner, observing high standards of
engineering and workmanship and using materials of good and durable quality. In
addition, Atmos Energy shall comply, in all respects, with applicable codes and industry
standards.
1.6 In Lieu of Other Fees. It is expressly agreed that the payments provided for in Section 5
below 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 City may now impose or
hereafter levy and collect from Atmos Energy or Atmos Energy's agents, excepting only
the usual general or special ad valorem taxes that City is authorized to levy and impose
upon real and personal property. If the City does not have the legal power to agree that
such payments shall be in lieu of taxes, licenses, fees, street or alley rentals or charges,
easement or franchise taxes or charges aforesaid, then City agrees that it will apply so
much of said sums of money paid as may be necessary to satisfy Atmos Energy's
obligations, if any, to pay any such taxes, licenses, charges, fees, rentals, easement or
franchise taxes or charges aforesaid.
1.7 Right of Condemnation Reserved. Nothing in this Agreement shall limit any right the
City may have to acquire by eminent domain any real property of Atmos Energy.
SECTION 2. CONSTRUCTION, MAINTENANCE, OPERATION & RELOCATION OF
ATMOS ENERGY FACILITIES:
2.1 General Provisions. Atmos Energy shall lay, maintain, construct, operate, and replace
its System to minimize interference with traffic, place or cause to be placed appropriate
barriers to mark excavations or obstructions, and restore to substantially the same
condition all Rights-of-Way that it may disturb. In determining the location of the
facilities of the City and other users of Rights-of-Way within City, City shall minimize
interference with then existing facilities of Atmos Energy and shall require other users of
Rights-of-Way to minimize interference with existing facilities of Atmos Energy in
accordance with City ordinances. In the event of a conflict between the location of the
proposed facilities of Atmos Energy and the location of the existing facilities of City or
other users of Rights-of-Way within Rights-of-Way that cannot otherwise be resolved,
City or an authorized agent of City shall resolve the conflict and determine the location of
the respective facilities within the Rights-of-Way.
Ordinance No. 2007-02 Page 2
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_.,a_ 2.2 Relocation. When Atmos Energy is required by City to remove or relocate its mains,
laterals, and other facilities to accommodate construction of streets, drainage facilities,
alleys and other improvements by City, and Atmos Energy is eligible under federal, state,
county, local or other programs for reimbursement of costs and expenses incurred by
Atmos Energy as a result of such removal or relocation, and such reimbursement is
required to be handled through City, Atmos Energy costs and expenses shall be included
in any application by City for reimbursement, if Atmos Energy submits its cost and
expense documentation to City prior to the filing of the application. City shall provide
reasonable notice to Atmos Energy of the deadline for Atmos Energy to submit
documentation of the costs and expenses of such relocation to City. If Atmos Energy is
required by City to remove or relocate its mains, laterals, or other facilities for any reason
other than the construction of streets, alleys, drainage systems or other improvements to
the Public Rights-of-Way by City that are not primarily for beautification or the benefit
of a third party, Atmos Energy shall be entitled to reimbursement from City or others of
the cost and expense of such removal or relocation. When Atmos Energy is required to
remove or relocate its mains, laterals or other facilities to accommodate construction by
City without reimbursement from City, Atmos Energy shall have the right to seek
recovery of relocation costs as provided for in applicable state and/or federal law.
2.3 Abandonment. If City abandons any Right-of-Way in which Atmos Energy has facilities,
such abandonment shall be conditioned on Atmos Energy's right to maintain its use of
the former Right-of-Way and on the obligation of the party to whom the Right-of-Way is
y' abandoned to reimburse Atmos Energy for all removal or relocation expenses if Atmos
Energy agrees to the removal or relocation of its facilities following abandonment of the
Right-of-Way. If the party to whom the Right-of-Way is abandoned requests Atmos
Energy to remove or relocate its facilities and Atmos Energy 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 Right-of-Way, the expense of any right-of-way acquisition shall be
considered a relocation expense to be reimbursed by the third party requesting the
relocation. The reservation of a utility easement of sufficient width to enable Atmos
Energy's continued safe and efficient service in an abandorunent of ROW by the City
shall fulfill the City's obligation to condition the abandonment on Atmos Energy's right
to continued use. The City's obligations in this paragraph shall not apply if the third
party is a party with the right to condemn the City's Right-of-Way.
2.4 Easements. Any easements over or under property owned by City other than the Right -
of-Way shall be separately negotiated with City, except that Atmos Energy may use
general utility easements that are dedicated for compatible uses on property owned by
City.
2.5 Right of Inspection. City shall have the right to inspect all construction, reconstruction,
installation work and/or any other work performed by Atmos Energy and to make such
tests as it deems necessary to ensure compliance with the terms of this Agreement, City
sst~~ ordinances, and any other local, state, or federal laws.
Ordinance No. 2007-02 Page 3
Ahnos Franchise Agreement
466644.v2
_ 2.6 Placement of Fixtures. Atmos Energy shall not place any part of the System or similar
fixtures where the same will unduly interfere with any gas, electric, or telephone fixture,
water hydrant or main, drainage facility or sanitary sewer, or other utility and all such
improvements shall be placed in such manner as not to unreasonably interfere with the
usual travel or use of the streets, public easements and Right(s)-of-Way.
2.7 Compliance with Railroad Commission Rules and Re~ulations. Atmos Energy must
comply with all customer service rules and regulations, as they exist or may be amended
and/or created, set by the Railroad Commission of Texas or an agency of the state
regulating the activities of gas utilities in Texas.
SECTION 3. INDEMNITY & INSURANCE:
3.1 INDEMNIFICATION. ATMOS ENERGY DOES HEREBY AGREE TO RELEASE~ DEFEND~
INDEMNIFY AND HOLD HARMLESS CITY AND ITS CITY COUNCIL MEMBERS, OFFICERS,
AGENTS~ REPRESENTATIVES AND EMPLOYEES FROM AND AGAINST ALL DAMAGES,
INJURIES (INCLUDING DEATH~, CLAIMS, PROPERTY DAMAGES (INCLUDING LOSS OF USE~,
LOSSES~ DEMANDS~ SUITS~ JUDGMENTS AND COSTS~ INCLUDING REASONABLE
ATTORNEY'S FEES AND EXPENSES (INCLUDING ATTORNEYS' FEES AND EXPENSES
INCURRED [N ENFORCING THIS 1NDEMNITY~, CAUSED BY THE NEGLIGENT~ GROSSLY
NEGLIGENT~ AND/OR INTENTIONAL ACT AND/OR OMISSION OF ATMOS ENERGY, ITS
_ AGENTS~ OR ANY OTHER THIRD PARTIES FOR WHOM ATMOS ENERGY IS LEGALLY
RESPONSIBLE, IN ITS/THEIR USE OR OCCUPANCY OF CITY'S RIGHT OF WAY. ATMOS
ENERGY IS EXPRESSLY REQUIRED TO DEFEND CITY AGAINST ALL SUCH CLAIMS;
PROVIDED, HOWEVER~ IF A COURT OF COMPETENT JURISDICTION SIGNS A JUDGMENT
THAT BECOMES FINAL AND NON-APPEALABLE, DETERMINING THAT THE CITY
(WITHOUT WAIVING ANY GOVERNMENTAL IMMUNITY~ HAS JOINT~ CONCURRENT OR
SOLE NEGLIGENCE FOR THE CLAIMS, 1N ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS (THE ~~.TUDGMENT"~, THEN ATMOS ENERGY 1S NOT REQUIRED TO INDEMNIFY
THE CITY TO THE EXTENT OF THE NEGLIGENCE APPORTIONED TO THE CITY FOR EACH
CAUSE OF ACTION IDENTIFIED IN THE JUDGMENT. IN THE EVENT THE JUDGMENT
PROVIDES THAT CITY IS JOINTLY~ CONCURRENTLY~ OR SOLELY NEGLIGENT FOR THE
CLAIMS REFERRED TO THEREIN~ CITY AGREES TO REIMBURSE ATMOS ENERGY FOR
ALL REASONABLE AND NECESSARY COSTS INCURRED AND PAID BY ATMOS ENERGY
THAT ARE ATTRIBUTABLE TO CITY'S PERCENTAGE OF JOINT, CONCURRENT, OR SOLE
NEGLIGENCE~ AS SET FORTH IN THE JUDGMENT~ INCLUDING REASONABLE AND
NECESSARY ATTORNEY'S FEES AND EXPENSES, TO ATMOS ENERGY WITHIN SIXTY (CO~
DAYS OF THE DATE OF THE JUDGMENT.
IN ITS SOLE REASONABLE DISCRETION~ CITY SHALL HAVE THE RIGHT TO APPROVE OR
SELECT DEFENSE COUNSEL TO BE RETAINED BY ATMOS ENERGY IN FULFILLING ITS
OBLIGATION HEREUNDER TO DEFEND AND INDEMNIFY CITY~ UNLESS SUCH RIGHT IS
EXPRESSLY WAIVED BY CITY IN WRITING. CITY RESERVES THE RIGHT TO PROVIDE A
PORTION OR ALL OF ITS OWN DEFENSE~ HOWEVER~ CITY IS UNDER NO OBLIGATION TO
DO SO. ANY SUCH ACTION BY CITY IS NOT TO BE CONSTRUED AS A WAIVER OF ATMOS
ENERGY'S OBLIGATION TO DEFEND CITY OR AS A WAIVER OF ATMOS ENERGY'S
Ordinance No. 2007-02 Page 4
Atmos Franchise Agreement
466644.v2
OBLIGATION TO INDEMNIFY CITY PURSUANT TO THIS AGREEMENT. ATMOS ENERGY
SHALL RETAIN CIty-APPROVED DEFENSE COUNSEL WITHIN SEVEN (7~ BUSINESS DAYS OF
CITY'S WRITTEN NOTICE THAT CITY IS INVOKING ITS RIGHT TO INDEMNIFICATION
UNDER THIS AGREEMENT. IF ATMOS ENERGY FAILS TO RETAIN COUNSEL WITHIN SUCH
TIME PERIOD, CITY SHALL HAVE THE RIGHT TO RETAIN DEFENSE COUNSEL ON ITS OWN
BEHALF~ AND ATMOS ENERGY SHALL BE LIABLE FOR ACTUAL REASONABLE COSTS
INCURRED BY CITY.
THIS SECTION 3.1 SHALL APPLY TO ALL CLAIMS OR CAUSES OF ACTION ARISING FROM
OR RELATED TO THIS AGREEMENT AND SURVIVE TERMINATION OF THIS AGREEMENT
WITH RESPECT TO CLAIMS OR CAUSES OF ACTION ARISING DURING THE TERM OF THIS
AGREEMENT.
3.2 Insurance. Atmos Energy may self-insure to the extent permitted by applicable law under
any plan of self-insurance, maintained in accordance with sound accounting practices,
against risks and obligations undertaken pursuant to this Agreement and shall not be
required to maintain insurance; provided that Atmos Energy furnishes the City
satisfactory evidence of the existence of an insurance reserve adequate for the risks
covered by such plan of self-insurance. Atmos Energy shall provide the City with
evidence of the form and basis for insurance coverage or self-insurance, as applicable,
within thirty (30) days of the effective date of this Agreement. Should Atmos Energy
elect to change the form or basis of insurance during the term of this Agreement, Atmos
Energy shall notify the City. Atmos Energy shall provide documentation necessary for
review by the City of the changed circumstances of Atmos Energy
SECTION 4. RECORDS AND AUDITS:
4.1 Open Books and Records. Upon reasonable written notice to Atmos Energy and with no
less than fifteen (15) days written notice to Atmos Energy, City shall have the right to
inspect Atmos Energy's books and records pertaining to Atmos Energy's provision of
service in the City at any time during normal business hours and on a non-disruptive
basis, as are reasonably necessary to ensure compliance with the terms of this Agreement.
Atmos Energy shall not be required to maintain any books and records for Agreement
compliance purposes longer than three (3) years, except that any records relevant or
related to an unresolved, ongoing dispute shall be maintained until final resolution of
such dispute. Notwithstanding anything to the contrary set forth herein, Atmos Energy
shall not be required to disclose information that it reasonably deems to be proprietary or
confidential in nature, nor disclose any of its or a division or affiliate's books and records
not relating to the provision of service in the City. City agrees to treat any information
disclosed by Atmos Energy as confidential and only to disclose it to employees,
representatives, and agents thereof that have a need to know, or in order to enforce the
provisions hereof or as required by law.
4.2 Audit. The City, or its designee, may conduct an audit or other inquiry in relation to a
payment made by Atmos Energy less than three (3) years before the commencement of
such audit or inquiry. All records deemed by City or City's designee to be reasonably
Ordinance No. 2007-02 Page 5
Atmos Franchise Agreement
466644.v2
necessary for such audit shall be made available by Atmos Energy in a format deemed
appropriate by the City or City's designee and at a location in the City or within the State
of Texas. Atmos Energy agrees to give its full cooperation in any audit and shall provide
complete responses to inquiries within fifteen (15) business days of a written request.
A. City shall pay the costs of the audit. If the results of the audit indicate Atmos
Energy underpaid the Franchise Fee by more than ten percent (10%), then Atmos
Energy shall pay the costs of the audit. City agrees that any audit shall be
performed in good faith. The calculations required by this paragraph shall be
based on the payment period being audited.
B. If the results of the audit indicate that Atmos Energy underpaid the Franchise Fee
interest on the total amount of underpayment shall be paid in accordance with
Section 5.10, and interest shall be calculated from the date the original amount
was due. Any additional amount due to City hereunder shall be paid within thirty
(30) days of confirmation of the underpayment by Atmos Energy.
SECTION 5. PAYMENTS TO CITY:
5.1 Atmos Energy, its successors and assigns, agrees to pay and City agrees to accept, on or
before the 45th day following the end of each quarter during the life of this Agreement
except as stated in S.C.(2) below, a sum of money which shall be equivalent to four
percent (4%) of the Gross Revenues, as defined in S.B below, received by Atmos Energy
during the preceding calendar quarter (quarters shall end on March 31, June 30,
September 30 and December 31 of each year) (the "Franchise Fee").
5.2 "Gross Revenues" shall mean all revenue derived or received, directly or indirectly, by
Atmos Energy from or in connection with the operation of the System within the
corporate limits of the City and including, without limitation:
(1) all revenues received by Atmos Energy from the sale of gas to all classes of
customers (excluding gas sold to another gas utility in the City for resale to its
customers within City) within the City;
(2) all revenues received by Atmos Energy from the transportation of gas through the
System of Atmos Energy within the City to customers located within the City
(excluding any gas transported to another gas utility in City for resale to its
customers within City);
(3) the value of gas transported by Atmos Energy for transport customers through the
System of Atmos Energy within the City ("Third Party Sales")(excluding the
value of any gas transported to another gas utility in City that has a franchise with
City for resale to its customers within City), with the value of such gas to be
established by utilizing Atmos Energy's monthly Weighted Average Cost of Gas
charged to industrial customers in the Mid-Tex division, as reasonably near the
time as the transportation service is performed; and
Ordinance No. 2007-02 Page 6
Atmos Franchise Agreement
466644.v2
(4) "Gross revenues" shall also include:
(a) other revenues derived from the following `miscellaneous charges':
i. charges to connect, disconnect, or reconnect gas within the City;
ii. charges to handle returned checks from consumers within the City;
iii. such other service charges and charges as may, from time to time,
be authorized in the rates and charges on file with the City; and
iv. contributions in aid of construction" ("CIAC");
(b) revenues billed but not ultimately collected or received by Atmos Energy;
and
(c) gross receipts fees.
(5) "Gross revenues" shall not include:
(a) the revenue of any Person including, without limitation, an affiliate, to the
extent that such revenue is also included in Gross Revenues of Atmos
Energy;
(b) sales taxes;
(c) any interest income earned by Atmos Energy; and
(d) all 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 City's Rights-of-Way.
5.3 The initial payment for the rights and privileges herein provided shall be for the period
January 1 through March 31, 2007, and each succeeding payment shall be for the quarter
after which it is made. Notwithstanding 5.1. and 5.2. above, the following shall apply for
CIAC:
(1) The Franchise Fee amounts based on "Contributions in aid of Construction"
("CIAC") shall be calculated on an annual calendar year basis, i.e. from January 1
through December 31 of each calendar year.
(2) The Franchise Fee amounts that are due based on CIAC shall be paid at least once
annually on or before Apri130 each year based on the total CIAC recorded during
the preceding calendar year. The initial CIAC Franchise Fee amount will be paid
on or before April 30, 2007 and will be based on the calendar year January 1
through December 31, 2006. The final CIAC Franchise Fee amount under the
original term of this Ordinance will be paid on or before April 30, 2017 and will
be based on the calendar year January 1 through December 31, 2016. Such final
date shall be subject to revision pursuant to Section 6.2 contained herein.
5.4 Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid by Atmos
Energy:
_LL_ (1) If Atmos Energy should at any time after the effective date of this Agreement
agree to new municipal franchise ordinance, or amend or renew an existing
municipal franchise ordinance, with another municipality in the Mid-Tex
Division, as it exists on the effective date of this Agreement which municipal
Ordinance No. 2007-02 Page 7
Atmos Franchise Agreement
a6~aa.~2
franchise ordinance determines the franchise fee owed to that municipality for the
use of its Rights-of-Way in a manner that, if applied to the City, would result in a
franchise fee greater than the amount otherwise due City under this Agreement,
then the franchise fee to be paid by Atmos Energy to City pursuant to this
Agreement shall 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.
(2) The provisions of this Section 5.4 apply only to the amount of the franchise fee to
be paid and do not apply to other franchise fee payment provisions, including
without limitation the timing of such payments.
5.5 Atmos Energy Franchise Fee Recovery Tariff.
(1) Atmos Energy may file with the City a tariff or tariff amendment(s) to provide for
the recovery of the Franchise Fees under this Agreement.
(2) 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 Atmos Energy's rates; (ii) if the City intervenes in any regulatory
proceeding before a federal or state agency in which the recovery of Atmos
Energy's Franchise Fees is an issue, the City will take an affirmative position
° x supporting 100% recovery of such franchise fees by Atmos Energy 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 Atmos Energy.
(3) 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 Atmos Energy.
(4) Nothing contained in this Section 5.5 shall be interpreted to alter or limit the
City's ability to reject or oppose, before any governmental body, agency, court or
other regulatory authority, any portion of an ordinance, rate, tariff, etc. that is not
to recover the Franchise Fees.
5.6 Lease of Facilities Within Cit ts-of-Wav. Atmos Energy shall have the right to
lease, license or otherwise grant to a party other than Atmos Energy the use of its System
within the City's Rights-of-Way provided: (i) Atmos Energy first notifies the City of the
name of the lessee, licensee or user; the type of service(s) intended to be provided
through the System; and the name and telephone number of a contact person associated
with such lessee, licensee or user and (ii) Atmos Energy makes the franchise fee payment
due on the revenues from such lease pursuant to Sections 5.1. and 5.2. of this Agreement.
This authority to lease facilities within City's Rights-of-Way shall not affect any such
m lessee, licensee or user's obligation, if any, to pay franchise fees and Atmos Energy shall
not lease, license or otherwise gant to a third party the right to use any of the System
unless a franchise agreement is in effect between the City and the third party.
Ordinance No. 2007-02 Page 8
Atmos Franchise Agreement
466644.v2
5.7 Statement of Gross Revenues. With each payment of compensation required herein,
Atmos Energy shall furnish to the City a statement, executed by an authorized officer of
Atmos Energy, or his or her designee, reflecting the total amount of gross revenues
received, as defined herein, by Atmos Energy for the payment period.
5.8 Payment over Holidavs. Should any payment due date required by this franchise fall on a
weekend or declared bank holiday, payment shall be delivered to City no later than the
close of business on the working day prior to any specifically required due date contained
within this Agreement.
5.9 Failure to Pav Entire/Correct Franchise Fee(s). If either party discovers that Atmos
Energy has failed to pay the entire or correct amount of compensation due, the correct
amount shall be determined by the City, and the City shall be paid by Atmos Energy
within thirty (30) calendar days of such determination. Any overpayment to the City
through error or otherwise shall, at the option of the City, be refunded or offset against
the next payment due from Atmos Energy. Acceptance by the City of any payment due
under this Section shall not be deemed to be a waiver by the City of any breach of this
Agreement, nor shall the acceptance by the City of any such payments preclude the City
from later establishing that a larger amount was actually due or from collecting any
balance due to the City.
5.10 Interest. Interest on late payments shall be calculated in accordance with the interest rate
T for customer deposits established by the PUC in accordance with Texas Utilities Code
Section 183.003, as amended for the time period involved. If the requirement that
interest be paid on customer deposits be removed from state law or be less than one
percent (1 then the interest rate shall be five percent (5%).
5.11 Additional Fees/Taxes. Nothing in this Agreement shall be construed to prohibit the City
from levying the usual general or special ad valorem taxes which the City is authorized to
levy and impose upon real and personal property. No such taxes paid by Atmos Energy
to the City shall reduce the Franchise Fees payable to City hereunder.
5.12 Forfeiture/Default.
(1) If Atmos Energy fails to comply with the material terms of this Agreement, after
sixty (60) days written notice, then City may compel compliance by suit in any
court of competent jurisdiction and if, upon final judgment being entered in favor
of City, Atmos Energy still fails to comply with the terms of this Agreement and
the final judgment, City may compel compliance under penalty of forfeiture
hereof.
(2) Atmos Energy further agrees that if for any reason Atmos Energy fails to pay the
payments referenced in Section 5 of this Agreement within thirty (30) days
following written notice from City that Atmos Energy has failed to make the
payment, such failure shall be sufficient to permit City to terminate this
Agreement without court action. Nothing herein shall be deemed as a waiver by
Ordinance No. 2007-02 Page 9
Ahnos Franchise Agreement
466644.v2
either party of any legal remedies available to it under a court or regulatory
authority having jurisdiction.
5.13 Renegotiation. Should technological, market-driven, regulatory or similar changes occur
in the natural gas industry, then either party may initiate the renegotiation of any
provision of this Agreement. Should either party request a change to a provision of this
Agreement, both parties agree to enter into a good faith negotiation. "Good Faith", for
the purpose of this Agreement, shall mean an objective, diligent, timely and responsible
discourse on the issue(s) involved and a resolute attempt to settle the issue(s). Should, as
a result of renegotiation, City and Atmos Energy agree to a change in a provision of this
Agreement, the change shall become effective immediately upon passage of an
Ordinance by the City Council and execution of the amendment by Atmos Energy, which
must be completed by both parties if agreement was reached following renegotiation.
Atmos Energy agrees to provide any and all information reasonably requested (except
that which is deemed proprietary by a court of competent jurisdiction) by City to assist in
a determination of any changes in conditions, practices and/or services provided by
Atmos Energy through the use of the Right-of-Way of City.
SECTION 6. ACCEPTANCE AND TERM OF FRANCHISE:
6.1 Acceptance. In order to accept this Agreement, Atmos Energy must file with the City
, M Secretary its written acceptance of this Agreement in the form attached hereto as Exhibit
"A" within sixty (60) days after its final passage and approval by City. If such written
acceptance of this Agreement is not filed by Atmos Energy, the Agreement shall be
rendered null and void.
6.2 Term. The term of the Agreement granted herein shall be for ten (10) years from the
approval date unless earlier terminated by either party in accordance with the provisions
herein. Upon mutual written agreement of the parties, the term of this Agreement may be
renewed for two (2) additional terms of five (5) years on the same terms and conditions
as set forth herein or as negotiated by the parties hereto.
SECTION 7. MISCELLANEOUS:
7.1 Amendment Of Franchise A~,reement. This Agreement may not be amended except
pursuant to a written instrument signed by both parties.
7.2 Governin~ Law. The laws of the State of Texas, the City Charter and City ordinances,
rules and regulations shall govern the interpretation validity, performance and
enforcement of this Agreement. The parties agree that this Agreement is performable in
Collin, Dallas and Rockwall Counties, Texas.
m 7.3 Force Majeure. In the event that the performance by either party of any of its obligations
or undertakings hereunder shall be interrupted or delayed by an act of god or the common
enemy or the result of war, riot, civil commotion, sovereign conduct, or the act or
conduct of any person or persons not party or privy hereto, then such party shall be
Ordinance No. 2007-02 Page 10
Atmos Franchise Agreement
466644.v2
excused from performance for a period of time as is reasonably necessary after such
occurrence to remedy the effects thereof, and each party shall bear the cost of any
expense it may incur due to the occurrence.
7.4 Successors and Assigns. This Agreement is not assignable except to an Affiliate of
Atmos Energy without the prior written consent of the City, unless otherwise provided
herein, in which case this Agreement shall be binding upon the successors and assigns of
the parties hereto. For the purposes of this provision, an Affiliate is defined as any entity
controlling, controlled by or under common control with Atmos Energy.
7.5 Waiver of Breach. The waiver by either party of any breach or violation of any provision
of this Agreement shall not be deemed to be a waiver or a continuing waiver of any
subsequent breach or violation of the same or any other provision of his Agreement.
7.6 Representations and Warranties. Each of the parties to this Agreement represent and
warrant that at the time of signing of this Agreement it has the full right, power, legal
capacity, and authority to enter into and perform the parties' respective obligations
hereunder and that such obligations shall be binding upon such party. Each signatory
represents this Agreement has been read by the party for which this Agreement is
executed and that such party has had an opportunity to confer with its counsel.
7.7 Entire A~reement. This Agreement contains the entire understanding between the parties
with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the
subject matter of this Agreement that are not fully expressed herein.
7.8 No Third Partv Beneficiaries. This Agreement is for the benefit of Atmos Energy, and
the City, and not for the benefit of any third party. No provision of this Agreement shall
be construed as creating any third party beneficiaries.
7.9 Repealin~ Clause. When this Agreement becomes effective, all previous ordinances of
City granting franchises for gas delivery purposes that were held by Atmos Energy or one
of its predecessors in interest shall be automatically canceled and annulled, and shall be
of no further force and effect, except that the provisions regarding franchise fee payments
may still be enforced for any amounts owed to City but still unpaid by Atmos Energy.
7.10 Severabilitv. Should any section, subsection, sentence, clause or phrase of this Ordinance
be declared unconstitutional or invalid by a court of competent jurisdiction, it is expressly
provided that any and all remaining portions of this Ordinance shall remain in full force
and effect. City hereby declares that it would have passed this Ordinance, and each
section, subsection, clause or phrase thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses and phrases be declared unconstitutional or
invalid.
~ 7.11 Public Meetin~. It is hereby officially found that the meeting at which this Ordinance is
passed is open to the public and that due notice of this meeting was posted, all as required
by law.
Ordinance No. 2007-02 Page 11
Ahnos Franchise Agreement
466644.v2
7.12 Sovereign Immunitv. The parties hereto agree that the City has not waived its sovereign
immunity by entering into and performing its obligations under this Agreement.
7.13 Miscellaneous Drafting Provisions. This Agreement shall be deemed drafted equally by
all parties hereto. The language of all parts of this Agreement shall be construed as a
whole according to its fair meaning, and any presumption or principle that the language
herein is to be construed against any party shall not apply. Headings in this Agreement
are for the convenience of the parties and are not intended to be used in construing this
document.
7.14 Counterparts. This Agreement may be executed in a number of identical counterparts,
each of which shall be deemed an original for all purposes.
7.15 Consideration. This Agreement is executed by the parties hereto without coercion or
duress and for substantial consideration, the sufficiency of which is forever confessed.
SECTION 8. CITY'S RIGHT TO BID ON SYSTEM:
City's Right to Bid on System. In the event Atmos Energy should offer its System, or any part
thereof, within the City for sale, Atmos Energy agrees to give written notice of said proposed
sale to City. City shall have the same amount of time as other interested parties, or seven (7)
days, whichever is greater, from the receipt of said notice to submit a bid to the Atmos Energy
-n~°r for the System, or any part thereof. Atmos Energy agrees to timely provide information to City
necessary to prepare a competitive bid. Atmos Energy agrees to consider City's bid equally with
all other bids.
SECTION 9. EFFECTIVE DATE: If Atmos Energy accepts this ordinance, it becomes
effective as of February 22, 2007.
DULY PASSED AND APPROVED on this the 23ra day of January, 2007.
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ATTEST: ~ • ~ :Lf
f`"~ITY OF WYLIE, TEXAS
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Carole Ehrlic r City Secretary ~•.,,e Qo `~.~'Iay ~ohn ondy
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Date of publication in The Wylie News - Januarv 31, 2007
Ordinance No. 2007-02 Page 12
Atmos Franchise Agreement
466644.v2
STATE OF TEXAS §
§
COUNTY OF COLLIN §
BEFORE ME, the undersigned authority, on this day personally appeared JOHN
MONDY, known to me to be one of the persons whose names are subscribed to the foregoing
instrument; he acknowledges to me he is the duly authorized representative for the CITY OF
WYLIE and he executed said instrument for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 23ra day of January, 2007.
_ . C., '
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Notary Pu lic m d for the State of Texas
My Commission Expires: ~ /C~,, r~~~G' y
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My ca~on Exph«
J~tly 16, 2CIOV
Ordinance No.2007-02 Page 13
Ahnos Franchise Agreement
466644.v2
EXHIBIT "A"
STATE OF TEXAS §
§
COUNTY OF DALLAS §
WHEREAS, there was finally passed and approved on January 23, 2007, Ordinance No.
2007-02 granting to Atmos Energy Corporation, its successors and assigns, a franchise to furnish
and supply gas to the general public in the City of Wylie, Collin 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 6.1 of said ordinance provides as follows:
" 6.1 Acceptance. In order to accept this Agreement, Atmos Energy must file with the
City Secretary its written acceptance of this Agreement in the form attached hereto as
Exhibit "A" within sixty (60) days after its final passage and approval by City. If such
~ written acceptance of this Agreement is not filed by Atmos Energy, the Agreement 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 6.1 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 ~~day of F~ir~'u*4-
2007.
Atmos Energy Corporation
i ~ ,
L._ /
Vice President, - Division
Ordinance No. 2007-02 Page 14
Atmos Franchise Agreement
466644.v2
STATE OF TEXAS §
§
COUNTY OF COLLIN §
I, Carole Ehrlich, City Secretary of the City of Wylie, Texas, do hereby certify that the
above and foregoing is a true and conect copy of a formal acceptance of a franchise ordinance
finally passed and approved by said City on January 23, 2007, 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 23rd day
of January, 2007. `.``y~~~ Fm
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~ • ole Ehrlich, ity Secretary
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iEfli ~Xp,~~~~~~ity of Wylie, Texas
Ordinance No. 2007-02 Page 15
Atmos Franchise Agreement
466644.v2
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STATE OF TEXAS ~ q, ~ ~
COUNTY OF COLLIN
Before me, the undersigned authority, on this day personally appeared Chad Engbrock,
publisher of The Wylie News, a newspaper regularly published in Collin County, Texas and
having general circulation in Collin County, Texas, who being by me duly sworn, deposed and
says that the foregoing attached
City of Wylie
Ordinance No. 2007-02
was published in said newspaper on the following dates, to-wit: January 31, 2007.
Chad Engbrock, Publisher
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Subscribed and sworn before me on this, the ~ day of _J 1.1~(.-C'i~.'~~, 2007
to certify which witness my hand and seal of office.
MARY SWANK
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Notary Public, State of Texas F
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Murphy/Sachse/Wylie Office • 1 IO N. Ballard • P.O. Box 369 • Wylie, TX 75098 • 972-442-5515 • fax 972-442-4318
Farmersville/Princeton Office • 101 S. Main • P.O. Box 512 • Fuinersville, TX 75442 • 972-784-6397 • faY 972-782-7023
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STATE OF TEXAS ~
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CO~JNTY OF COLLIN g
Before me, the undersigned authority, on this day personally appeared Chad Engbrock,
publisher of The Wylie News, a newspaper regularly published in Collin County, Texas and
having general circulation in Collin County, Texas, who being by me duly sworn, deposed and
says that the foregoing attached
City of Wylie
Ordinance No. 2007-02
was published in said newspaper on the following dates, to-wit:
January 31, 2007
Chad Engbrock, Publisher
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Subscribed and sworn before me on this, the day of ~ , 2007
to certify which witness my hand and seal of office.
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Notar Public in and for
- The State of Texas
MARY SWANK
_ ~ Notary Public, State of Texas ~ _ ~ ~ _ ~ Q ~ ~
;~ti,; My Commission Expires
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Murphy/Sachse/Wylie Office • 110 N. Ballard • P.O. Box 369 • Wylie, TX 75098 • 972-442-551~ • fax 972-442-4318
Farmersville/Princeton Office • 101 S. Main • P.O. Box 512 • Fumeisville, TX 75442 • 972-784-6397 • fa~c 972-782-7023
ORDINANCE NO. ~
2007-02
AN ORDINANCE
GRANTING TO ATMOS
ENERGY CORPORA-
TION, A TEXAS AND
VIRGINIA CORPORA-
TION, ITS SUCCESSORS
AND ASSIGNS, A FRAN-
CHISE TO CONSTRUCT,
MAINTAIN, AND OPER-
ATE PIPELINES AND
EQUIPMENT IN THE
CITY OF WYLIE,
COLLIN COUNTY,
TEXAS, FOR THE
TRANSPORTATION,
DELIVERY, SALE, AND
DISTRIBUTION OF GAS
IN, OUT OF, AND
THROUGH SAID CITY
~Olt ALL PURPOSES;
PROVIDING FOR THE
PAYMENT OF A FEE OR
CHARGE FOR Tf~ U5E
t7F RIGHTS-O - AYS;
AND PROVIDIN~FOI~
REPEALII~G AND SEV-
ERABILITY CLAUSES;
AND PROVIDING FOR
AN EFFECTIVE DATE.
' John Mondy, Mayor
ATTEST:
Cazole Ehrlich, City
Secretary
37-1t-337-39li
