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HomeMy WebLinkAboutOrd 2004-2987 ORDINANCE NO. 2987 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA GRANTING TO SAN DIEGO GAS AND ELECTRIC COMPANY (SDG&E), ITS SUCCESSORS AND ASSIGNS, THE FRANCHISE TO CONSTRUCT, MAINTAIN AND USE POLES, WIRES, CONDUITS AND APPURTENANCES, INCLUDING COMMUNICATION CIRCUITS, NECESSARY OR PROPER FOR TRANSMITTING AND DISTRIBUTING ELECTRICITY TO THE PUBLIC FOR ANY AND ALL PURPOSES IN, ALONG, ACROSS, UPON, UNDER AND OVER THE PUBLIC STREETS AND PLACES WITHIN THE CITY OF CHULA VISTA WHEREAS, in 1998, in accordance with Article XII of the City Charter, City granted an electric franchise ("Original Franchise") to San Diego Gas & Electric Company ("SDG&E" or "Grantee") pursuant to Ordinance No. 2746; and WHEREAS, the original franchise has expired and City staff and SDG&E representatives have negotiated the terms for a new franchise ("New Franchise"); and WHEREAS, on October 26, 2004, pursuant to City Council Resolution No. 2004-342, the City approved a resolution of intention to consider the adoption of the New Franchise and set a public hearing for such purpose on November 9, 2004 at 6:00 p.m.; and WHEREAS, on November 9,2004, a duly noticed public hearing was held on the New Franchise, and all public testimony was reviewed and considered by the City Council, including the City Manager's recommendation to approve the New Franchise, and the City Council approved the placement of this ordinance approving the New Franchise on first reading; and WHEREAS, on November 16,2004, the City Council considered the New Franchise for second reading and adoption. NOW, THEREFORE, the City Council of the City of Chula Vista does hereby ordain as follows: A. PROTESTS OVERRULED. Any and all protests or objections presented to the granting of the New Franchise are hereby overruled. B. TERMS AND CONDITIONS OF NEW FRANCHISE. SECTION 1. DEFINITIONS. Whenever in this ordinance the words or phrases hereinafter in this section defined are used, they shall have the respective meaning assigned to them in the following definitions (unless, in the given instance, the context wherein they are used shall clearly import a different meaning). Ordinance 2987 Page 2 (a) The word "Grantee" shall mean San Diego Gas & Electric Company, and its lawful successors or assigns. (b) The word "City" shall mean the City ofChula Vista, a municipal corporation of the State of California, in its present incorporated form or as a chartered City, in any later reorganized, consolidated, enlarged or reincorporated form. (c) The word "streets" shall mean the public streets, ways, alleys and places as the same now or may hereafter exist within said City, including state highways, now or hereafter established within said City, and freeways hereafter established within said City. (d) The phrase "poles, wires, conduits and appurtenances" shall mean poles, towers, supports, wires, conductors, cables, guys, stubs, platforms, crossarms, braces, transformers, insulators, conduits, ducts, vaults, manholes, meters, cut-outs, switches, communication circuits, appliances, attachments, appurtenances and any other property located or to be located in, upon, along, across, under or over the streets of the City, and used or useful in the transmission and/or distribution of electricity. (e) The phrase "construct, maintain, and use" shall mean to construct, erect, install, lay, operate, maintain, use, repair, or replace. (f) The phrase "gross receipts" shall mean all gross operating revenues received by Grantee from the sale of electricity to Grantee's customers with points of service within the corporate limits of the City (including, but not limited to, sales to military reservations with points of service within the City's corporate limits) which are credited in Account Nos. 440, 442, 444, 445 and 446 of the current Uniform System of Accounts of the Federal Power Commission as adopted by the California Public Utilities Commission ("CPUC") or similar superseding accounts less uncollectible amounts and less any refunds or rebates made by Grantee to such customers pursuant to orders or decisions of the California Public Utilities Commission. (g) The phrase "Utility Users' Tax" shall mean the local taxes added to utility bills of residential and commercial utility customers as defined in Chula Vista Municipal Code, Chapter 3.44 entitled "Utility Users' Tax". SECTION 2. GRANT OF FRANCHISE. The franchise to construct, maintain and use poles, wires, conduits and appurtenances, including communication circuits, necessary or proper for transmitting and distributing electricity to the public for any and all purposes in, along, across, upon, under, and over the public streets, ways and places within said City is hereby granted to San Diego Gas & Electric Company, its successors and assigns. The City will not participate in the provision of any such electric transmission or distribution services by itself, or by others within its jurisdictional boundaries for the term of this franchise however, excluding the sale of electric commodity to consumers, or power generation as may be permitted by law and as may be provided in Section I.8.A and I.14.A of the Memorandum of Understanding between the City and SDG&E approved by Resolution No. 2004-333 ("MOU"). "Distribution Services" shall mean the ownership and or operation by the City itself, or with or by any third party, of any facilities, including pipes, wires, and electric utility plant and related services for the transmission or distribution delivery of Ordinance 2987 Page 3 electricity to consumers within the boundaries of the City. This franchise is granted upon each and every condition herein contained, and shall ever be strictly construed. Nothing shall pass by the franchise granted hereby to Grantee unless it be granted in plain and unambiguous terms. Each of said conditions is a material and essential condition to the granting of said franchise. SECTION 3. TERM. Said franchise shall commence on January 1, 2005 and shall have a primary term of ten (10) years and shall be automatically extended for a new term for an additional twenty (20) year period upon Grantee's material satisfaction of all of the obligations of the MOU. Throughout such term said franchise shall endure in full force and effect until the same shall, with the consent of the Public Utilities Commission of the State of California, be voluntarily surrendered or abandoned by the Grantee, or until the state or some municipal or public corporation thereunto duly authorized by law shall purchase by voluntary agreement or shall condemn and take under the power of eminent domain, all property actually used and useful in the exercise of said franchise and situate in the territorial limits of the state, municipal, or public corporation purchasing or condemning such property, or until said franchise shall be forfeited for non-compliance with its terms by the Grantee. SECTION 4. CONSIDERATION. (a) Franchise Fees. The Grantee of said franchise shall, during the term thereof, pay to the City one and twenty-five hundredths per cent (1.25%) of the gross annual receipts of said Grantee within the corporate limits of the City. In the event that during the term of this franchise the statutory electric franchise fee paid to general law cities in California is increased to be more than the 1.25% of gross annual receipts as defined herein, the fee to City shall be adjusted to equal such new fee. This adjustment to the fee will become effective as of the date Grantee is authorized by the California Public Utilities Commission (CPUC) to collect such increased amount to the City in its rates. In the event City does not meet its obligations pursuant to Section 2 hereof this franchise fee will be reduced to that paid to California general law cities. (b) Utility User's Tax-Collection Services. To the extent permitted by law, and solely for those customers within the corporate limits of the City billed directly by Grantee (including customers purchasing power from other electricity providers), Grantee agrees to collect the City's Utility Users' Tax and remit same to the City on a monthly basis. No additions or deletions to the parties subject to this tax shall be made absent the mutual agreement of the parties. (c) California Municipal Public Lands Use Charge. Grantee shall implement the provisions of California Public Utilities Code Sections 6351, 6352, 6353, 6354 and 6354.1 applicable to a customer who receives electric transmission or distribution service subject to this franchise, and remit such funds collected to the City. SECTION 5. REPORTS, DATES OF PAYMENT AND CITY AUDITS. (a) The Grantee shall file with the Director of Finance of said City, within three months after the expiration of the calendar year, or fractional calendar year, following the date of the granting hereof, and within three months after the expiration of each and every calendar year thereafter, a duly verified statement Ordinance 2987 Page 4 showing in detail the total gross receipts of such Grantee during the preceding calendar year, or such fractional calendar year, from the sale of electricity within said City. (b) Such Grantee shall pay to said City by no later than the end of August of the following calendar year, an amount equal to said franchise fee for the first six months of each year ("Initial Payment"). The Initial Payment shall be calculated using Grantee's actual gross receipts from January I through June 30 of each year. Grantee shall pay to City by no later than the end of March of the following calendar year a true-up payment in an amount which, when added to the Initial Payment above, constitutes the City's annual franchise fee for the preceding calendar year. (c) California Municipal Public Lands Use Charges collected by Grantee pursuant to Section 4( c) shall also be paid in accordance with this schedule. (d) Any neglect, omission, or refusal by said Grantee to file such verified statement, or to pay said percentage at the time and in the manner specified, shall be grounds for the declaration of a forfeiture of this franchise and all rights of Grantee hereunder. SECTION 6. COMPLIANCE WITH LAWS. (a) In General. All facilities or equipment of Grantee that Grantee shall construct, maintain and use or remove, pursuant to the provisions of the franchise granted herein shall be accomplished in accordance with the ordinances, rules and regulations of City now or as hereafter adopted consistent with such rules and regulations as are promulgated under state law, or orders of the California Public Utilities Commission or other governmental authority having jurisdiction. SECTION 7. ADMINISTRATIVE PRACTICES. (a) Installation, Maintenance, Repair and Removal of Facilities. Grantee and City shall cooperate in preparing a manual of administrative practices which shall govern the permitting, installation, maintenance, repair and removal of Grantee's facilities in the streets of City which shall include, but not be limited to, cathodic protection and street repair standards practices. Once each year, commencing with the first full calendar year of the franchise granted herein, it is to be the joint responsibility of Grantee and City to review and update such administrative practices. Both Grantee and City are charged with the duty to prepare, review, and update such administrative practices by a method of mutual cooperation which shall take into consideration reasonable needs and convenience of each party in order to streamline permitting by e.g. development of master permits and to minimize costs. Following the preparation of said manual, and its approval by the City Council, it shall govern the practices of City and the Grantee in issuance of permits and installation, maintenance and removal of Grantee's facilities in the streets of City. (b) System Upgrades. Grantee agrees to include the City in the early implementation of system-wide enhancements (e.g. infrastructure upgrades and ancillary services) to the extent such inclusion is consistent with Grantee's then Ordinance 2987 Page 5 policy to pnontlze and construct such system enhancements based on the condition of existing infrastructure in Grantee's service territory. SECTION 8. CITY RESERVED POWERS. (a) Consistent with the terms of Section 2 herein City reserves the right for itself to lay, construct, erect, install, use, operate, repair, replace, remove, relocate, regrade or maintain below surface or above surface improvements of any type or description in, upon, along, across, under or over the streets of the City. City further reserves the right to relocate, remove, vacate, or replace the streets themselves. If the necessary exercise of the aforementioned reserve rights conflicts with any poles, wires, conduits, and appurtenances of Grantee constructed, maintained, and used pursuant to the provisions of the franchise granted hereby, whether previously constructed, maintained and used or not, Grantee shall, without cost or expense to City within ninety (90) days after written notice from the City Manager, or his designated representative, and request so to do, begin the physical field construction of changing the location of all facilities or equipment so conflicting. Grantee shall proceed promptly to complete such required work. (b) Notwithstanding anything else in this ordinance to the contrary, the City's right to be an electricity generator retailer, to the extent permitted by law, shall not be limited in any manner by the granting of this franchise. SECTION 9. UNDERGROUNDING OF FACILITIES. (a) Presently Grantee is engaged in a program of converting to underground certain of its facilities in accordance with Decision No. 73078 of the California Public Utilities Commission. At this time, such decision requires Grantee to budget prior to the end of each calendar year certain sums of money for said program for the next succeeding year and allocate these sums to undergrounding projects in the various governmental jurisdictions throughout Grantee's entire electric service territory on the basis of the number of electric customers in each governmental jurisdiction. (b) Grantee acknowledges and agrees as follows: (I) as of October 1, 2004 the City's CPUC Rule 20A Fund allocation balance is approximately $5 million. In addition to its obligation to spend existing balances of CPUC Rule 20A Funds, as provided above, during the term of this franchise, Grantee agrees to allocate two million dollars per year of CPUC Rule 20A funds to the City. The parties have agreed upon specific terms for the allocations of and construction of projects related to such 20A funds set forth in the MOU. Grantee shall not reallocate such monies for any other purpose except with the agreement of the City unless pursuant to CPUC directive. City and Grantee shall meet and confer in the event a proceeding is instituted at the CPUC related to Rule 20A funds to ensure the intent of this provision is realized. (c) The City must create the undergrounding districts in a timely manner to give all participants sufficient time to design and build. Changes in the order of project development must be mutually agreed upon at least 12 months in advance. The City must take an active role in requiring customers to complete their work and to involve telephone and cable companies in the projects. If right-of-way Ordinance 2987 Page 6 becomes an issue with any project, Grantee may seek help from the City to resolve the issues. (d) Grantee agrees to apply for approval of budgeted expenditures ofCPUC Rule 20A funds to the extent mandated by the CPUC each year as necessary to implement its obligations under this Section and the MOU. Grantee is responsible for its own actions and those things within its control. Grantee will not be held liable for nonperformance by telephone system operators, water companies, or other communications or cable system operators, City or customers. (e) Except as provided in the MOU, nothing contained herein is intended to prevent Grantee from informing City and the California Public Utilities Commission of then existing or foreseeable economic conditions or other factors which in the opinion of Grantee make unwise the granting in whole or in part, of the particular annual application. (f) This section is intended only to be a portion of the consideration to be paid by Grantee to City for the rights and privileges granted herein and therefore it does not create or confer any rights or obligations to anyone other than City or Grantee. SECTION 10. DUTIES AND LIABILITIES. (a) Suit for forfeiture of franchise. The City may sue in its own name for the forfeiture of this franchise, in the event of noncompliance with any of the material conditions thereof by the Grantee, its successors, or assigns. (b) Indemnity. The Grantee shall indemnify and hold harmless the City and its officers from all liability for damages proximately resulting from any operations under the franchise. (c) Notification of City of sale or transfer of franchise. The Grantee shall file with the legislative body of the City within thirty (30) days after any sale, transfer, assignment, or lease of the franchise or any part thereof, or any of the rights or privileges granted thereby, written evidence of the transaction certified to by the Grantee or its duly authorized officers. SECTION 11. REPAIR COSTS. Grantee shall pay to City on demand the cost of all repairs to City property made necessary by any of the operations of Grantee under the franchise granted hereby, provided, however, that Grantee may make repairs to streets, sidewalks, curbs and gutters itself at its own cost in accordance with City and Grantee's previously agreed specifications if the same can be done without undue inconvenience to the public use of the streets. SECTION 12. FORFEITURE AND OTHER REMEDIES. If Grantee shall fail, neglect or refuse to comply with any of the conditions of the franchise granted hereby, and if such failure, neglect or refusal shall continue for more than thirty (30) days after written demand by the City Manager for compliance therewith, then City, by the City Council, in addition to all rights and remedies allowed by law, thereupon may -.,----- -_. - Ordinance 2987 Page 7 terminate the rights, privilege, and franchise granted in and by this ordinance, and all the rights, privileges and the franchise of Grantee granted hereby shall thereupon be at an end. Thereupon and immediately, Grantee shall surrender all rights and privileges in and to the franchise granted hereby. No provision herein made for the purpose of securing the enforcement of the terms and conditions of the franchise granted hereby shall be deemed an exclusive remedy or to afford the exclusive procedure for the enforcement of said terms and conditions, but the remedies and procedure outlined herein or provided, including forfeiture, shall be deemed to be cumulative. SECTION 13. ACQUISITION AND VALUATION. Nothing in this ordinance or in the franchise granted hereby shall be construed as in any way impairing City's rights to acquire property of Grantee through the exercise of City's power of eminent domain, or through voluntary agreement between City and Grantee, except as provided in the MOU. In the event that City chooses to exercise its power of eminent domain, it shall do so in accordance with the procedures provided by the general law of the State of California for the condemnation of public utility property. The valuation of such property for condemnation purposes shall be made in accordance with such general law. SECTION 14. AUTHORITY FOR GRANT. Notwithstanding any other provision herein contained, this franchise is granted solely and exclusively under Section 1200, 1201, 1202, 1203, 1204, 1205 and 1206 of Article XII of the Charter of the City of Chula Vista. This franchise is granted subject to any and all additional terms and conditions contained herein. SECTION 15. EFFECTIVE DATE. Subject to the requirements of Section 17, this ordinance shall become effective thirty days after its final passage. Upon the effectiveness of this ordinance, the commencement of the term shall be January 1,2005 as provided in Section 3. SECTION 16. PUBLICATION COSTS. The Grantee of said franchise shall pay to the City a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the granting thereof; such payment to be made within thirty (30) days after the City shall have furnished such Grantee with a written statement of such expenses. SECTION 17. WRITTEN ACCEPTANCE. The franchise granted hereby shall not become effective until written acceptance thereof, in a form approved by the City Attorney, shall have been filed by the Grantee with the City Clerk. SECTION 18. PUBLICATION. The City Clerk shall cause this ordinance to be published once within fifteen (15) days after its passage in the Chula Vista Star News, a newspaper of general circulation published and circulated in said City. SECTION 19. MISCELLANEOUS OBLIGATIONS. Ordinance 2987 Page 8 (a) Notice of Significant Transactions. Grantee agrees to provide as much reasonable advance notice as is legally permissible to the City regarding any mergers, buyouts, spin-offs or other transactions materially affecting the nature of the entity to which the City grants this franchise. Such notice shall be consistent with Grantee's obligations under the law relating to disclosures and the limitations placed upon Grantee. GRANTEE'S ACCEPTANCE: By its signature hereto, Grantee accepts the franchise granted hereby and agrees to be bound and abide by all covenants, terms and conditions contained herein. Grantee warrants and represents that it is authorized to enter into this franchise agreement and that the party executing this franchise on its behalf is duly authorized to do so, without the need for any further action. ACKNOWLEDGED AND AGREED: San Diego Gas & Electric Company ~;'I~;~~Mh~ ~cPJefh~~ . Presented by Approved as to form by Director of Conservation and Environmental Services ~+~ Ann oore . y Attorney \?~~,fl)t(Ù~ Ordinance 2987 Page 9 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 16th day of November, 2004, by the following vote: AYES: Councilmembers: Davis, McCann, Rindone, Salas and Padilla NAYS: Councilmembers: None ABSENT: Councilmembers: None ¡} /I 'V~ ~illa, Mayor ATTEST: , ~~w~ffi;¿~ ~ STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA) I, Susan Bigelow, City Clerk of Chu1a Vista, California, do hereby certify that the foregoing Ordinance No. 2987 had its first reading at a regular meeting held on the 9th day of November, 2004 and its second reading and adoption at a regular meeting of said City Council held on the 16th day of November, 2004. Executed this 16th day of November, 2004. :: --;i..LL~ ~ ~q:J 10 . Susan Bigelow, MMC, City Clerk