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HomeMy WebLinkAbout2015-12-16 CC Packet CITY OF CENTERVILLE SPECIAL COUNCIL MEETING teryiffe & CLOSED EXECUTIVE SESSION AGENDA E�tafVi,�eA,. Tuesday, December 16, 2015 6:00 p.m. or shortly thereafter COUNCIL MEETING I. CALL TO ORDER 1. Roll Call II. PLEDGE OF ALLEGIANCE III. OLD BUSINESS 1. Discussion & Update on Proposed Franchise Fees (Connexus Energy, CenterPoint Energy &Xcel Energy) (Pages 1-10) IV. NEW BUSINESS 1. Ordinance#75, Second Series—Franchise Agreement—Xcel Energy (Pages 13-21) 2. Ordinance#76, Second Series—Franchise Fee—Xcel Energy (Pages 22-24) a. Ordinance#75 & #76, Second Series Summaries 3. Ordinance#77, Second Series—Franchise Agreement—Connexus Energy (Pages 38-45) 4. Ordinance#78, Second Series—Franchise Fee—Connexus Energy (Pages 46-48) a. Ordinance#77 & #78, Second Series Summaries 5. Ordinance#79, Second Series—Franchise Agreement- CenterPoint Energy (Pages 51-57) 6. Ordinance#80, Second Series—Franchise Fee—CenterPoint Energy (Pages 58-60) a. Ordinance#79 & 80, Second Series Summaries V. RECESS TO CLOSED EXECUTIVE SESSION (Closed Unless Otherwise Noted) 1. Performance Review Administrator Ericson VI. ADJOURNMENT FROM CLOSED EXECUTIVE SESSION/RETURN TO SPECIAL COUNCIL MEETING VIII. PERFORMANCE APPRAISAL—CITY ADMINISTRATOR IX. ADJOURNMENT *REMINDERS** Planning&Zoning Commission Meeting—January 5, 2016, 6:30 p.m. (Council Chambers) D-rks&Recreation Committee Meeting—January 6, 2016, 6:30 p.m. (Council Chambers) Council Meeting—January 13, 2016, 6:30 p.m. (Council Chambers) %-ity Council Meeting—January 27, 2016, 6:30 p.m. (Council Chambers) Parks &Recreation—January 9, 2016 - Family Skate Night, LaMotte Park (6:30 p.m. —9:00 p.m.) Parks &Recreation—February 6, 2016 - Family Skate Night, LaMotte Park(Hayrides 6:30 p.m. —8:30 p.m., popcorn, hot cocoa and bonfire(6:30 p.m. —9:00 p.m.) Centerville Lions Ice Fishing Contest—February 20, 2016, Centerville Lake, Anoka County Boat Launch, 11:00 a.m.—2:00 p.m. (Weather Dependent) Shake Your Shamrock 5K, 8K& Kid's 1/3K Walk/Runs—March 12, 2016, Kelly's Korner, 7:00 a.m.— 1:00 P.M. Out Run Homelessness 5K, 8K&Kids Run/Walk—October 1, 2016, LaMotte Park, 7:00 a.m. —9:30 a.m. e I*t ffe ry r. WOMMOMMON"M ,(Dtafifished 1857 Franchise Fee Analysis December 9, 2015 Pavement Management Plan ➢ Inventory of approximately 20 miles of streets ➢ PASER rating ■ Pavement Surface Evaluation and Rating; ■ Pavement Condition Index. Pavement Condition Rating Recommended Maintenance @ � ,•;,axl '.1".: ^' ,W�• `#; _.�x„ M1;t :r;e; .'r. _ '. �Yhi y'�`» ',.t'i� kr� q,g�' Aa`.e,-yF' '•a 'r"�'•''£$ ,:4-> G�N'•,:,,yti�""� ' r�', � '�. S s^ :^t.. 7-8 Crack Seal, Seal Coat, Bituminous Patch �r',,.,..C,".• s,,t'.n;,',<y.,4 „;,,.np ,,• ';i'r'",'�'yY: �:".�,n'' „v.� w,..�r ,. -;/ ��.":�; y;, `ire., � �;'¢�^'*� �° � '•;'.7;,-'," 7,' r.F A f�''iy1.t. ;.• _,a ��,'<�� �� �, '� -VL'�� �e :,�L ""C"-'•y.'.,,p,,?`' puri,^'y�� i��� �sb� 3-4 Full Depth Reclamation & Paving - �.a r p�. �J�.;�'a' .P.ti'� :;�N,,;�"' ',':;x�';�•.�,,2„ ,".7" "h,"�>v,�+.�:'�;.n .4,' "'f•�S1v'���urm�'✓,'� N`, '�:k, �'�'+4:7'•` ��nry ;�,� ;�£y>„ �, �� ;(., W :;A- �.� �� ia� � ,v„"fl +Sa., m. 18�'� :•r" F�.',rF..,,Fl;"���'•�e3' .�;i5,at,•,,,��wH'.;��'..�5+:{ 4 e'15,°, :1%���� �y,^` :'�. w+ge.�.fs�.pp. ve,d`!3�i`j� _ p,':R^•� ^�� w.l.�.i4"',+'�b.,,'�a`�;;^'��,,�°, Maintenance and Rehabilitation Costs Cost/Lineal Foot Pavement Rehabilitatiob, Option t AW Cr ck $44 'a $11.007 2. Bituminous Patching A, 777 60 3a. ,0V"'e" ftaYJA w- ta,,'S $44.00 3b. Edge Mill and Overlay (Urban Street) 4 jiRe M,zi w, ye -p�16 46 15. Full Depth Reclamation $320.00 20 miles of new construction today at $320/1-f. $33,792,000 Annual Investment Required Depreciation Period 30 Year's 50 Years 100 Years %'k'a '777,rx f WA Current Annual Investment 4k, v" Typical Annual General Fund Investment $200,000 for seal coat, crack seal, and mill and overlay projects; V" Special Assessments can range 50% - $100% of costs to property owner for reconstruction. $200,,000 General Fund Levy $150,000 Franchise Fees $350 ,000 Annual Maintenance Funding Financing Mechanisms A ❖ General Fund Tax Levy ❖ Special Assessments ■ Pros: ■ Pros: ❑ Levied against all classes of ❑ Levied directly against property; properties that benefit. ❑ Progressive; ■ Cons: ❑Tax deductible. ❑ City policy requires a o ■ Cons: assessment for overlays and ❑ Limited revenue reconstruct (avg $22,400), diversification; and 100% for new roads and Ll tax rate; pavement; ❑ Interest rates high; Ll Progressive; LJ City v. Property Owner, Ll impact on commercial difficulty establishing properties. increase in property value. Financing Mechanisms continued . . . **** Municipal State Aid **** Franchise Fees ■ Pros: Pros: ❑ Constitutionally dedicated; ❑ Fee to utility providers for ❑ 100% of costs for state aid use of public right of way; designated streets is ❑ Diversification of revenue; reimbursable, regardless if ❑ Flat fee, regressive; special assessment revenue ❑ Easy to implement. is also realized. ■ Cons: ■ Cons: LI Viewed as "another tax"; LI Funds are necessary for ❑ improvements to state aid Coordination with providers; designated streets; LI Regressive. ❑ Only 20% of streets eligible. ❑ Raises utility costs. Revenue Analysis • 1400 Residential@ $8/month $ 134,,400 • Commercial @ $ 16/month 10'?000 • Total Estimated annual revenue $ 144,,400 • Annual amount per home $ 96 • Over 30 Years $ 2,880 tervilfe Revenue Analysis continued . . . City of Centerville Analysis of Property Tax Increase Needed to Fund Local Road Improvements Annual Annual Annual Current 1%Levy Property 5%Levy Property 10%Levy Property Levy Increase Tax Increase Increase Tax Increase Increase Tax Increase 00 2016 Tax Levy $ 2,556,204 $ 2,581,766 $ 2,684,014 $ 2,811,824 Additional Revenue $ 25,562 $ 127,810 $ 255,620 Local Tax Rate 70.9914% 71.8169% 75.1190% 79.2466% City Taxes: $163,111 Home Value $ 1,027 $ 1,039 $ 12 $ 1,087 $ 60 $ 1,146 $ 119 $200,000 Home Value $ 1,312 $ 1,328 $ 16 $ 1,389 $ 77 $ 1,465 $ 153 $300,000 Home Value $ 2,086 $ 2,110 $ 24 $ 2,207 $ 121 $ 2,329 $ 243 Revenue Analysis continued . . . Projected Assessments for a Street Reconstruction Project (100-foot residential lot) Percent of Project Assd I ssed Amount of Assessment oil No 50% $16,000 2`4-0 ,M/0 100% $32,000 PUBLIC UTILITY FRANCHISE FEE What is a franchise fee? A franchise fee is a charge imposed by the City on utility and cable providers who operate in the public right-of-way. An agreement with the City allows them to work in the right-of-way upon payment of established fees. The utility and cable providers often pass these charges on to the customer. Who pays the fee in Forest Lake? If you own a home or business in Forest Lake and receive a gas and/or electric F.A.Q bill from a utility company, a franchise fee will be included on your monthly statement beginning in May of 2013 based on the following schedule: Residential $ 4.00 Small Commercial/Industrial Non-Demand $ 2.50 Small Commercial/Industrial Demand $18.50 Large Commercial/Industrial $75.00 Why was this fee established? In 2011, the City Council appointed a Streets task force to study the condition of the City's street inventory and recommend methods of financing street maintenance and improvements. The task force found that nearly 65% of the City's streets were in need of improvement, based on a standard ranking system recognized in the industry. Failing to maintain streets in an appropriate time frame can result in the need to reconstruct the roads at a much higher cost to the taxpayers. The task force ultimately recommended the establishment of franchise fees as a mechanism to finance needed street improvements. What benefit do I get from paying this fee? City residents will enjoy a higher level of street maintenance and improvement. If your street is improved, it is likely that little to none of the cost will be assessed to your property. The franchise fee will provide approximately $700,000 annually in revenue, which is specifically dedicated to the local street improvement fund. The annual revenue is far less than the amount the City would need to maintain the streets to an acceptable level; however, significant improvement in the overall condition of local streets should be noticed as this program proceeds. t Mike Ericson rom: Jurek, Colette C <colette.c Jurek@xcelenergy.com> .ent: Monday, November 02, 2015 12:37 PM To: Mike Ericson Subject: Centerville: Franchise Fee Drafts -Xcel Energy Mike, I ran the city's franchise fee collection proposal that we discussed last week past our upper management and I received the following counterproposal. Please let me know what you think of these two proposals. We have no objection to the$4.00 monthly charge for residential customers on both the electric and gas side. The proposal below would collect over$125,000 for the city which was the target amount. If you wish to proceed, I can submit a request for fee ordinances tomorrow and I should be able to have something to you by Thursday for your council mailing packets. The other utilities providing service within Centerville would need to approve similar fee schedules. Your thoughts? ELECTRIC CUSTOMER CLASSIFICATIONS Flat Monthly Fee Per Premise [also adopted by Connexus Energy] Residential $ 4.00 Small C&I: Non-Demand $ 4.00 Small C&I: Demand $ 8.00 Large C&I $ 8.00 Public street lighting $ 0.00 Municipal pumping: Non-Demand $ 0.00 Municipal pumping: Demand $ 0.00 Total annual collection $61,104.00 GAS CUSTOMER CLASSIFICATIONS Flat Monthly Fee Per Premise [also adopted by CenterPoint Energy] Residential $ 4.00 Commercial Firm: Non-Demand $ 4.00 defer to CPE for fee schedule Commercial Firm: Demand $ 8.00 might want to consider Small Interruptible $ 8.00 fee schedule similar Medium&large interruptible $ 8.00 to electric side Firm Transportation $ 8.00 Interruptible Transportation $ 8.00 Total annual collection $ 8.00 Colette Jurek Manager—Community Relations& Economic Development `Ccel Energy .700 East County Road E White Bear Lake, MN 55110 1 11 Business: (651)779-3105 Fax: (612)573-4039 Cell: (612)209-3501 colette.c.jurek@xcelenergy.com This email has been scanned by the Symantec Email Security.cloud service. For more information please visit http://www.symanteccloud.com 2 12 Gas w/fee GAS FRANCHISE ORDINANCE ORDINANCE NO. CITY OF CENTERVILLE, ANOKA COUNTY,MINNESOTA AN ORDINANCE GRANTING TO NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO ERECT A GAS DISTRIBUTION SYSTEM FOR THE PURPOSES OF CONSTRUCTING, OPERATING, REPAIRING AND MAINTAINING IN THE CITY OF CENTERVILLE, MINNESOTA, THE NECESSARY GAS PIPES, MAINS AND APPURTENANCES FOR THE TRANSMISSION OR DISTRIBUTION OF GAS TO THE CITY AND ITS INHABITANTS AND OTHERS AND TRANSMITTING GAS INTO AND THROUGH THE CITY AND TO USE THE PUBLIC GROUNDS AND PUBLIC WAYS OF THE CITY FOR SUCH PURPOSES. THE CITY COUNCIL OF THE CITY OF CENTERVILLE, ANOKA COUNTY, MINNESOTA,ORDAINS: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: 1.1 City. The City of Centerville,County of Anoka.,State of Minnesota. 1.2 City Utility System. Facilities used for providing non-energy related public utility service owned or operated by City or agency thereof, including sewer and water service, but excluding facilities for providing heating,lighting or other forms of energy. 1.3 Commission. The Minnesota Public Utilities Commission, or any successor agency or agencies,including an agency of the federal government,which preempts all,or part of the authority to regulate Gas retail rates now vested in the Minnesota Public Utilities Commission. 1.4 Company. Northern States Power Company, a Minnesota corporation,its successors and assigns. 1.5 Gas. "Gas" as used herein shall be held to include natural gas, manufactured gas, or other form of gaseous energy. 1.6 Gas Facilities. Pipes, mains, regulators, and other facilities owned or operated by Company for the purpose of providing gas service for public use. 1.7 Notice. A written notice served by one party on the other party referencing one or more provisions of this Ordinance. Notice to Company shall be mailed to the General Counsel,414 Nicollet Mall, 5th Floor, Minneapolis, MN 55401. Notice to the City shall be mailed to the City Administrator, City Hall, 1880 Main Street, Centerville, MN 55038. Either party may change its respective address for the purpose of this Ordinance by written notice to the other party. 1 13 Gas w/fee 1.8 Public Ground. Land owned by the City for park, open space or similar purpose, which is held for use in common by the public. 1.9 Public Way. Any street,alley,walkway or other public right-of-way within the City. SECTION 2. ADOPTION OF FRANCHISE. 2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from the date passed and approved by the City, the right to transmit and furnish Gas energy for light, heat, power and other purposes for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. For these purposes, Company may construct,operate,repair and maintain Gas Facilities in, on, over,under and across the Public Grounds and Public Ways of City, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to such reasonable regulations as may be imposed by the City pursuant to ordinance and to the further provisions of this franchise agreement. 2.2 Effective Date, Written Acceptance. This franchise agreement shall be in force and effect from and after passage of this Ordinance, its acceptance by Company, and its publication as required by law. The City by Council resolution may revoke this franchise agreement if Company does not file a written acceptance with the City within 90 days after publication. 2.3 Service and Rates. The service to be provided and the rates to be charged by Company for Gas service in City are subject to the jurisdiction of the Commission. 2.4 Publication Expense. The expense of publication of this Ordinance will be paid by City and reimbursed to City by Company. 2.5 Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. SECTION 3. LOCATION,OTHER REGULATIONS. 3.1 Location of Facilities. Gas Facilities shall be located, constructed and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt normal operation of any City Utility System previously installed therein. Gas Facilities shall be located on Public Grounds as determined by the City. Company's construction, reconstruction, operation, repair, maintenance and location of Gas Facilities shall be subject to permits if required by separate ordinance and to other reasonable regulations of the City to the extent not 2 14 Gas w/fee inconsistent with the terms of this franchise agreement. Company may abandon underground gas facilities in place, provided, at City's request, Company will remove abandoned metal pipe interfering with a City improvement project,but only to the extent such metal pipe is uncovered by excavation as part of the City's improvement project. 3.2 Field Locations. Company shall provide field locations for its underground Gas Facilities within City consistent with the requirements of Minnesota Statutes, Chapter 216D. 3.3 Street Openings. Company shall not open or disturb any Public Ground or Public Way for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed on Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. Company may,however, open and disturb any Public Ground or Public Way without permission from the City where an emergency exists requiring the immediate repair of Gas Facilities. In such event Company shall notify the City by telephone to the office designated by the City as soon as practicable. Not later than the second working day thereafter, Company shall obtain any required permits and pay any required fees. 3.4 Restoration. After undertaking any work requiring the opening of any Public Ground or Public Way, Company shall restore the same, including paving and its foundation, to as good a condition as formerly existed, and shall maintain any paved surface in good condition for one year thereafter. The work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground or Public Way in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.4, but the City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the City, of a person or entity obtaining the City's permission to install, replace or maintain facilities in a Public Way. 3.5 Avoid Damage to Gas Facilities. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Gas Facilities while performing any activity. 3.6 Notice of Improvements. The City must give Company reasonable notice of plans for improvements to Public Grounds or Public Ways where the City has reason to believe that Gas Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Ground or Public Way is involved, the order in which the work is to proceed. The notice must be given to Company a sufficient length of time in advance of the actual commencement of the work to permit Company to make any necessary additions,alterations or repairs to its Gas Facilities. 3 15 Gas w/fee SECTION 4. RELOCATIONS. 4.1 Relocation of Gas Facilities in Public Ways. If the City determines to vacate a Public Way for a City improvement project,or at City's cost to grade,regrade,or change the line of any Public Way, or construct or reconstruct any City Utility System in any Public Way, it may order Company to relocate its Gas Facilities located therein if relocation is reasonably necessary to accomplish the City's proposed public improvement. Except as provided in Section 4.3, Company shall relocate its Gas Facilities at its own expense. The City shall give Company reasonable notice of plans to vacate for a City improvement project, or to grade,regrade,or change the line of any Public Way or to construct or reconstruct any City Utility System. If a relocation is ordered within five years of a prior relocation of the same Gas Facilities, which was made at Company expense, the City shall reimburse Company for Non-Betterment Costs on a time and material basis,provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconstruct at its own expense its Gas Facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. 4.2 Relocation of Gas Facilities in Public Ground. City may require Company at Company's expense to relocate or remove its Gas Facilities from Public Ground upon a finding by City that the Gas Facilities have become or will become a substantial impairment to the existing or proposed public use of the Public Ground. 4.3 Projects with Federal Funding. City shall not order Company to remove or relocate its Gas Facilities when a Public Way is vacated,improved or realigned for a right-of-way project or any other project which is financially subsidized in whole or in part by the Federal Government or any agency thereof,unless the reasonable non-betterment costs of such relocation are first paid to Company. The City is obligated to pay Company only for those portions of its relocation costs for which City has received federal funding specifically allocated for relocation costs in the amount requested by the Company,which allocated funding the City shall specifically request. Relocation, removal or rearrangement of any Company Gas Facilities made necessary because of a federally- aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the rights herein granted to Company are valuable rights. 4.4 No Waiver. The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Ground or Public Way was established, or Company's rights under state or county permit. SECTION 5. TREE TRIMMING. Company is also granted the permission and authority to trim all shrubs and trees, including roots,in the Public Ways of City to the extent Company finds necessary to avoid interference with the proper construction, operation,repair and maintenance of Gas Facilities, provided that Company shall save City harmless from any liability in the premises. 4 16 Gas w/fee SECTION 6. INDEMNIFICATION. 6.1 Indemnity of City. Company shall indemnify, keep and hold the City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Gas Facilities located in the Public Grounds and Public Ways. The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for,or inspection of,Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonably deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. 6.2 Defense of Citv. In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City,which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City and Company, in defending any action on behalf of the City shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. SECTION 7. VACATION OF PUBLIC WAYS. The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. Except where required for a City improvement project, the vacation of any Public Way, after the installation of Gas Facilities, shall not operate to deprive Company of its rights to operate and maintain such Gas Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to Company for failure to specifically preserve a right-of-way under Minnesota Statutes,Section 160.29. SECTION 8. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. SECTION 9. FRANCHISE FEE. 9.1 Fee Schedule. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on the Company, the City may impose on the Company a franchise fee by collecting the amounts indicated in a Fee Schedule set forth in a separate ordinance from each customer in the designated Company Customer Class. The parties have agreed that the franchise fee collected by the Company and paid to the City in accordance with this Section 9 shall not exceed the following amounts: 5 17 Gas w/fee Class Fee Per Premise Per Month Residential $ Commercial Firm Non-Demand $ Commercial Firm Demand $ Small Interruptible $ Medium and Large Interruptible $ Firm Transportation $ Interruptible Transportation $ 9.2 Separate Ordinance. The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, which ordinance shall not be adopted until at least 90 days after written notice enclosing such proposed ordinance has been served upon Company by certified mail. The fee shall not become effective until the beginning of a Company billing month at least 90 days after written notice enclosing such adopted ordinance has been served upon Company by certified mail. Section 2.5 shall constitute the sole remedy for solving disputes between Company and the City in regard to the interpretation of, or enforcement of, the separate ordinance. No action by the City to implement a separate ordinance will commence until this Ordinance is effective. A separate ordinance which imposes a lesser franchise fee on the residential class of customers than the maximum amount set forth in Section 9.1 above shall not be effective against Company unless the fee imposed on each other customer classification is reduced proportionately in the same or greater amount per class as the reduction represented by the lesser fee on the residential class. 9.3 Collection of the Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for gas service in each class. The payment shall be due the last business day of the month following the period for which the payment is made. The franchise fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements and not occur more often than annually and no change shall require a collection from any customer for gas service in excess of the amounts specifically permitted by this Section 9. The time and manner of collecting the franchise fee is subject to the approval of the Commission. No franchise fee shall be payable by Company if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for gas service. Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles,refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. 9.4 Terms Defined. 9.4.1 "Customer Class" shall refer to classes listed in the Fee Schedule and as defined or determined in Company's gas rate book on file with the Commission. 6 18 Gas w/fee 9.4.2 "Fee Schedule" refers to the Schedule in Section 9.1 setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Classes added by the Company to its gas tariffs after the effective date of this franchise agreement. 9.4.3 Therm shall be a unit of gas providing 100,000 Btu of heat content adjusted for billing purposes under the rate schedules of Company on file with the Commission. 9.5 Equivalent Fee Requirement. The separate ordinance imposing the fee shall not be effective against Company unless it lawfully imposes and the City monthly or more often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority to require a franchise fee or to impose a tax. The "same or greater equivalent amount" shall be measured, if practicable, by comparing amounts collected as a franchise fee from each similar customer, or by comparing, as to similar customers the percentage of the annual bill represented by the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting, or to run machinery and appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Section 9.5, the foregoing conditions will be waived to the extent of such written consent. SECTION 10. PROVISIONS OF ORDINANCE. 10.1 Severability. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 10.2 Limitation on Applicability. This Ordinance constitutes a franchise agreement between the City and Company as the only parties and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. 7 19 Gas w/fee SECTION 11. AMENDMENT PROCEDURE. Either party to this franchise agreement may at any time propose that the agreement be amended to address a subject of concern and the other party will consider whether it agrees that the amendment is mutually appropriate. If an amendment is agreed upon, this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Clerk within 90 days after the date of final passage by the City of the amendatory ordinance. SECTION 12. PREVIOUS FRANCHISES SUPERSEDED. This franchise supersedes any previous Gas franchise granted to Company or its predecessor. Passed and approved: ,20_. Mayor Attest: City Clerk Date Published: 8 20 Customer Account Proposed Monthly Annual ACCOUNTTYPE Count Count Rate Revenue Revenue Residential 202 202 $ 4.00 $ 808 $ 9,696 Small Comm'I Demand 26 28 $ 8.00 $ 224 $ 2,688 Small Comm'I Non-Demand 35 58 $ 4.00 $ 232 $ 2,784 263 288 $ 1,264 $ 15,168 21 Franchise Fee Ordinance Centerville—NSP (gas) version 12152015 ORDINANCE NO. AN ORDINANCE IMPLEMENTING A GAS SERVICE FRANCHISE FEE ON NORTHERN STATES POWER COMPANY,A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING GAS SERVICE WITHIN THE CITY OF CENTERVILLE. THE CITY COUNCIL OF THE CITY OF CENTERVILLE DOES ORDAIN: SECTION 1. The City of Centerville Municipal Code is hereby amended to include reference to the following Special Ordinance. Subd. 1. Purpose. The Centerville City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas services within the City of Centerville. (a) Pursuant to City Ordinance a Franchise Agreement between the City of Centerville and Northern States Power Company, a Minnesota corporation,its successors and assigns, the City has the right to impose a franchise fee on Northern States Power Company, a Minnesota corporation,its successors and assigns,in an amount and fee design as set forth in Section 9 of the Northern States Power Company Franchise and in the fee schedule attached hereto as Schedule A. Subd. 2. Franchise Fee Statement. A franchise fee is hereby imposed on Northern States Power Company, a Minnesota Corporation,its successors and assigns,under its gas franchise in accordance with the schedule attached here to and made a part of this Ordinance, commencing with the NSPM ,20 billing month. This fee is an account-based fee on each premise and not a meter-based fee. In the event that an entity covered by this ordinance has more than one meter at a single premise, but only one account, only one fee shall be assessed to that account. If a premise has two or more meters being billed at different rates, the Company may have an account for each rate classification,which will result in more than one franchise fee assessment for gas service to that premise. If the Company combines the rate classifications into a single account, the franchise fee assessed to the account will be the largest franchise fee applicable to a single rate classification for energy delivered to that premise. In the event any entities covered by this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premise, the Company's manner of billing for energy used at all similar premises in the city will control. Subd. 3. )moment. The said franchise fee shall be payable to the City in accordance with the terms set forth in Section 9 of the Franchise. Subd. 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission may allow Company to add a surcharge to customer rates of city residents to reimburse Company for the cost of the fee. Subd. 5. Enforcement. Any dispute,including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 of the Franchise Agreement. 1 22 Franchise Fee Ordinance Centerville—NSP (gas)version 12152015 Subd. 6. Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days after the sending of written notice enclosing a copy of this adopted Ordinance to NSPM by certified mail. Collection of the fee shall commence as provided in above. Passed and approved: 20 Mayor Attest: City Clerk SEAL 2 23 Franchise Fee Ordinance Centerville—NSP (gas)version 12152015 SCHEDULE A Franchise Fee Rates: Gas Utility The franchise fee shall be in an amount determined by applying the following schedule per customer premise/per month based on metered service to retail customers within the City: Class Amount per month Residential $_ Commercial Non-Demand $_ Commercial Firm Demand $_ Small Interruptible $_ Medium and Large Interruptible $_ Firm Transportation $_ Interruptible Transportation $_ Franchise fees are submitted to the City on a quarterly basis as follows: January—March collections due by April 30. April—June collections due by July 31. July—September collections due by October 31. October—December collections due by January 31. 3 24 1 � �v v ........................... ........ ORDINANCE NO. 12- C OF LEXINGTON, COUNTY,MINNESOTA AN ORDINANCE OF E ELECTRIC FRANCHISE FEE ON CONEXUS ENERGY FOR PROVIDI ELECTRIC SERVICE WITHIN THE CITY OF LEXINGTON. THE CITY CO CIL OF THE CITY OF LEXINGTON, ANOKA COUNTY, MINNESOTA, ORDAINS: SECTION 1. The City of Lexington Code of Ordnances is hereby amended as follows: Subdivision 1. Purpose. The Lexington City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City of Lexington. (a) Pursuant to City Ordinance No. 12-_, a Franchise Agreement between the City and Connexus Energy, the City has the right to impose a franchise fee on Connexus Energy in amount and fee design as authorized in Section 9.1 of the Connexus Energy Franchise. (b) Pursuant to City Ordinance No. 12-_, the City exercised its right to impose a franchise fee on Connexus Energy. This includes the right to modify the fee amount with the consent of Connexus Energy as to amount and notice period, to which Connexus Energy has consented. Subd. 2. Franchise Fee Statement. Pursuant to Ordinance No. 12-_, the franchise fee imposed on Connexus Energy under its Electric Franchise is hereby amended. The amended fee schedule is attached hereto and made a part of this ordinance, commencing with the Connexus Energy's February 2013 billing month. Subd. 3. Payment and Fee Design. The franchise fee shall be payable to the City in accordance with the terms set forth in Section 9.4 of the Franchise. This fee is an account based fee on each premise and not a meter-based fee. In the event that an entity covered by this ordinance has more than one meter at a single premise, but only one account, only one fee shall be assessed to that account.. In the event any entities covered by this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premise, the Company's manner of billing for energy used at all similar premises in the city will control. Subd. 4. Record Support for Payment. Connexus Energy shall make each payment when due and,if requested by the City, shall provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles,refunds or error corrections. Subd. 5. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 the Franchise Agreement. 25 Subd. 6. Effective Date of Franchise Fee. Notwithstanding the effective date of this ordinance and notwithstanding any contrary provisions in the Franchise, the effective date of the fee collected under Subdivision 2 of this ordinance is the later of ten (10) days after the publication or after the sending of written notice enclosing a copy of this adopted ordinance upon Connexus Energy by certified mail. Subd. 7. Fee Review. The City Council shall begin a review of this Ordinance by November 30, 2013 to determine whether to continue, terminate or modify the fee. If the Council deems it to be in the City's best interest to continue the fee in its current form,no Council action is necessary. If the Council deems it to be in the City's best interest to terminate or modify the fee, the Council shall give Connexus at least sixty (60) days written notice prior to the proposed change. Subject to the City's rights under Minnesota law, the City shall obtain the consent of Connexus to any proposed increase in the fee but may unilaterally decrease or terminate the fee. Subd. 8. The City recognizes that Connexus Energy will surcharge its customers in the City the amount of the fee. SECTION 2. This ordinance takes effect as provided herein. Read and passed by the City Council of the City of Lexington this_th day of 2012.EXHIBIT A CONNEXUS ENERGY ELECTRIC FRANCHISE FEE SCHEDULE Class Fee Per Premise Per Month Residential $2.25 Small Commercial(Non-demand) $3.75 General Commercial(Demand) $130.00 FRANCHISE FEES ARE TO BE COLLECTED BY THE UTILITY IN THE AMOUNTS SET FORTH IN THE ABOVE SCHEDULE,AND SUBMITTED TO THE CITY ON A QUARTERLY BASIS AS FOLLOWS: January through March collections due by April 30. April through June collections due by July 31. July through September collections due by October 31. October through December collections due by January 31. 26 .I'll .................................................... .........''I.................... ELECTRIC FRANCHISE ORDI CE ORDINANCE N CITY OF LEXINGT ,ANOKA,COUNTY,MINNESOTA AN ORDINANCE G ING TO CONNEXUS ENERGY, A MINNESOTA COOPERATIVE CO RATION,ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, O RATE, REPAIR AND MAINTAIN IN THE CITY OF LEXINGTON, MINNESOT AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, UDING NECESSARY POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC GROUNDS AND PUBLIC WAYS OF THE CITY FOR SUCH PURPOSES. THE CITY COUNCIL OF THE CITY OF LEXINGTON, ANOKA COUNTY, MINNESOTA,ORDAINS: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: 1.1 C4. The City of Lexington,County of Anoka,State of Minnesota. 1.2 City Utility System. Facilities used for providing non-energy related public utility service owned or operated by City or agency thereof, including sewer and water service, but excluding facilities for providing heating,lighting or other forms of energy. 1.3 Company. Connexus Energy, a Minnesota cooperative corporation,its successors and assigns. 1.4 Electric Facilities. Electric transmission and distribution towers, poles, lines, guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by Company for the purpose of providing electric energy for public use. 1.5 Notice. A written notice served by one parry on the other party referencing one or more provisions of this Ordinance. Notice to Company shall be mailed to the Chief Executive Officer, Connexus Energy, 14601 Ramsey Boulevard N.W., Ramsey, Minnesota 55303-6024. Notice to the City shall be mailed to the City Administrator, City Hall, 9180 Lexington Avenue, Lexington, MN 55014. Either party may change its respective address for the purpose of this Ordinance by written notice to the other parry. 1.6 Public Ground. Land owned by the City for park, open space or similar purpose, which is held for use in common by the public. 1.7 Public Way. Any street,alley,walkway or other public right-of-way within the City. 1 27 SECTION 2. ADOPTION OF FRANCHISE. 2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from the date passed and approved by the City, the right to transmit and furnish electric energy for light, heat, power and other purposes for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. For these purposes, Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Grounds and Public Ways of City, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to such reasonable regulations as may be imposed by the City pursuant to ordinance and to the further provisions of this franchise agreement. 2.2 Effective Date; Written Acceptance. This franchise agreement shall be in force and effect from and after passage of this Ordinance, its acceptance by Company, and its publication as required by law. The City, by Council resolution, may revoke this franchise agreement if Company does not file a written acceptance with the City within 90 days after publication. 2.3 Service and Rates. The service to be provided and the rates to be charged by Company for electric service in City are established by Company's Board of Directors. The area within the City in which Company may provide electric service is subject to the provisions of Minnesota Statutes, Section 216B.40. 2.4 Publication Expense. The expense of publication of this Ordinance will be paid by City and reimbursed to City by Company. 2.5 Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used, or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. SECTION 3. LOCATION, OTHER REGULATIONS. 3.1 Location of Facilities. Electric Facilities shall be located, constructed and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt normal operation of any City Utility System Electric. Facilities shall be located on Public Grounds as determined by the City. Company's construction, reconstruction, operation, repair, maintenance and location of Electric Facilities shall be subject to permits if required by separate ordinance and to other reasonable regulations of the City to the extent not inconsistent with the terms of this franchise agreement. Company may abandon underground Electric Facilities in place,provided at the City's request, Company will remove such underground Electric Facilities which interfere with a City improvement project, but only to the extent such Electric Facilities are uncovered by excavation 2 28 as part of the City improvement project, and restore the Public Way in accordance with Minnesota Rule 7819.1100. 3.2 Field Locations. Company shall provide field locations for its underground Electric Facilities within City consistent with the requirements of Minnesota Statutes,Chapter 216D. 3.3 Street Openings. Company shall not open or disturb any Public Ground or Public Way for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed on Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. Company may,however, open and disturb any Public Ground or Public Way without permission from the City where an emergency exists requiring the immediate repair of Electric Facilities. In such event Company shall notify the City by telephone to the office designated by the City as soon as practicable. Not later than the second working day thereafter, Company shall obtain any required permits and pay any required fees. 3.4 Restoration. After undertaking any work requiring the opening of any Public Ground or Public Way, Company shall restore the same in accordance with Minnesota Rule 7819.1100, including paving and its foundation, to as good a condition as formerly existed, and shall maintain any paved surface in good condition for two years thereafter. The work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground or Public Way in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.4, but the City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the City, of a person or entity obtaining the City's permission to install,replace or maintain facilities in a Public Way. 3.5 Avoid Damage to Electric Facilities. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Electric Facilities while performing any activity. 3.6 Notice of Improvements. No less than four weeks prior to implementation, the City must give Company reasonable notice of plans for improvements to Public Grounds or Public Ways where the City has reason to believe that Electric Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work,and (v) if more than one Public Ground or Public Way is involved, the order in which the work is to proceed. The notice must be given to Company within a sufficient length of time in advance of the actual commencement of the work to permit Company to make any necessary additions,alterations or repairs to its Electric Facilities. 3.7 Shared Use of Poles. Company shall make space available on its poles or towers for City fire,water utility,police or other City facilities upon terms and conditions acceptable to Company whenever such use will not interfere with the use of such poles or towers by Company, by another 3 29 electric utility, by a telephone utility, or by any cable television company or other form of communication company. In addition, the City shall pay for any added cost incurred by Company because of such use by City. SECTION 4. RELOCATIONS. 4.1 Relocation of Electric Facilities in Public Ways. If the City determines to vacate a Public Way for a City improvement project,or at City's cost to grade,regrade, or change the line of any Public Way, or construct or reconstruct any City Utility System in any Public Way, it may order Company to relocate its Electric Facilities located therein if relocation is reasonably necessary to accomplish the City's proposed public improvement. Except as provided in Section 4.3, Company shall relocate its Electric Facilities at its own expense. The City shall give Company reasonable notice of plans to vacate for a City improvement project, or to grade,regrade,or change the line of any Public Way or to construct or reconstruct any City Utility System. If a relocation is ordered within five years of a prior relocation of the same Electric Facilities, which was made at Company expense, the City shall reimburse Company for non-betterment costs on a time and material basis, provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area,Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconstruct at its own expense its Electric Facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. 4.2 Relocation of Electric Facilities in Public Ground. City may require Company, at Company's expense,to relocate or remove its Electric Facilities from Public Ground upon a finding by City that the Electric Facilities have become or will become a substantial impairment to the existing or proposed public use of the Public Ground. 4.3 Projects with Federal Funding. City shall not order Company to remove or relocate its Electric Facilities when a Public Way is vacated,improved or realigned for a right-of-way project or any other project which is financially subsidized in whole or in part by the Federal Government or any agency thereof,unless the reasonable non-betterment costs of such relocation are first paid to Company. The City is obligated to pay Company only for those portions of its relocation costs for which City has received federal funding specifically allocated for relocation costs in the amount requested by the Company,which allocated funding the City shall specifically request. Relocation, removal or rearrangement of any Company Electric Facilities made necessary because of a federally- aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the rights herein granted to Company are valuable rights. 4.4 No Waiver. The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Ground or Public Way was established, or Company's rights under state or county permit. 4 30 SECTION 5. TREE TRIMMING. Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of any Electric Facilities installed hereunder, provided that Company shall save the City harmless from any liability arising therefrom, and subject to permit or other reasonable regulation by the City. SECTION 6. INDEMNIFICATION. 6.1 Indemnity of City. Company shall indemnify, keep and hold the City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Electric Facilities located in the Public Grounds and Public Ways. The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner, of acts reasonably deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. 6.2 Defense of City. In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City,which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City and Company, in defending any action on behalf of the City, shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. SECTION 7. VACATION OF PUBLIC WAYS. The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. Except where required for a City improvement project, the vacation of any Public Way, after the installation of Electric Facilities, shall not operate to deprive Company of its rights to operate and maintain such Electric Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to Company for failure to specifically preserve a right-of-way under Minnesota Statutes, Section 160.29. In accordance with Minnesota Rules, Part 7819.3200,if City's order directing vacation of the Public Way does not require relocation of Company's Electric Facilities, the vacation proceeding shall not be deemed to deprive Company of its right to continue to use the right-of-way of the former Public Way for its Electric Facilities installed prior to such order of vacation. 5 31 SECTION 8. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. SECTION 9. FRANCHISE FEE. 9.1 Fee Schedule. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on Company, the City may impose on Company a franchise fee by collecting the amounts indicated in a Fee Schedule set forth in a separate ordinance from each customer in the designated Company Customer Class. The parties have agreed that the franchise fee collected by the Company and paid to the City in accordance with this Section 9 shall not exceed 5% of the Company's Gross Revenues, as hereinafter defined, by collecting the amounts calculated on a flat fee basis. 9.2 Separate Ordinance. The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, and that separate ordinance shall dictate the date upon which collection of that franchise fee shall commence. Section 2.5 shall constitute the sole remedy for solving disputes between Company and the City in regard to the interpretation of, or enforcement of, the separate ordinance. No action by the City to implement a separate franchise fee ordinance will commence until this Ordinance is effective. A separate ordinance which imposes a lesser franchise fee on the residential class of customers than the maximum amount set forth in Section 9.1 above shall not be effective against Company unless the fee imposed on each other customer classification is reduced proportionately in the same or greater amount per class as the reduction represented by the lesser fee on the residential class. 9.3 Terms Defined. For the purpose of this Section 9,the following definitions apply: 9.3.1 "Customer Class" shall refer to the classes listed on the Fee Schedule as defined or determined in Company's electric tariffs on file with the Commission. 9.3.2 "Fee Schedule" refers to the schedule in Section 9.1 setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Class added by Company to its electric tariffs after the effective date of this franchise agreement, or may be annually amended to reflect changes in the franchise fees imposed by the City. 9.3.3 "Gross Revenue" means all sums, excluding any surcharge or similar addition to the Company's charges to customers for the purpose of reimbursing the Company for the cost resulting from the franchise fee, received by the Company from the sale of electricity to its retail customers within the corporate limits of the City. 9.4 Collection of the Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for electric service in each class. The payment shall be due the last business day of the month following the period for which the payment is made. The 6 32 franchise fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements and not occur more often than annually and no change shall require a collection from any customer for electric service in excess of the amounts specifically permitted by this Section 9. No franchise fee shall be payable by Company if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for electric service. Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. In addition, the Company agrees to provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles, refunds or error corrections. 9.5 Equivalent Fee Requirement. The separate ordinance imposing the fee shall not be effective against Company unless it lawfully imposes and the City monthly or more often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority to require a franchise fee or to impose a tax. The "same or greater equivalent amount" shall be measured, if practicable, by comparing amounts collected as a franchise fee from each similar customer, or by comparing, as to similar customers the percentage of the annual bill represented by the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting, or to run machinery and appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Section 9.5, the foregoing conditions will be waived to the extent of such written consent. 9.6 Notification Requirement. In addition to the required procedings and notification of the public by the City, a joint letter will be sent on behalf of the City and Company clearly explaining the purpose and use of the fee, the fee schedule including frequency of billing which clearly state Connexus is required under law to bill and collect the fee and distribute funds back to the City. Connexus is not profiting in any way by administer the franchise fee. SECTION 10. PROVISIONS OF ORDINANCE. 10.1 Severability. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 10.2 Limitation on Applic�. This Ordinance constitutes a franchise agreement between the City and Company as the only parties, and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any 7 33 such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. SECTION 11. AMENDMENT PROCEDURE. Either party to this franchise agreement may at any time propose that the agreement be amended to address a subject of concern and the other party will consider whether it agrees that the amendment is mutually appropriate. If an amendment is agreed upon, this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Clerk within 90 days after the date of final passage by the City of the amendatory ordinance. SECTION 12. PREVIOUS FRANCHISES SUPERSEDED. This franchise supersedes any previous electric franchise granted to Company or its predecessor. This Ordinance shall be in full force and effect from and after its adoption and publication as required by law. Passed by the City Council of the City of Lexington this_day of Mayor Attest: City Clerk Date Published: 8 34 Mike Ericson 'rom: Rod Morton <Rod.Morton@connexusenergy.com> went: Tuesday, November 03, 2015 9:48 AM To: Mike Ericson Cc: Ellie Paulseth; Ellie Paulseth (ellen.paulseth@co.washington.mn.us); Kurt B.Glaser Subject: Connexus/Centerville resident count information Attachments: Centerville 2015 v2.xlsx Mike, Attached is the customer and account information for Centerville. In preparation for Connexus to establish the rate code for the proper City residents, please review the attachment. Please note: • Our electric services data may not match city boundaries. We encourage the city to review the addresses in the "Account Detail"tab to assure they are Centerville residents and to check to see if an area was inadvertently missed. • Please highlight accounts that are not in the city limits that need to be removed. • Please add addresses that may not be included in the file. I have previously sent the Draft Franchise and Draft Franchise Fee documents. Let me know if I can be of further assistance. thank you. Rod Rod Morton Manager-Risk Management and Revenue Recovery I Connexus®Energy Phone/Fax:763.3 23.2734 Rod.Morton@connexuseneriZy.com www.connexusenerQy.com ---Owned by the members we serve--- Customer Account Proposed Monthly Annual ;— ACCOUNTTYPE Count Count Rate Revenue Revenue Residential 202 - 202 $ 4.00 ; $ 808 $ 9,696 Small Comm'I Demand 26 28 $ 8.00 ; $ 224 $ 2,688 Small Comm'I Non-Demand 35 58 $ 4.00 , $ 232 $ 2,784 263 288 $ 1,264 $ 15,168 This email has been scanned by the Symantec Email Security.cloud service. Gov more information please visit http://www.symanteccloud.com 1 35 October XX, 2015 XXXXXX XXXXXYX XXXX, MN XXXXXX Re: Account Number: XXXXX Important information regarding City of XXXX franchise fee Effective your October 2015 electric bill, a$XX City of XXXXX franchise fee will be added to your Connexus Energy monthly statement. The new line item will be clearly stated as City ofX;F=Franchise Fee. The City of XXXXXX can legally impose a franchise fee on gas and electric utilities that provide service within their city limits. The revenue collected by Connexus Energy will be distributed back to the City on a quarterly basis, resulting in no financial gain to Connexus Energy or their members. If you have any questions regarding this fee,please contact the City of XXXX at 763-XXX-XXX or www.XXXXX.mn.or . Sincerely, Don Haller,Vice President Member& Community Services 36 Franchise Fee Considerations Resident proactive communication/feedback • Surveys • Workshops • Newspaper • Fees applied to a specific project Options for funding • Tax base • Franchise Fee • Other Rate Design • Flat vs percentage • Amount • Member classification (Residential, commercial, etc.) o (See Franchise Fee Agreement) ■ Bill boards, irrigation, telephone/cable Expenses • Legal review • Implementation (Staff time, publications, marketing, etc) • Increased phone calls and resident reaction. 37 Centerville- Franchise Centerville - Connexus 1215201512152015 ELECTRIC FRANCHISE ORDINANCE ORDINANCE NO. 15- CITY OF CENTERVILLE,ANOKA COUNTY,MINNESOTA AN ORDINANCE GRANTING TO CONNEXUS ENERGY, A MINNESOTA COOPERATIVE CORPORATION,ITS SUCCESSORS AND ASSIGNS,PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF CENTERVILLE, MINNESOTA, AN ELECTRIC Dj$ RIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY'-AA&ES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING -,di ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND OTHERS, ND ATO U$E THE PUBLIC GROUNDS AND PUBLIC WAYS OF THE CITY FOR SU�CAI_PURPOSES.s- THE CITY COUNCIL OF THE CITE =.OF CENTERVILE ?.ANOKA COUNTY, MINNESOTA,ORDAINS: �< SECTION 1. DEFINITIONS. For purposes of this Ordinance `-the`1gllowing capitalized terms listed in alphabetical order shall have the following meanings: 1.1 Com. T e City of'Centerville,County € nig a;-State of Minnesota. 1.2 City Util System.,, Facilities used for providing non-energy related public utility service owned or operated-by City©r agency thereof;including sewer and water service, but excluding facilities for providing heating;]i litirig of other forms'of energy. I S Company. Conners Energy, a Minnesota cooperative corporation,its successors and assigns. 1.4 ' Electric Facilities. Electric transmission and distribution towers, poles, lines, guys, anchors, conduits;. fixtures, and necessary appurtenances owned or operated by Company for the purpose of providing electric energy for public use. 1.5 Notice. A written notice served by one party on the other party referencing one or more provisions of this Ordinance. Notice to Company shall be mailed to the Chief Executive Officer, Connexus Energy, 14601 Ramsey Boulevard N.W., Ramsey, Minnesota 55303-6024. Notice to the City shall be mailed to the City Administrator, 1880 Main Street, Centerville, MN 55038. Either party may change its respective address for the purpose of this Ordinance by written notice to the other party. 1.6 Public Ground. Land owned by the City for park, open space or similar purpose, which is held for use in common by the public. 1.7 Public Way. Any street,alley,walkway or other public right-of-way within the City. 1 38 Centerville-Franchise Centerville- Connexus 1215201512152015 SECTION 2. ADOPTION OF FRANCHISE. 2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from the date passed and approved by the City, the right to transmit and furnish electric energy for light, heat, power and other purposes for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future. For these purposes, Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Grounds and Public Ways of City, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplishthese purposes, subject, however, to such reasonable regulations as may be imposed by the City pursu6bf to ordinance and to the further provisions of this franchise agreement. 2.2 Effective Date-, Written Acceptance. This franchise agreement shall be in force and effect from and after passage of this Ordinance, its acceptance by Company, and its publication as required by law. The City, by Council resoluti n, }may revoke this fra' chise agreement if Company '°'. does not file a written acceptance with the City 90 days after publicativ, 2.3 Service and Rates. The service to be provided aid the rates to be Charged by Company for electric service in City are established by Company s,tp� A' Directors. The area within the City V in which Company may provide electric=service is subje4 t the provisions of Minnesota Statutes, Section 216B.40. a, 2.4 Publication,.�Expense. Theb`expense of;publication o�;this Ordinance will be paid by City and reimbursed toity-by Co�mpany. £i ` 2.5 Dispute Resolution. If either party asserts that the other party is in default in the perfortnance of any obligation hereunder, the cotiAplaining party shall notify the other party of the default and the desired remedy; The-notification shall be written. Representatives of the parties must promptly meet and attempt in gocid faith to Aeggtiate a-resolution of the dispute. If the dispute is not resolv6d within 30 days'df the whiten notice, tie parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used,'or if the parties ark unable to olve th r` e dispute within 30 days after first meeting with the selected mediator,either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. SECTION 3. LOCATION,OTHER REGULATIONS. 3.1 Location of Facilities. Electric Facilities shall be located, constructed and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt normal operation of any City Utility System Electric. Facilities shall be located on Public Grounds as determined by the City. Company's construction, reconstruction, operation, repair, maintenance and location of Electric Facilities shall be subject to permits if required by separate ordinance and to other reasonable regulations of the City to the extent not inconsistent with the terms of this franchise agreement. Company may abandon underground Electric Facilities in place,provided at the City's request, Company will remove such underground Electric Facilities which interfere with a City improvement project, but only to the extent such Electric Facilities are uncovered by excavation 2 39 Centerville- Franchise Centerville - Connexus 1215201512152015 as part of the City improvement project, and restore the Public Way in accordance with Minnesota Rule 7819.1100. 3.2 Field Locations. Company shall provide field locations for its underground Electric Facilities within City consistent with the requirements of Minnesota Statutes, Chapter 216D. 3.3 Street Openings. Company shall not open or disturb any Public Ground or Public Way for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed on Company shall not be more burdensome than those imposed on otheriiies for similar facilities or work. Company may,however, open and disturb any Public Grougda r'Public Way without permission from the City where an emergency exists requiring the immediati r pair of Electric Facilities. In such event Company shall notify the City by telephone to the office`°designated by the City as soon as practicable. Not later than the second working day thereafter, Company shall obtain any required permits and pay any required fees. 3.4 Restoration. After undertaking any.work requiring the opening of any Public Ground or Public Way, Company shall restore the same in-accordance with Minneiko Rule 7819.1100, including paving and its foundation, to.as good a conshbri� formerly existed, and shall maintain any -. . paved surface in good condition for two years thereafter. The work shall be completed as promptly as weather permits, and if Company shall tit prom,tly perform`aid complete the work, remove all dirt, rubbish, equipment and material, and put`thc Pudic Ground or`Public Way in the said condition, the City shall have, after demand to CompanyN�9 cure arrcl e passage-Jpf a reasonable period of time following the demand,.=but not to exceed five-lays, thtilit tt%make the restoration at the expense of _...: Company. Company skull pay to the City the`cost°off such work done for or performed by the City. This remedy shall be in'addition to any other remedy available to the City for noncompliance with this Section 3.4, but the City -hereby,=waives any re *' ement for Company to post a construction performance bond, certificate of iisurance,'letter o redit or any other form of security or assurance V.- that may be required,under a separate existing or future ordinance of the City, of a person or entity obtairuii the City's permission to install,replace or maintain facilities in a Public Way. 3.5 - Avoid Damage to Electric=Facilities. Nothing in this Ordinance relieves any person from liability arising out of the iailure to exercise reasonable care to avoid damaging Electric Facilities while performinglany activity. - 3.6 Notice of Improvements. No less than four weeks prior to implementation, the City must give Company reasonable notice of plans for improvements to Public Grounds or Public Ways where the City has reason to believe that Electric Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Ground or Public Way is involved, the order in which the work is to proceed. The notice must be given to Company within a sufficient length of time in advance of the actual commencement of the work to permit Company to make any necessary additions,alterations or repairs to its Electric Facilities. 3.7 Shared Use of Poles. Company shall make space available on its poles or towers for City fire,water utility,police or other City facilities upon terms and conditions acceptable to Company whenever such use will not interfere with the use of such poles or towers by Company, by another 3 40 Centerville- Franchise Centerville- Connexus 1215201512152015 electric utility, by a telephone utility, or by any cable television company or other form of communication company. In addition, the City shall pay for any added cost incurred by Company because of such use by City. SECTION 4. RELOCATIONS. 4.1 Relocation of Electric Facilities in Public Ways. If the City determines to vacate a Public Way for a City improvement project,or at City's cost to grade,regrade,or change the line of any Public Way, or construct or reconstruct any City Utility System in any Public Way, it may order Company to relocate its Electric Facilities located therein if l6cation is reasonably necessary to accomplish the City's proposed public improvement. ExcelSt'as provided in Section 4.3, Company shall relocate its Electric Facilities at its own expense when replacing existing facilities with same or similar facilities. If current facilities are above ground and City requires them to be buried, City shall pay for the difference, (if any) of burying facilities versus leaving above ground. The City shall give Company reasonable notice of plans to vacate fo�;r:a-City improvement pject, or to grade, regrade, or change the line of any Public Way or to construct bd` reconstruct any City ii`ti ity System. If a relocation is ordered within five years of a prior relocation of the same Electric Facihattes, which was made at Company expense, the City shall reimburse Companyfor,non4letterment costs on a time and material basis, provided that if a subsequent kl6cation is required because of the extension of a City Utility System to a previously unserved area,'Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires,rCompany to relocate, remove, replace or reconstruct at its own expense its Electric Facilities where such-relocation,reMoval, replacement or reconstruction is solely for the convenience of the City'ind is not,-: ably necessary for the construction or reconstruction of a Public Way or City Utility'S�,stem_or=other City improvement. f 4.2 Relocation of Electric Facilities ,in Public Ground. City may require Company, at Company's expense,to relocate or remove its Electric Facilities from Public Ground upon a finding by City that the Electric Facilities_have become or will become a substantial impairment to the existing or proposed public use of the Public.Ground. 4 Projects with-Federal Ful. City shall not order Company to remove or relocate its Electric Ncilities when a Public Way is vacated,improved or realigned for a right-of-way project or any otherproject which is financially subsidized in whole or in part by the Federal Government or any agency thereof,unless the-reasonable non-betterment costs of such relocation are first paid to Company. The City is obligated'to pay Company only for those portions of its relocation costs for which City has received federal funding specifically allocated for relocation costs in the amount requested by the Company,which allocated funding the City shall specifically request. Relocation, removal or rearrangement of any Company Electric Facilities made necessary because of a federally- aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46,as supplemented or amended. It is understood that the rights herein granted to Company are valuable rights. 4.4 No Waiver. The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Ground or Public Way was established, or Company's rights under state or county permit. 4 41 Centerville-Franchise Centerville- Connexus 1215201512152015 SECTION 5. TREE TRIMMING. Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of any Electric Facilities installed hereunder, provided that Company shall save the City harmless from any liability arising therefrom, and subject to permit or other reasonable regulation by the City. SECTION 6. INDEMNIFICATION. 6.1 Indemnity of Citi. Company shall indemnify; keep and hold the City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Electric Facilities located in the Public Grounds and Public Ways. The City shall not be indemnified for losses or claims occasioned through its own negligence except for loses or claims arising out of or alleging the City's negligence as to the issuanceoh3ermits for, or inspection of, Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner, of acts reasonably deemed hazardous by< Company, and such performance is nevertheless ordered or directed by City after notice of 66ml5any`s determination. 6.2 Defense of City. In th6-.event a suit is brought against the City under circumstances where this agreement to indemnify applies;Company at its sole cost and expense shall defend the City in such suit if written notice_thereof is promptly given-t6-Company-vgd-in a period wherein Company is not prejudiced by lack-of sael notice. If:,Companq is required to indemnify and defend it will thereafter -_-- have control of such ation, but.Company may not settle such litigation without the consent of the City,which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense -or immunity otherwise available to the City and Company, in defending any action on behalf of the City, shall be gntitled to assert in any action every defense or immunity that the City could assert in its own'behalf. SECTION 7. VACATION-OF FUBUC WAYS. The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. Except where required for a City improvement project, the vacation of any Public Way, after the installation of Electric Facilities, shall not operate to deprive Company of its rights to operate and maintain such Electric Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to Company for failure to specifically preserve a right-of-way under Minnesota Statutes, Section 160.29. In accordance with Minnesota Rules,Part 7819.3200,if City's order directing vacation of the Public Way does not require relocation of Company's Electric Facilities, the vacation proceeding shall not be deemed to deprive Company of its right to continue to use the right-of-way of the former Public Way for its Electric Facilities installed prior to such order of vacation. 5 42 Centerville- Franchise Centerville- Connexus 1215201512152015 SECTION 8. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. SECTION 9. FRANCHISE FEE. 9.1 Fee Schedule. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on Company, the City mavl`impose on Company a franchise fee by collecting the amounts indicated in a Fee Schedule set .fbrtti in a separate ordinance from each customer in the designated Company Customer Class. The parties have agreed that the franchise fee collected by the Company and paid to the City in accordance with this Section 9 shall not exceed 5% of the Company's Gross Revenues, as hereinafter defined, by collecting the amounts calculated on a flat fee basis. 9.2 Separate Ordinance. The franchise-fee shall be imposed by a`separate ordinance duly adopted by the City Council, and that separate`-Ordinance-shall dictate the,-`-:date upon which collection of that franchise fee shall"commence. Section a2.8 shall constitute the sole remedy for solving disputes between Company acid the City in regard to the interpretation of, or enforcement of, the separate ordinance. No action b .the City to implement a separate franchise fee ordinance will commence until this Ordinance is'-effective. -A-separate,ordinance which imposes a lesser franchise fee on the residential class of customers than ithg max mWn amount set forth in Section 9.1 above shall not be effective,against Co . "-any unless the fee imposed on each other customer classification is reduced proportionately in th-�same or grea&i amount per class as the reduction represented by the lesser fee on the residential class. 9.3 Terns Defined. For the purpose of this Section 9, the following definitions apply: 9.3.1 "CUsXe mer Mass" shall refer to the classes listed on the Fee Schedule as defined or determined in Cb`"pany's electric tariffs on file with the Commission. 9.3.2 "Fee Schedule" refers to the schedule in Section 9.1 setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Class added by Company to its electric tariffs after the effective date of this franchise agreement, or may be annually amended to reflect changes in the franchise fees imposed by the City. 9.3.3 "Gross Revenue" means all sums, excluding any surcharge or similar addition to the Company's charges to customers for the purpose of reimbursing the Company for the cost resulting from the franchise fee, received by the Company from the sale of electricity to its retail customers within the corporate limits of the City. 9.4 Collection of the Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for electric service in each class. The payment shall be 6 43 Centerville- Franchise Centerville- Connexus 1215201512152015 due the last business day of the month following the period for which the payment is made. The franchise fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements and not occur more often than annually and no change shall require a collection from any customer for electric service in excess of the amounts specifically permitted by this Section 9. No franchise fee shall be payable by Company if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for electric service. Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City.W its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. In addition, the Company agrees to provide at the time of each payment a statement summatizing how the franchise fee payment was detemiined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles,refunds or error corrections. g 9.5 Equivalent Fee Requirement. The separate ordinance imposing-.tie- fee shall not be effective against Company unless it la,�fully imposes and.the City monthly or more-often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided tha4�As to such a suppliers the City has the authority to require a franchise fee or to impose a tax. The "same of greater equivalent amount" shall be measured, if practicable, by comparing-:amounts colle4tl as a fir - se fee fropi each similar customer, or by comparing, as to similar"customers the percentage,-of-tlie_,=annual bill represented by the amount collected for franchise fee purposes,, The franchise�ee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting;.or to run machinery and appliances, but shall not apply to energy sales for`°the purpose of providing-fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Section 9.5, the foregoing conditions will be waived to the extent of such written consent. ' 9.6 Notification Regttikement. in addition to the required proceedings and notification of the public by the City, a joint, letter will be sent on behalf of the City and Company clearly explaining the purpose and use=-of the fee, the fee schedule including frequency of billing which clearly state Connexus is required under law to bill and collect the fee and distribute funds back to the City. Connexus is not profiting in any way by administer the franchise fee. SECTION 10. PROVISIONS OF ORDINANCE. 10.1 Severability. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 10.2 Limitation on Al2plicability. This Ordinance constitutes a franchise agreement between the City and Company as the only parties, and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any 7 44 Centerville - Franchise Centerville- Connexus 1215201512152015 such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. SECTION 11. AMENDMENT PROCEDURE. Either party to this franchise agreement may at any time propose that the agreement be amended to address a subject of concern and the other party will consider whether it agrees that the amendment is mutually appropriate. If an amendment is agreed upon, this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effo ttive upon the filing of Company's written consent thereto with the City Clerk within 90 days after the date of final passage by the City of the amendatory ordinance. SECTION 12. PREVIOUS FRANCHISES SUPERSEDED. F electric franchise granted to Company or its This franchise supersedes any previBu predecessor. This Ordinance shall be in full force #i4 effect from and`a£t&its adoption and publication as required by law. Passed by the City Council of the City of Centerville, Minnesota, this — day of 2016. ; Mayor Attest: City Clerk Date Published: 8 45 Centerville—Connexus Franchise version 12152015 ORDINANCE NO. 15- CITY OF CENTERVILLE,ANOKA COUNTY,MINNESOTA AN ORDINANCE MODIFYING THE ELECTRIC FRANCHISE FEE ON CONEXUS ENERGY FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF CENTERVILLE. THE CITY COUNCIL OF THE CITY OF CENTERVILLE, ANOKA COUNTY, MINNESOTA, ORDAINS: SECTION 1. The City of Centerville Code of Ordnances is hereby amended as follows: Subdivision 1. Purpose. The Centerville City-Council has determined that it is in the best interest of the City to impose a franchise fee on triose public utility cothpanies that provide natural gas and electric services within the City of Centerville. (a) Pursuant to City Ordinance No. 15-_; a Franchise Agreement between the City and Connexus Energy, the City has the right to impose a franchise fee on Connexus Energy in amount and fee design as authorized in Section 9.1 of the Connexus Energy Franchise. (b) Pursuant to City Ordinance No.. 15-"i, the City exercised its right to impose a franchise fee on Connexus Energy. This includes the right td modify the'fee amount with the consent of Connexus Energy as to amount and notice period,to which Connexus Energy has consented. Subd. 2. Franchise Fee Statement. Pursuant to Ordinance No. 15-_, the franchise fee imposed on Connexus Energy under its Electric'-Franchise is hereby amended. The amended fee schedule is attachedhereto and made a part of this ordinance, commencing with the Connexus Energy's March 2016 billing month. Subd. 3. Payment and Fee Design. The franchise fee shall be payable to the City in accordance with the terms set-forth in Section 9.4 of the Franchise. a)This fee is an account based fee and not a meter based fee. An account includes all electric meters located on a single property or premises that have the same address and property owner. b) Properties with a single address and owner shall pay the largest fee that applies to any one of their meters. d) Separately metered space rented to tenants other than the owner shall pay a fee for each tenant meter. e) The City Administrator, or his designee,is authorized to determine the appropriate implementation of this Section 3.2. Appeals from decisions of the staff may be taken to the City Council. 46 Centerville—Connexus Franchise version 12152015 Subd. 4. Record Support for Payment. Connexus Energy shall make each payment when due and,if requested by the City, shall provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles,refunds or error corrections. Subd. 5. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 the Franchise Agreement. Subd. 6. Effective Date of Franchise Fee. Notwithstanding the effective date of this ordinance and notwithstanding any contrary provisions in the Franchise, the effective date of the fee collected under Subdivision 2 of this ordinance is the later of ten (10) days after the publication or after the sending of written notice enclosing a copy of this adopted ordinance upon Connexus Energy by certified mail. Subd. 7. Fee Review. The City Council sliall begin a review of'this Ordinance by Centerville to determine whether to continue, terminate A-.J edify the fee. If the Council deems it to be in the City's best interest to continue the fee in its current form, no.Council action is necessary. If the Council deems it to be in the City's best interest to terminate,or modify the f'ee, the Council shall give Connexus at least sixty (60) days written notice prior-to the proposed change. Subject to the City's rights under Minnesota law, ~'�'� �- r'��" �' ~-�~ �ksi ~ of C=an....__.. to afty proposed Subd. 8. The City recognizes that Connexus Energy will surcharge its customers in the City the amount of the fee. SECTION 2. This ordinance takes;effect as provided herein. Read and passed by the City Council of the City of Centerville,this_th day of January,2016. EXHIBIT A CONNEXUS ENERGY ELECTRIC FRANCHISE FEE SCHEDULE Class Fee or%Per Month Residential Small Commercial/Industrial (Non Demand) General Commercial/Industrial (Demand) Large Commercial/Industrial (> 1 MW Demand) Outdoor Advertising (Billboards),Non-Metered Cable/TV/Phone Irrigation services,Lift Station services,Siren services 47 Centerville—Connexus Franchise version 12152015 Street Lights Wells &Pumps (city well) FRANCHISE FEES ARE TO BE COLLECTED BY THE-UfILITY IN THE AMOUNTS r SET FORTH IN THE ABOVE SCHEDULE,AND S 3TTS F-D TO THE CITY ON A QUARTERLY BASIS AS FOLLOWS: 'b January through March collections due by Ap through r A June collections due b July 31. 4. April h J y J y ..:;. < July through September collections due by October 1, - a October through December collectio sldue by Al w$ 48 Mike Ericson tom: Meyer, Kyle E <kyle.meyer@centerpointenergy.com> went: Tuesday, December 01, 2015 10:29 AM To: Ku rtG laser@GlaserLaw.Net Cc: Mike Ericson Subject: CenterPoint Energy Gas Franchise Agreement Attachments: Franchise Fee - Model Ordinace 03-02-15.docx; Franchise renewal notification and process letter- Rev l.docx; Franchise Agreement- Model Ordinance 03-02-15.docx; Summary ordinance model.docx Kurt, Attached are both of the model ordinances. Any changes, please use track changes if possible and send them back to me. Thanks and it was nice meeting you yesterday Kyle Meyer Field Supervisor Office 763-785-5426 Cell 612-790-3609 9320 Evergreen Blvd NW, Suite B Coon Rapids,MN 1 55433 1 HSPtoday.com t�eiJ ►�Ce Holte Service,flus. EMN This email has been scanned by the Symantec Email Security.cloud service. For more information please visit http://www.symanteccloud.com 1 49 Crit _ nt, 10/23/2015 City of Centerville Attn: Michael Ericson 1880 Main Street Centerville, MN 55038 Dear Mr. Ericson My name is Kyle Meyer and I have been asked to facilitate renewing the franchise agreement between CenterPoint Energy and the City of Centerville that will expire on 6/5/2016. 1 have included the standard ordinance which was developed in conjunction with the League of Minnesota Cities. Please review the document and let me know if you have any questions or concerns regarding the language. We should discuss and agree to any proposed changes prior to the ordinance going in front of the council for approval. To make this as easy as possible I have included an overview of the renewal process. 1. Any proposed changes are discussed and an agreement is reached. 2. City staff presents the agreement to the city council for approval. 3. Once approved the Mayor and City Clerk sign and date the document, the city publishes a summary of the ordinance in the local paper; the city also provides an affidavit of publication and a "tear sheet" of said publication. These three items are returned to CenterPoint Energy. CenterPoint Energy will reimburse the city for the publication expense. 4. We will process the agreement renewal and send back two final approval documents. 5. City staff signs and retains one copy and sends back one original signed copy. I have included an example of a summary publication for your reference. I am available to answer any questions that you may have, speak to council members, or your city attorney. Please feel free to contact me directly at any time. I look forward to working with you and your staff to renew this important agreement. Sincerely, Kyle E. Meyer CenterPoint Energy 9320 Evergreen Blvd NW, Suite B Coon Rapids, MN 55433 763-785-5426 kyle.meyer@centerpointenergy.com 50 CenterPoint Energy Gas Franchise Ordinance ORDINANCE NO. CITY OF CENTERVILLE,ANOKA COUNTY,MINNESOTA AN ORDINANCE GRANTING CENTERPOINT ENERGY RESOURCES CORP.,d/b/a CENTERPOINT ENERGY MINNESOTA GAS("CENTERPOINT ENERGY"),ITS SUCCESSORS AND ASSIGNS,A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE,REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION,DISTRIBUTION,MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIVATE USE AND TO USE THE PUBLIC WAYS AND GROUNDS OF THE CITY OF CENTERVILE,ANOKA COUNTY,MINNESOTA, FOR SUCH PURPOSE; AND,PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF THE CITY COUNCIL OF THE CITY OF CENTERVILLE, ANOKA COUNTY, MINNESOTA,ORDAINS: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Centerville, County of Anoka, State of Minnesota. City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals,but excluding facilities for providing heating,lighting, or other forms of energy. Commission. The Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government, which preempts all or part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission. Company. CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas ("CenterPoint Energy") its successors and assigns including all successors or assigns that own or operate any part or parts of the Gas Facilities subject to this Franchise. Gas Energy. Gas Energy includes both retail and wholesale natural, manufactured or mixed gas. Gas Facilities. Gas transmission and distribution pipes, lines, ducts, fixtures, and all necessary equipment and appurtenances owned or operated by the Company for the purpose of providing Gas Energy for retail or wholesale use. Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 11Page 51 Notice. A writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to CenterPoint Energy, Minnesota Division Vice President, 505 Nicollet Mall, Minneapolis, Minnesota 55402. Notice to the City shall be mailed to 1880 Main Street, Centerville, MN 55038. Any party may change its respective address for the purpose of this Ordinance by written Notice to the other parties. Ordinance. This gas franchise ordinance,also referred to as the Franchise. Public Way. Any highway, street,alley or other public right-of-way within the City. Public Ground. Land owned or otherwise controlled by the City for utility easements, park, trail, walkway, open space or other public property, which is held for use in common by the public or for public benefit. SECTION 2. ADOPTION OF FRANCHISE. 2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from the date this Ordinance is passed and approved by the City, the right to import, manufacture, distribute and sell Gas Energy for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future and also the right to transport Gas Energy through the limits of the City for use outside of the City limits. For these purposes, Company may construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to such reasonable regulations as may be imposed by the City pursuant to a public right-of-way ordinance or permit requirements adopted consistent with state law. 2.2 Effective Date; Written Acceptance. This Franchise shall be in force and effect from and after the passage of this Ordinance and publication as required by law and its acceptance by Company. If Company does not file a written acceptance with the City within 60 days after the date the City Council adopts this Ordinance, or otherwise inform the City, at any time, that the Company does not accept this Franchise,the City Council by resolution shall revoke this Franchise. 2.3. Service and Gas Rates. The terms and conditions of service and the rates to be charged by Company for Gas Energy in City are subject to the exclusive jurisdiction of the Commission. 2.4. Publication Expense. Company shall pay the expense of publication of this Ordinance. 2.5. Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written Notice, the parties may jointly select a mediator to Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 2 1 P a g e 52 facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this Franchise or for such other relief as may be permitted by law or equity. 2.6. Continuation of Franchise. If the City and the Company are unable to agree on the terms of a new franchise by the time this Franchise expires,this Franchise will remain in effect until a new franchise is agreed upon, or until 90 days after the City or the Company serves written Notice to the other party of its intention to allow Franchise to expire. However, in no event shall this Franchise continue for more than one year after expiration of the 20-year term set forth in Section 2.1. SECTION 3. LOCATION,OTHER REGULATIONS. 3.1. Location of Facilities. Gas Facilities shall be located, constructed, and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt normal operation of any City Utility System. Gas Facilities may be located on Public Grounds in a location selected by the City. The location and relocation of Gas Facilities shall be subject to reasonable regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this Franchise. 3.2. Street Opening-s. Company shall not open or disturb the surface of any Public Way or Public Ground for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee, unless the City is receiving a franchise fee pursuant to this Ordinance, in which case all permit fees will be waived. Permit conditions imposed on Company shall not be more burdensome than those imposed on other public-right-of-way users for similar facilities or work. Company may, however, open and disturb the surface of any Public Way or Public Ground without a permit if (i) an emergency exists requiring the immediate repair of Gas Facilities and (ii) Company gives telephone, email or similar Notice to the City before commencement of the emergency repair, if reasonably possible. Within two business days after commencing the repair, Company shall apply for any required permits and pay any required fees. 3.3. Restoration. After undertaking any work requiring the opening of any Public Way or Public Ground,the Company shall restore the Public Ways or Public Grounds in accordance with Minnesota Rules, 7819.1100. Company shall restore the Public Ground to as good a condition as formerly existed, and shall maintain the surface in good condition for six months thereafter. All work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work,remove all dirt,rubbish,equipment and material, and put the Public Ground in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand,but not to exceed five days, the right to make the restoration of the Public Ways or Public Grounds at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City. The Company shall not be required to post a construction performance bond. Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 3 1 P a g e 53 3.4. Avoid Damage to Gas Facilities. The Company must take reasonable measures to prevent the Gas Facilities from causing damage to persons or property. The Company must take reasonable measures to protect the Gas Facilities from damage that could be inflicted on the Gas Facilities by persons,property, or the elements. Per Minnesota Statute 216D.05, the City must take protective measures when it performs work near the Gas Facilities. 3.5. Notice of Improvements to Streets. The City will give Company reasonable written Notice of plans for improvements to Public Ways and Public Grounds where the City has reason to believe that Gas Facilities may affect or be affected by the improvement. The Notice will contain: (i) the nature and character of the improvements, (ii) the Public Ways or Public Grounds upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way or Public Grounds is involved, the order in which the work is to proceed. The Notice will be given to Company a sufficient length of time, considering seasonal working conditions, in advance of the actual commencement of the work to permit Company to make any additions, alterations or repairs to its Gas Facilities the Company deems necessary. 3.6 Mapping Information. If requested by City, the Company must promptly provide complete and accurate mapping information for any of its Gas Facilities in accordance with the requirements of Minnesota Rules 7819.4000 and 7819.4100. 3.7. Emergency Response. As emergency first-responders, when a public safety concern exists both the City and Company shall respond to gas emergencies within the City without additional direct fee or expense to either City or Company. SECTION 4. RELOCATIONS. 4.1. Relocation in Public Ways and Public Grounds. The Company and City shall comply with the provisions of Minnesota Rules 7819.3100, with respect to requests for the Company to relocate Gas Facilities located in either Public Ways or Public Grounds. 4.2. Proiects with Federal Funding. Relocation, removal, or rearrangement of any Company Gas Facilities made necessary because of the extension into or through City of a federally aided highway project shall be governed by the provisions of Minnesota Statutes Sections 161.45 and 161.46. SECTION 5. INDEMNIFICATION. 5.1. Indemnity of City. Company shall indemnify and hold the City harmless from any and all liability, on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of pennits, or the operation of the Gas Facilities located in the Public Ways and Public Grounds. The City shall not be indemnified for losses or claims occasioned through its own negligence or otherwise wrongful act or omission except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for,or inspection of, Company's plans or work. Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 4 1 P a g e 54 5.2. Defense of City. In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written Notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such Notice. If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City. The Company, in defending any action on behalf of the City, shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. This Franchise agreement shall not be interpreted to constitute a waiver by the City of any of its defenses of immunity or limitations on liability under Minnesota Statutes,Chapter 466. SECTION 6. VACATION OF PUBLIC WAYS AND PUBLIC GROUNDS. The City shall give Company at least two weeks prior written Notice of a proposed vacation of a Public Ways or Public Grounds. The City and the Company shall comply with Minnesota Rules 7819.3100 and Minnesota Rules 7819.3200 with respect to any request for vacation. SECTION 7. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance. SECTION 8. FRANCHISE FEE. 8.1. Form. During the term of the franchise hereby granted, the City may charge the Company a franchise fee. The Company will administer the collection and payment of franchise fees to City in lieu of permit fees or other fees that may otherwise be imposed on the Company in relation to its operations as a public utility in the City. The franchise fee will be collected on a flat per meter basis, or by some other method that is mutually acceptable to both City and Company for each retail customer within the corporate limits of the City. The amount of the fee collected may differ for each customer class. The City will use a formula that provides a stable and predictable amount of fees, without placing the Company at a competitive disadvantage. Such fee shall not exceed any amount that the Company may legally charge to its customers prior to payment to the City and be consistent with the Minnesota Public Utility Commission's March 23, 2011 Order establishing franchise fee filing requirements in Docket No. E,G999/CI-09-970. If the Company claims that the City required fee formula is discriminatory or otherwise places the Company at a competitive disadvantage, the Company will provide a formula that will produce a substantially similar fee amount to the City. If the City and Company are unable to agree,the disagreement shall be subject to the Dispute Resolution provisions of this Ordinance. 8.2. Separate Ordinance. The franchise fee shall be imposed by separate ordinance duly adopted by the City Council. The effective date of the franchise fee ordinance shall be no less than ninety (90) days after written Notice enclosing a copy of the duly adopted and approved ordinance has been served upon the Company by Certified mail. The Company is not required to Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 5 1 P a g e 55 collect a franchise fee if the terms of the fee agreement are inconsistent with this franchise or state law,provided the Company notifies the City Council of the same within the ninety(90)day period. 8.3. Condition of Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes a fee of the same or substantially similar amount on the sale of energy within the City by any other energy supplier, provided that, as to such supplier, the City has the authority or contractual right to require a franchise fee or similar fee through an agreed-upon franchise. 8.4. Collection of Fee. The franchise fee shall be payable not less than quarterly during complete billing months of the period for which payment is to be made. The franchise fee formula may be changed from time to time, however,the change shall meet the same Notice and acceptance requirements and the fee may not be changed more often than annually. Such fee shall not exceed any amount that the Company may legally charge to its customers prior to payment to the City and be consistent with Minnesota Public Utility Commission's March 23, 2011 Order establishing franchise fee filing requirements in Docket No. E,G999/CI-09-970. Such fee is subject to subsequent reductions to account for uncollectibles and customer refunds incurred by the Company. The Company shall not be responsible to pay City fees that Company is unable to collect under Commission rules or order. The Company agrees to make available for inspection by the City at reasonable times all records necessary to audit the Company's determination of the franchise fee payments. 8.5. Continuation of Franchise Fee. If this franchise expires and the City and the Company are unable to agree upon terms of a new franchise,the franchise fee,if any being imposed by the City at the time this franchise expires, will remain in effect until a new franchise is agreed upon. However,the franchise fee will not remain in effect for more than one year after the franchise expires as stated in Section 2.6 of this Franchise. If for any reason the franchise terminates, the franchise fee will terminate at the same time. SECTION 9. ABANDONED FACILITIES. The Company shall comply with Minnesota Statutes, Section 216D.01 et sea. as it may be amended from time to time with respect to abandoned facilities located in Public Ways and Public Grounds and with Minnesota Rules, Part 7819.3300 as it may be amended from time to time with respect to abandoned facilities in Public Ways. The Company shall maintain records describing the exact location of all abandoned and retired Gas Facilities within the Public Ways and Public Grounds, produce such records at the City's request and comply with the location requirements of Minnesota Statutes, Section 216D.04 with respect to all Gas Facilities located in Public Ways and Public Grounds. SECTION 10. PROVISIONS OF ORDINANCE. 10.1. Severability. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 6 1 P a g e 56 other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. 10.2. Limitation on Applicability. This Ordinance constitutes a franchise agreement between the City and Company as the only parties. No provisions herein shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of this Ordinance or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. SECTION 11. AMENDMENT-PROCEDURE. Either party may propose at any time that this Franchise Ordinance be amended. Franchise Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment,which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Clerk within 90 days after the effective date of the amendatory ordinance. If the Company does not consent to the amendment, the ordinance containing the amendment shall be revoked by City. Passed and approved: Tom Wilharber Mayor of the City of Centerville, Minnesota Attest: City Clerk, Centerville,Minnesota Franchise Ordinance for Centerville—CenterPoint Energy version 12152015 7 1 P a g e 57 ORDINANCE NO. 15- AN ORDINANCE IMPLEMENTING A GAS ENERGY FRANCHISE FEE ON CENTERPOINT ENERGY MINNESOTA GAS ("CENTERPOINT ENERGY") FOR PROVIDING GAS ENERGY SERVICE WITHIN THE CITY OF CENTERVILLE, MINNESOTA THE CITY OF CENTERVILLE DOES ORDAIN: Gas Franchise Fee (a) Definitions. For the purposes of this Ordinance, the following terms shall have the following meanings: (1) City. The City of Centerville, County of Anoka, State of Minnesota. (2) Company. CenterPoint Energy Minnesota Gas ("CenterPoint Energy"), its successors and assigns. (3) Franchise Agreement. The franchise agreement between the City and Company pursuant to City Ordinance 15-; (4) Notice. "Notice" means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to CenterPoint Energy, Minnesota Division Vice President, 505 Nicollet mall, Minneapolis, MN 55402. Notice to City shall be mailed to the City Clerk at 1880 Main Street, Centerville,Minnesota 55038. (b) Purpose. The Centerville City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City. Pursuant to the Franchise Agreement the City has the right to impose a franchise fee on Company. (c) Franchise Fee Statement and Schedule. A franchise fee is hereby imposed on Company commencing with the 2016 billing month, and in accordance with the following fee schedule: Franchise Fee Ordinance for Centerville-CenterPoint Energy version 12152015 58 Customer Classification Amount per Account per Month($) Residential per month Firm A per month Firm B per month Firm C per month Small Volume, Dual Fuel A ("SVDF A") $ per month Small Volume, Dual Fuel B ("SVDF B") per month Large Volume, Dual Fuel ("LVDF") per month (d) Account Fee. This fee is an account based fee and not a meter-based fee. In the event that an entity covered by this ordinance has more than one meter, but only one account, only one fee shall be assessed to that account. In the event any entities covered by this ordinance have more than one account, each account shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any account, the highest possible fee amount shall apply. (e) Payment. Franchise fees are to be collected by the Company, consistent with the Minnesota Public Utility Commission's March 23, 2011 Order establishing franchise fee filing requirements in Docket No. E,G999/CI-09-970, and submitted to the City as follows: January—March collections due by April 30. April—June collections due by July 31. July— September collections due by October 31. October—December collections due by January 31. (f) Record Support for Payment. The Company shall make each payment when due and, if requested by the City, shall provide a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total made to account for any non-collectible accounts, refunds or error corrections. The Company shall permit the City, and its representatives, access to the Company's records for the purpose of verifying such statements. (g) Payment Adjustments. Payment to the City will be adjusted where the Company is unable to collect the franchise fee. This includes non-collectible accounts (h) Surcharge. The City recognizes that the Minnesota Public Utilities Commission may allow the Company to add a surcharge to customer rates of city residents to reimburse the Company for the cost of the fee, consistent with the Minnesota Public Utility Commission's March 23, 2011 Order establishing franchise fee filing requirements in Docket No. E,G999/CI-09-970. (i) Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is Franchise Fee Ordinance for Centerville-CenterPoint Energy version 12152015 59 not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this ordinance or for such other relief permitted by law. 0) Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days or more after sending written notice enclosing a copy of this adopted Ordinance to Company by certified mail. Collection of the fee shall commence as provided above. (k) Relation to Franchise Agreement. This ordinance is enacted in compliance with the Franchise Agreement and shall be interpreted as such. (1) Periodic Review. The City Council shall review this ordinance every two years in whatever manner the City Manager then determines to be appropriate,including,but not limited to,review by the City Council in either a work session or a regular session. Failure to review this ordinance shall not in any way invalidate or limit it. (m) Peiqnit Fees. The Company will administer-the eolleetion and payment of ffanehise fees to City in lieu of pefmit fees, or- other-fees that may other-wise be imposed on the Company in r-elation to its operations as a publie utility in the City se4eng as the following r-equir-ements are (1) The Company applies fof any and all pefmits, heenses and similar-doeumentation as thott (2) The Gompan�,r-e"ests the fee to be waived at the tifne of application. Section 2: Effective Date. This ordinance takes effect as provided herein. PASSED AND ADOPTED BY THE CITY COUNCIL THIS DAY OF 52016. Tom Wilharber, Mayor ATTEST: City Clerk (Published in the the day of Franchise Fee Ordinance for Centerville-CenterPoint Energy version 12152015 60 MetroNorth r i 1 1 Relctionships, Building (amminity An Open Letter to the City of Centerville December 2015 We understand that you are currently reviewing the issue of franchise fees. The MetroNorth Chamber Board of Directors wishes to inform you of our long-standing position regarding franchise fees. Franchise fees negatively impact job growth and business expansion among high energy users; namely, large commercial and industrial companies. These businesses pay respectable wages and benefits in the communities where they reside and are the engine of the American economy. Without growth and expansion, this in turn can hurt the city from economic development consideration. Also, these fees are not a transparent cost of government, being forced to be collected by the respective utility company who in turn must reimburse the city. Many residents and businesses are in the dark as to who is collecting this tax and for what purpose it is used. We thank you for your time and for taking our position into consideration. 61 '