010-14 - Ordinance - Franchise Agreement with Cascade Natural GasIntroduced by: City Attorney
Reviewed by: City Attorney
Introduced: May 13, 2014
Adopted: June 24, 2014
ORDINANCE NO.010-14
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON,
GRANTING CASCADE NATURAL GAS CORPORATION, A
WASHINGTON CORPORATION, ITS SUCCESSORS AND ASSIGNS, THE
RIGHT, PRIVILEGE, AUTHORITY AND FRANCHISE TO SET, ERECT,
LAY, CONSTRUCT, EXTEND, SUPPORT, ATTACH, CONNECT,
MAINTAIN, REPAIR, REPLACE, ENLARGE, OPERATE AND USE
FACILITIES IN, UPON, OVER, UNDER, ALONG, ACROSS AND
THROUGH THE FRANCHISE AREA TO PROVIDE FOR THE
TRANSMISSION, DISTRIBUTION AND SALE OF NATURAL GAS
WHEREAS, Cascade Natural Gas Corporation has historically provided natural gas
services to the City of Port Orchard; and
WHEREAS, the prior franchise agreement between the City and Cascade Natural Gas
Corporation expires in July of 2014; and
WHEREAS, in order to continue uninterrupted natural gas service to the City a new
franchise agreement must be established and this Ordinance will establish said franchise agreement
with Cascade Natural Gas Corporation and will benefit the City; now, therefore,
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. Definitions.
1.1 Where used in this franchise (the "Franchise") the following terms shall mean:
1.1.1 "CNG" means Cascade Natural Gas Corporation, a Washington
corporation, and its successors and assigns.
1.1.2 "City" means the City of PORT ORCHARD, a Municipal Corporation within the
State of Washington, and its successors and assigns.
1.1.3 "Construct" or "Construction" shall mean placing, removing, replacing, adding new,
and repairing Facilities and may include, but is not limited to, digging and/or excavating
for the purposes of placing, removing, replacing, adding new, and repairing Facilities.
1.1.4 "Facilities" means, collectively, any and all (i) natural gas transmission and
distribution systems, including but not limited to, gas pipes, pipelines, mains, laterals,
service lines, conduits, feeders, regulators, meters, meter -reading devices, monitoring
and communication systems; and (ii) any and all other equipment, appliances,
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CITY OF PORT ORCHARD - CNG FRANCHISE
attachments, appurtenances and other items necessary, convenient, or in any way
appertaining to any and all of the foregoing, whether the same be located over or under
ground.
1.1.5 "Franchise" means the grant of rights, privileges, authority, terms, and conditions
embodied in this Ordinance.
1.1.6 "Franchise Area" means any, every and all right-of-way for public roads, streets,
avenues, alleys, highways and other public ways of the City as now laid out, platted,
dedicated or improved; and any, every and all right-of-way for public roads, streets,
avenues, alleys, highways and other public ways that may hereafter be laid out, platted,
dedicated or improved within the present limits of the City and as such limits may be
hereafter extended. For the purpose of this definition, right-of-way includes property
owned by the City in fee and used for public roads and other public ways of the City.
1.1.7 "Maintenance" or "Maintain" means examining, testing, inspecting, repairing,
maintaining, and replacing the Facilities or any part thereof as required or as necessary
for safe operation.
1.1.8 "Operate" or "Operations" means the use of CNG's Facilities for the transmission,
distribution, handling, and sale of product within and through the Franchise Area.
1.1.9 "Ordinance" means Ordinance No. 010-14, which sets forth the terms and conditions
of this Franchise.
1.1.10 "Public right of way improvement" is a City -funded capital improvement to the
public right of way.
Section 2. Facilities Within Franchise Area.
2.1 The City does hereby grant to CNG a Franchise for the period set forth in Section 12 below.
This Franchise grants the right, privilege, and authority to Construct, Operate, and Maintain
Facilities necessary for the purpose of transmission, distribution and sale of natural gas.
Section 3. Noninterference of Facilities.
3.1 CNG's Facilities shall be maintained within the Franchise Area so as not to unreasonably
interfere with the free passage of traffic and in accordance with all applicable federal and state
laws, rules and regulations and all applicable local government laws, rules and regulations.
CNG shall exercise its rights within the Franchise Area in accordance with applicable City
codes and ordinances governing use and occupancy of the Franchise Area; provided, however,
in the event of any conflict or inconsistency of such codes and ordinances with the terms and
conditions of this Franchise, the terms and conditions of this Franchise shall govern and
control; provided, further, nothing herein shall be deemed to waive, prejudice or otherwise
limit any right of appeal afforded CNG by such City codes and ordinances.
3.2 CNG shall provide the City, upon the City's reasonable request, copies of available drawings
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in use by CNG showing the location of its Facilities at specific locations within the Franchise
Area. As to any such drawings so provided, CNG does not warrant the accuracy thereof and, to
the extent the location of Facilities are shown, such Facilities are shown in their approximate
location. With respect to any excavations within the Franchise Area undertaken by or on behalf of
CNG or the City, nothing herein is intended (nor shall be construed) to relieve either party of their
respective obligations arising under applicable law with respect to determining the location of
utility facilities.
Section 4. Relocation of Facilities.
4.1 Whenever the City causes a public right of way improvement to be undertaken within the
Franchise Area, and such public right of way improvement requires the relocation of CNG's
then existing Facilities within the Franchise Area (for purposes other than those described in
paragraph 4.2 below), the City shall:
4.1.1 Provide CNG, within a reasonable time prior to the commencement of such public
right of way improvement, written notice requesting such relocation; and
4.1.2 Provide CNG with reasonable plans and specifications for such public right of
way improvement.
After receipt of such notice and such plans and specifications, CNG shall relocate such Facilities
within the Franchise Area at no charge to the City. The City will makes its best efforts to avoid
the need for such moving or changing whenever possible. If the City requires the subsequent
relocation of any Facilities within five (5) years from the date of relocation of such Facilities
pursuant to Section 4.1, the City shall bear the entire cost of such subsequent relocation. In the
event the city receives any Federal, state or other funds for gas line relocating purposes, the
Grantee will be given credit to the extent any such funds are actually received by the City.
4.2 Whenever (i) any public or private development within the Franchise Area, other than a public
right of way improvement, requires the relocation of CNG's Facilities within the Franchise Area to
accommodate such development; or (ii) the City requires the relocation of CNG's Facilities within
the Franchise Area for the benefit of any person or entity other than the City, then in such event,
CNG shall have the right as a condition of such relocation, to require such developer, person or
entity to make payment to CNG, at a time and upon terms acceptable to CNG, for any and all costs
and expenses incurred by CNG in the relocation of CNG's Facilities.
4.3 Any condition or requirement imposed by the City upon any person or entity, other than
CNG, that requires the relocation of CNG's Facilities shall be a required relocation for purposes
of paragraph 4.2 above (including, without limitation, any condition or requirement imposed
pursuant to any contract or in conjunction with approvals or permits for zoning, land use,
construction or development).
4.4 Nothing in this Section 4 "Relocation of Facilities" shall require CNG to bear any cost or
expense in connection with the location or relocation of any Facilities then existing pursuant to
easement or such other rights not derived from this Franchise.
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Section 5. Indemnification.
5.1 CNG shall indemnify and hold the City harmless from any and all claims and demands made
against it on account of injury or damage to the person or property of another, to the extent such
injury or damage is caused by the negligence of CNG, its agents, servants or employees in
exercising the rights granted to CNG in this Franchise; provided, however, that in the event any
such claim or demand be presented to or filed with the City, the City shall promptly notify CNG
thererof, and CNG shall have the right, at its election and at its sole cost and expense, to settle and
compromise such claim or demand; provided further, that in the event any suit or action is begun
against the City based upon any such claim or demand, the City shall likewise promptly notify
CNG thereof, and CNG shall have the right, at its election and its sole cost and expense to settle
and compromise such suit or action, or defend the same at its sole cost and expense, by attorney
of its own election. This provision shall survive the termination of this Franchise.
This indemnity provision shall not be considered a waiver to any defenses to which the City may
be entitled in such action or suit defended by CNG including any defenses of sovereign
immunity.
Section 6. Insurance
6.1 CNG shall procure and maintain for the duration of this Franchise, insurance against claims for
injuries to persons or damages to property which may arise from or in connection with the exercise
of the rights, privileges and authority granted hereunder to CNG, its agents, representatives or
employees that includes
A. Minimum Scope of Insurance
CNG shall obtain insurance of the types described below:
1. Automobile Liability insurance covering all owned, non -owned, hired and leased
vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01
or a substitute form providing equivalent liability coverage. If necessary, the policy
shall be endorsed to provide contractual liability coverage.
2. Commercial General Liability insurance shall be written on ISO occurrence form CG 00
01 or a substitute form providing equivalent liability coverage and shall cover liability
arising from premises, operations, independent contractors and personal injury and
advertising injury. The City shall be named as an insured under the CNG's Commercial
General Liability insurance policy with respect to the work performed for the City.
3. Workers' Compensation coverage as required by the Industrial Insurance laws of the
State of Washington.-
B. Minimum Amounts of Insurance
CNG shall maintain the following insurance limits:
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1. Automobile Liability insurance with a minimum combined single limit for bodily injury
and property damage of $1,000,000 per accident.
2. Commercial General Liability insurance shall be written with limits no less than
$1,000,000 each occurrence, $2,000,000 general aggregate.
C. Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions for
Automobile Liability and Commercial General Liability insurance:_
CNG's insurance coverage shall be primary insurance as respect the City. Any
insurance, self-insurance, or insurance pool coverage maintained by the City shall be
excess of CNG's insurance and shall not contribute with it.
2. CNG's insurance shall be endorsed to state that coverage shall not be cancelled by
either party, except after thirty (30) days prior written notice by certified mail, return
receipt requested, has been given to the City.
D. Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII.
In lieu of the requirements set forth above, CNG may self -insure against such risks in such amounts
as are consistent with good utility practice. Upon the City's request, CNG shall provide the City with
reasonable written evidence that CNG is maintaining such insurance.
Section 7. Vacation or Disposal of Franchise Area.
7.1 In the event the City vacates or disposes of any portion of the Franchise Area during the
term of this Franchise wherein CNG has located Facilities, the City shall provide, or require that
those seeking vacation provide, CNG prior notice of same to allow CNG to review and comment
on the proposed vacation. If requested by CNG, the City shall, in its vacation or disposal
procedure, reserve an easement for utilities suitable for CNG's Facilities. If CNG's facilities
must be relocated from a vacated public right of way, the petitioner of said vacation will bear the
expense of moving said facilities.
Section 8. Moving Buildings within the Franchise Area.
8.1 If any person or entity obtains permission from the City to use the Franchise Area for the
moving or removal of any building or other object, the City shall, prior to granting such
permission, require such person or entity to arrange with CNG for the temporary or permanent
adjustment of CNG's facilities necessary to accommodate the moving or removal of such
building or other object. Such person or entity shall make such arrangements, upon terms and
conditions acceptable to CNG, not less than thirty (30) days prior to the moving or removal of
such building or other object. In such event, CNG shall, at the sole cost and expense of the
person or entity desiring to move or remove such building or other object, adjust any of its
facilities which may obstruct the moving or removal of such building or object.
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Section 9. Default.
9.1 If CNG willfully violates or fails to comply with any of the provisions of this Franchise, or
through willful misconduct or gross negligence fails to heed or comply with any notice given
CNG by the City under the provisions of this Franchise, then CNG shall, at the election of the
City, forfeit all rights conferred hereunder and this Franchise may be revoked or annulled by the
Council after a hearing held upon notice to CNG.
Section 10. Nonexclusive Franchise.
10.1 This Franchise is not, and shall not be deemed to be, an exclusive Franchise. This
Franchise shall not in any manner prohibit the City from granting other and further franchises
over, upon, and along the Franchise Area that do not interfere with CNG's rights under this
Franchise. This Franchise shall not prohibit or prevent the City from using the Franchise Area or
affect the jurisdiction of the City over the same or any part thereof.
Section 11. Franchise Term.
11.1 This Franchise is hereby granted for a term of ten (10) years from and after the date of the
final acceptance of this Ordinance by CNG, herein referred to as the primary term. This
Franchise will automatically renew for successive periods of five (5) years unless cancelled at the
end of a term by either party by written notice to the other party no less than 180 calendar days
prior to the end of the primary term or the then current successive term.
CNG shall have no rights under this Franchise nor shall CNG be bound by the terms and
conditions of this Franchise unless CNG shall, within sixty (60) days after the effective date of
the Ordinance, file with the City its written acceptance of the Ordinance.
Section 12. Gross Earnings — Excise Tax.
12.1. The right and privileges hereby granted are upon condition that the CNG, its successors or
assigns, shall pay, as compensation and as a consideration for the use of the streets, avenues,
alleys, and public grounds of the City, for the purposes herein designated, the full sum and
amount of two percent (2%) of its gross earnings from the sale of gas in the City, monthly into the
Treasury of the City for the use and benefit of the City. CNG's payment of the compensation
shall be made on or before the last day of each month following the month in which the tax
accrued from the granting of this Franchise. And for the purpose of ascertaining the gross
earnings upon which payment shall be made, as aforesaid, an accurate account of such earnings
shall be kept by CNG, and an abstract and account thereof furnished by it to the City Treasurer of
the City on or before the last day of each month following the month in which the tax accrued, the
truth of which abstract shall be verified by affidavit of CNG. For the purpose of verification of
such statements, the books of CNG shall be at all times opened for the inspection of such officer,
person or persons as may be appointed for that purpose by the City. And for the purpose of
securing to the City, the payment of the aforesaid per centum, the City shall have a lien for the
payment of the said per centum and the same shall be charged against all of the property, estate
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and effects of the said company whatsoever, real, personal or mixed, and may be enforced by the
City by civil action. But nothing contained herein shall be held to impair the rights of the City in
enforcing the terms and conditions of this Franchise. The City reserves the right, upon adequate
notice to CNG, to increase the excise tax CNG pays on its gross earnings from the sale of gas in
the City into the maximum amount allowed by law.
Section 13. Assignment.
13.1 This Franchise may not be assigned or transferred without the written consent of the City. In
the case of transfer or assignment as security by mortgage or other security instrument in whole or
in part to secure indebtedness, such consent shall not be required unless and until the secured party
elects to realize upon the collateral. CNG shall provide prompt written notice to the City of any
such assignment or transfer, and all of the provisions, terms, conditions, and requirements of this
Franchise shall be binding upon successors and assigns as if they were specifically mentioned
wherever CNG is named herein.
Section 14. Acceptance.
14.1 This Franchise is granted upon the express condition that CNG, within (60) days after the
adoption of this Ordinance, shall file with the clerk of the City a written acceptance of the same.
Section 15. Survival.
15.1 All of the provisions, terms, conditions and requirements of Sections 4, Relocation of
Facilities; 5, Indemnification; and 6, Insurance; of this Franchise shall be in addition to any and all
other obligations and liabilities CNG may have to the City at common law, by statute, or by contract,
and shall survive the termination or expiration of this Franchise and any renewals or extensions
thereof.
Section 16. Notice.
16.1 Any notice or information required or permitted to be given to the parties under this Franchise
agreement may be sent to the following addresses unless otherwise specified:
CITY OF PORT ORCHARD
MAYOR
216 PROSPECT STREET
PORT ORCHARD, WA 98366
CASCADE NATURAL GAS CORP.
DIRECTOR, NW REGION
6313 KITSAP WAY
BREMERTON, WA 98312
Section 17. Severability.
17.1 If any section, sentence, clause or phrase of this Ordinance should be held to be invalid or
unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not
affect the validity or constitutionality of any other section, sentence, clause or phrase of this
Ordinance unless such invalidity or unconstitutionality materially alters the rights, privileges, duties,
or obligations hereunder, in which event either party may request renegotiation of those remaining
terms of this Franchise materially affected by such courts' ruling.
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Section 18. Miscellaneous.
18.1 The headings of sections and paragraphs of this Franchise are for convenience of reference
only and are not intended to restrict, affect or be of any weight in the interpretation or
construction of the provisions of such sections or paragraphs.
18.2 This Franchise may be amended only by written instrument, signed by both parties, which
specifically states that it is an amendment to this Franchise and is approved and executed in
accordance with the laws of the State of Washington. Without limiting the generality of the
foregoing, this Franchise (including, without limitation, Section 5 above) shall govern and
supersede and shall not be changed, modified, deleted, added to, supplemented or otherwise
amended by any permit, approval, license, agreement or other document required by or obtained
from the City in conjunction with the exercise (or failure to exercise) by CNG of any and all
rights, benefits, privileges, obligations or duties in and under this Franchise, unless such permit,
approval, license, agreement or other document specifically:
18.2.1 references this Franchise; and
18.2.2 states that it supersedes this Franchise to the extent it contains terms and
conditions that change, modify, delete, add to, supplement or otherwise amend the terms and
conditions of this Franchise.
In the event of any conflict or inconsistency between the provisions of this Franchise and the
provisions of any such permit, approval, license, agreement or other document, the provisions of
this Franchise shall control.
18.3 This Franchise is subject to the provisions of any applicable tariff on file with the
Washington Utilities and Transportation Commission or its successor. In the event of any
conflict or inconsistency between the provisions of this Franchise and such tariff, the provisions
of such tariff shall control.
18.4 This Franchise shall fully supersede and terminate any and all previously executed
Franchise agreements and/or amendments thereto, made between the City and CNG.
Section 19. No Third Party Beneficiary
19.1 Nothing in this Franchise shall be construed to create any rights in or duties to any third party,
nor any liability to or standard of care with reference to any third party, nor confer any right or
remedy upon any person other than the City and CNG. No action may be commenced or
prosecuted against either the City or CNG by any other party claiming beneficiary of this Franchise
and nothing this Franchise shall release or discharge any obligation or liability of any third party to
either the City or CNG.
Section 20. Effective Date.
20.1 This Ordinance, being an exercise of a power specifically delegated to the City legislative
body, is not subject to referendum, and shall take effect (5) days after its publication.
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Section 21. Cost of Publication.
21.1 The cost of the publication of this Ordinance shall be borne by CNG.
Section 22. Attorney's Fees.
22.1 CNG shall reimburse City, within sixty (60) days of adoption of this Ordinance, City's
reasonable attorney's fees incurred in reviewing and negotiating this Franchise.
PASSED by the City Council of the City of Port Orchar�PROVED by the Mayor and attested
by the City Clerk in authentication of such passage this ay of 2014.
ATTEST:
BranBran4 arson, City Clerk
APPROVED AS TO FORM:
Gregory A. Jac b , City A torney
Timothy C. Matthes, Mayor
Sponsored by:
Robert Putaansuu, Councilmember
;APPROVED AS TO FORM:
&RIG MA1z'TuSc-ELLI v,t'. C:rEft,ACT ,c.�Os
Date: (Q 3y &
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CITY OF PORT ORCHARD - CNG FRANCHISE
` cA-SC ^�F-- a RTQf-AL_ ez'Aa c6R.p,
HONORABLE MAYOR AND CITY COUNCIL
CITY OF PORT ORCHARD, WASHINGTON
In the matter of the application of Cascade
Natural Gas Corporation, a Washington
corporation, for a franchise to construct,
operate and maintain facilities in, upon,
over, under, along, across and through the
franchise area of the City of PORT
ORCHARD, Washington
Franchise Ordinance No. 010-14
ACCEPTANCE
WHEREAS, the City Council of the City of PORT ORCHARD, Washington,
has granted a franchise to Cascade Natural Gas Corporation, a Washington
corporation, its successors and assigns, by enacting Ordinance No. 0 10- 14 passed by
the City Council on the 241h day of June, 2014 and
WHEREAS, a copy of said Ordinance granting said franchise was received by
Cascade Natural Gas Corporation on the 3c,•t-1L day of June, 2014, from said City
of PORT ORCHARD, Washington.
NOW, THEREFORE, Cascade Natural Gas Corporation, a Washington
corporation, for itself, its successors and assigns, hereby accepts said Ordinance and
all the terms and conditions thereof, and files this, its written acceptance, with the
City of PORT ORCHARD, Washington.
IN TESTIMONY WHEREOF said Cascade Natural Gas Corporation has
caused this written Acceptance to be executed in its name by its undersigned
Cdganjo� Mare k- thereunto duly authorized on this 366day of Su ae ,
2014.
ATTEST:
CASCADE NATURAL GAS CORP.
Copy received fo PORT ORCHARD om'blv 2014.
By
Brandy 'nearson, CMC
City Clerk
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CITY OF PORT ORCHARD - CNG FRANCHISE
NOTICE OF CITY OF PORT ORCHARD
ORDINANCE
The following is a summary of an Ordinance approved by the Port Orchard City Council at their regular
Council meeting held June 24, 2014.
ORDINANCE NO.010-14
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON,
GRANTING CASCADE NATURAL GAS CORPORATION, A
WASHINGTON CORPORATION, ITS SUCCESSORS AND ASSIGNS,
THE RIGHT, PRIVILEGE, AUTHORITY AND FRANCHISE TO SET,
ERECT, LAY, CONSTRUCT, EXTEND, SUPPORT, ATTACH,
CONNECT, MAINTAIN, REPAIR, REPLACE, ENLARGE, OPERATE
AND USE FACILITIES IN, UPON, OVER, UNDER, ALONG, ACROSS
AND THROUGH THE FRANCHISE AREA TO PROVIDE FOR THE
TRANSMISSION, DISTRIBUTION AND SALE OF NATURAL GAS
Copies of Ordinance No. 010-14 are available for review at the office of the City Clerk of the City of Port
Orchard. Upon written request a statement of the full text of the Ordinance will be mailed to any
interested person without charge. Thirty days after publication, copies of Ordinance No. 010-14 will be
provided at a nominal charge.
City of Port Orchard
Brandy Rinearson
City Clerk
Publish: Port Orchard Independent
July 4, 2014