Chapter 12.44 — PUBLIC FRANCHISES FOR RIGHT-OF-WAY USE

It is the purpose and intent of the Town Council by enacting this chapter to protect the public's welfare in the Town's capacity as caretaker of the public rights-of-way and to establish nondiscriminatory procedures for the granting of franchises to use and occupy the public rights-of-way. The requirement for franchise agreements shall enhance the safety and ongoing maintenance of the Town's right-of-way while ensuring a uniform procedure that provides equal treatment for all potential users of the right-of-way. The Town has the authority to manage public property through its police power and other statutory and constitutional powers granted to municipalities. The authority and procedures contained herein are intended to preserve the Town's responsibility to control and protect the public rights-of-way from uses that are inconsistent with the best interest of the public and to maintain its ability to demand a fair rate of compensation for such use, while establishing procedures to treat applicants fairly in the interest of due process.

(Code 1990, § 12.40.010; Ord. No. 03-07, 2003)

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Commercial means a non-public, for profit, entity or use.

Exclusive franchise means a franchise for a term of years which grants privileges available to one and only one franchisee within the boundaries and services defined by the franchise agreement for the duration of the franchise.

Franchise means and includes any authorization granted hereunder in terms of franchise, privilege, or otherwise to erect, construct, install, operate, or maintain a facility for commercial purposes by occupying the public right-of-way within a specified area in the Town. Any such authorization shall not mean or include any license or permit required for the privilege of transacting and carrying on a business within the Town generally as required by other ordinances and laws of this Town.

Franchise agreement means an agreement entered into by the Town at its option with the franchisee which sets forth the terms and conditions of the grant of franchise.

Franchisee means the person, firm, or corporation granted a franchise by the Town Council under this chapter, and the lawful successor, transferee, or assignee of such person, firm, or corporation.

Nonexclusive franchise means a franchise which grants privileges available to multiple simultaneous franchisees within the boundaries and services defined by the franchise.

Right-of-way means any public highway, public street, public way, or public place in the Town, either owned by the Town or dedicated to the public for public purposes.

(Code 1990, § 12.40.020; Ord. No. 03-07, 2003)

The Town Council shall have the authority, in conjunction with any applicable State or Federal law provisions, to grant a franchise, whether exclusive or nonexclusive, to erect, construct, install, operate, or maintain any structure or equipment for commercial provision of utilities by occupying the public right-of- way as approved by the Town Council and subject to the terms and conditions of this chapter and any franchise agreement executed between the Town and the franchisee. Further, the Town shall have the authority to require reasonable compensation as determined by the Town Council in the form of a franchise fee for the privilege granted by any franchise in accordance with this chapter.

(Code 1990, § 12.40.030; Ord. No. 03-07, 2003)

(a)

No person shall erect, install, or construct any permanent structure or equipment related to provision of utilities, including both tank and distribution lines, cables, pipes and other related facilities, for commercial purposes on, above, or below the public right-of-way unless the person has first obtained a franchise for

such use granted by the Town Council under such terms and restrictions as are set forth herein or has a statutory right to use the public right-of-way for such purpose.

(b)

No person shall operate or maintain any permanent structure or equipment, related to the provision of utilities, for commercial use, which is erected, installed, or constructed on, above, or below the public right- of-way following the effective date of the ordinance from which this chapter is derived unless the person has first obtained a franchise for such use pursuant to the provisions of this chapter, or has obtained some other specific grant of authority from the Town for the use of the public right-of-way, or has a statutory right to use the public right-of-way for such purpose.

(c)

This chapter shall not apply to temporary or long-term encroachments which are governed under the provisions of Section 12.04.030.

(Code 1990, § 12.40.040; Ord. No. 03-07, 2003)

Franchisee shall be subject to all provisions of the franchise agreement and all applicable municipal, State, and Federal laws and regulations and any other public agency having jurisdiction over territory located within the Town. The grant of a franchise shall not relieve the franchisee of any obligation under this Code to obtain any building and construction permits, right-of-way permits, public works permits, excavation permits, use permits, or any other specific authorization that may be required for the proposed project. Unless the franchise agreement adopted by the Town Council provides otherwise, a franchise does not grant a right to construct or install physical improvements at specified locations, until such time said locations shall be determined and approved pursuant to Sections 12.08.010 through 12.08.030 or applicable planning or engineering processes and permits.

(Code 1990, § 12.40.050; Ord. No. 03-07, 2003)

A nonexclusive franchise shall be considered and granted according to the following procedures:

(1)

Each applicant for a franchise, or a transfer of a franchise, shall submit the following to the Town:

a.

A written request and application for franchise to the Town Manager or designee as prescribed by the Town Manager or designee;

b.

A proposal identifying the requested use of the public right-of-way, proposed locations of right-of-way occupation, descriptions of proposed physical improvements if they are to be constructed above ground,

method of construction, time of construction, hours of operation, resources and procedures for maintenance, and amount and method of compensation in the form of franchise fees to the Town, and the initial term of the proposed franchise and any renewal, if applicable;

c.

All applicable application processing fees required by ordinance or resolution of the Town Council; and

d.

Any other information required by the Town Manager or designee.

(2)

The Town Manager or designee shall negotiate proposed terms and conditions in the interest of the Town for a draft franchise agreement between the applicant and the Town in consultation with the Town Attorney or legal specialist.

(3)

The Town Council shall hold a public hearing to consider a resolution accepting the franchise agreement and granting the franchise accordingly. At least ten days prior to the hearing, the Town shall:

a.

Publish notice of public hearing and intent to grant a franchise in any newspaper of general circulation in the community;

b.

Send written notice by first class mail to the franchisee; and

c.

Post said notice in at least three posting places throughout the Town.

(4)

The Town Council may approve or modify and accept the franchise agreement and grant the franchise by resolution, deny the application for franchise, or continue the decision to grant the franchise and return the franchise agreement with direction for further negotiation between Town staff and the applicant.

(Code 1990, § 12.40.060; Ord. No. 03-07, 2003)

An exclusive franchise shall be considered and granted according to the following procedures:

(1)

Each applicant for an exclusive franchise or the transfer of an exclusive franchise, shall submit the following to the Town:

a.

A written request and application for exclusive franchise to the Town Manager or designee as prescribed by the Town Manager or designee;

b.

A proposal identifying the requested use of the public right-of-way, proposed locations of right-of-way occupation, description of proposed physical improvements if they are to be constructed on, above, or below ground, method of construction, time of construction, hours of operation, resources and procedures for maintenance, the amount and method of compensation in the form of franchise fees to the Town, and the initial term of the proposed exclusive franchise and any requested consideration of renewal, if applicable;

c.

All applicable application processing fees required by ordinance or resolution of the Town Council; and

d.

Any other information required by the Town Manager or designee.

(2)

The Town Council may receive the application and consider a resolution of intention to consider an exclusive franchise and call for proposals which recites the terms under which the Town intends to grant the exclusive franchise.

(3)

If the resolution is adopted by the Town Council, the Town shall publish within ten days after adoption of the resolution a notice of intention to consider an exclusive franchise and call for proposals in any newspaper of general circulation in the community and post said notice in at least three posting places throughout the Town. The notice shall invite competing proposals to be submitted to the Town Manager within 60 days of the date the resolution of intention to consider an exclusive franchise and call for proposals was adopted. The Town Manager or designee may also send notice to any other persons known to be interested in submitting a proposal.

(4)

The Town Manager or designee shall consider all proposals and submit one or more of the proposals to the Town Council for final selection. The Town Council may select one proposal and direct the Town Manager or designee to negotiate a draft exclusive franchise agreement between the Town and the party submitting the selected proposal. The Town Manager or designee may negotiate the draft exclusive franchise agreement in accordance with the terms of the proposal, the provisions of this chapter, and the best

interests of the Town. If the Town Council rejects all proposals submitted by the Town Manager, the process provided for in this chapter is concluded.

(5)

The Town Council shall hold a public hearing to consider a resolution accepting the exclusive franchise agreement and granting the exclusive franchise accordingly. At least ten days prior to the hearing, the Town shall publish notice of public hearing and intent to grant an exclusive franchise in any newspaper of general circulation in the community and post said notice in at least three posting places throughout the Town. The notice shall state the date, time, and location of the public hearing for protests and public comments to be heard.

(6)

The Town Council may approve or modify and accept the exclusive franchise agreement and grant the exclusive franchise by resolution, deny the application for exclusive franchise, or continue the decision to grant the exclusive franchise and return the exclusive franchise agreement with direction for further negotiation of terms and conditions between Town staff and the proposed franchisee, subject to acceptance by the Town Council.

(Code 1990, § 12.40.070; Ord. No. 03-07, 2003)

Franchisee shall be subject to all other conditions, restrictions, and specifications as outlined in the franchise agreement negotiated between the Town and franchisee as adopted and approved by resolution of the Town Council. Further, the Town reserves the power to adopt and enforce additional requirements and regulations as are necessary and convenient in the exercise of its jurisdiction under this chapter and may determine any question of fact which may arise during the existence of any franchise granted hereunder. In the event of any inconsistency between the franchise agreement or the requirements of this chapter and State or Federal law, the provisions of State or Federal law shall control.

(Code 1990, § 12.40.080; Ord. No. 03-07, 2003)

The Town Council may waive any procedural requirement imposed under this chapter when the Town Council determines that, it is impossible, impractical or not feasible to comply with the procedural requirements and the public health, safety or welfare would be jeopardized by requiring full compliance.

(Code 1990, § 12.40.090; Ord. No. 03-07, 2003)

Franchisee shall not assign or otherwise transfer a franchise granted by the Town Council pursuant to this chapter without the express prior written consent of the Town Council. The consent by the Town Council shall not be unreasonably withheld. The determination shall include a review of whether the proposed transferee has the financial ability, technical expertise and experience to carry out the obligations of the franchisee. The review for approval shall also include a determination that the franchisee is not in breach of

the franchise agreement. If the franchisee is in breach, the Town Council may approve the transfer adding conditions to the transfer to require correction of the breach.

(Code 1990, § 12.40.100; Ord. No. 03-07, 2003)

Franchisee shall agree to indemnify, defend and hold harmless the Town pursuant to a specific indemnity provision in its franchise agreement.

(Code 1990, § 12.40.110; Ord. No. 03-07, 2003)

Franchise agreements shall generally be granted for a period of no more than 20 years unless otherwise required by State or Federal law. Franchises can be granted for longer periods when the Town Council makes specific findings in the ordinance or resolution granting the franchise that the longer term is needed to amortize the franchisee's investment or for other reason which promotes the public health, safety or welfare. During the term of the franchise, the franchise may be extended upon the approval of the Town Council without compliance with the provisions of this chapter respecting the granting of a franchise. In deciding whether or not to extend a franchise, the Town Council shall consider the capitalization, investment and financing requirements of the franchisee and the benefits accruing to the Town for such extension.

(Code 1990, § 12.40.120; Ord. No. 03-07, 2003; Ord. No. 04-09, § 1, 2004)

In the event the Town should acquire the physical assets of the system under franchise or any portion thereof through voluntary acquisition or through the use of its power of eminent domain, the Town shall pay for the fair market value of the facilities and property acquired, but the franchise agreement shall be deemed automatically terminated in the condemnation action and the Town shall not pay any additional amount for the value of the franchise itself. Any condemnation action shall be conducted in accordance with all procedures of State law.

(Code 1990, § 12.40.130; Ord. No. 03-07, 2003)

(a)

Within 90 days following the granting of any franchise, the franchisee shall file with the Public Works Director a written safety plan, including provisions:

(1)

Identifying the location of all facilities;

(2)

Discussing how the facilities might be damaged and the consequences to public health and safety;

(3)

Any emergency response procedures;

(4)

Providing for notice to appropriate agencies of the plan, response procedures and method of notification;

(5)

Traffic control measures;

(6)

Compliance and procedures with all other State and Federal laws, and other procedures as required by the Public Works Director.

(b)

The franchisee shall submit the plan to the Public Works Director for review and comment on the plan as well as any applicable State or Federal agencies of appropriate jurisdiction. The franchisee shall make all necessary revisions to the safety plan, and thereafter periodically, and, at least once per year, update the plan.

(Code 1990, § 12.40.140; Ord. No. 03-07, 2003)

In granting any franchise, the Town Council shall determine the amount of financial security which shall be posted to secure franchisee's obligations under the franchise. The financial security shall be as such amount to cover the cost of franchisee's fulfilling its obligations hereunder and may be utilized if franchise fails to perform as required hereunder or fails to reimburse the Town in the event the Town has to remedy any breaches by franchisee. The security may be a bond, letter of credit, cash deposit, deed of trust or other form approved by the Town's attorney. The security shall be drawn on a responsible institution and shall be promptly replenished if drawn upon by an amount to be determined by the Public Works Director.

(Code 1990, § 12.40.150; Ord. No. 03-07, 2003)

After the granting of the franchise by the Town Council, the applicant shall have 60 days to file all certificates of insurance, post all bonds, comply with all other conditions set by the Town Council and file franchisee's certificate of acceptance. The execution of the certificate of acceptance and filing of the same with the Town Clerk shall be franchisee's acknowledgment that all conditions of the franchise are acceptable and shall constitute a waiver of all claims by franchisee, and thereafter franchisee shall be estoppel from challenging such approval or the terms thereof. In the event franchisee fails to timely file such acceptance, the franchise and the Town Council's approval thereof shall be null and void.

(Code 1990, § 12.40.160; Ord. No. 03-07, 2003)

Any person or entity utilizing Town right-of-way as a commercial enterprise which has not entered into a franchise agreement with the Town which would be required as a new use to obtain a franchise hereunder, but which use existed prior to the adoption of the ordinance from which this chapter is derived, is hereby declared to be a nonconforming use. Within 30 days of the effective date of the ordinance from which this chapter is derived, the Public Works Director shall give all persons known to be subject to this chapter written notice of the provisions hereof. Whether or not they receive such notice, within 60 days of the effective date of the ordinance from which this chapter is derived, all persons subject to this chapter shall give the Public Works Director written notice of their intent to seek a franchise or discontinue and remove such facilities. A decision to remove any active lines shall require a removal plan to ensure uninterrupted service to the utility user. Any such nonconforming use shall have a period of six months from the effective date of the ordinance from which this chapter is derived to negotiate and enter into a franchise agreement pursuant to this section unless the Town Council agrees to an extension based on evidence that negotiations are progressing in good faith. In the event a franchise agreement is not executed within the six month period, as extended, any such existing use is subject to an immediate back payment of franchise fees pursuant to Public Utilities Code § 6205.1 and shall be responsible for payment for up to four years prior to the effective date of the ordinance from which this chapter is derived and for future franchise fees.

(Code 1990, § 12.40.170; Ord. No. 03-07, 2003)

(a)

In the event that the use of the franchise system is discontinued for any reason for a period of 12 consecutive months, or in the event such franchise system or property has been installed in any street or public place without complying with the requirements of the franchise or this chapter, or the franchise has been terminated, canceled or has expired, the franchisee shall within 30 days, upon being given written notice from the Public Works Director, provide a removal plan to the Public Works Director describing the method and procedure to cause the removal from the streets or public places all such property and equipment of such franchise system unless the Public Works Director permits such to be abandoned in place. The franchisee shall commence removal in accordance with the plan within 30 days of the removal plan approval unless a longer period is approved by the Public Works Director as necessary to comply with the provisions of Section 12.08.030, restricting the time periods for construction work in the public right-of- way.

(b)

After removal, the franchisee shall promptly restore the street or other area from which such property has been removed in accordance with the conditions and in the manner provided in Section 12.08.060.

(c)

Failure of the franchisee to submit a removal plan, as provided in Subsection (a) of this section within the 30 days, or failure to complete removal in accordance with the plan, shall result in the Town making a

determination as to whether to cause the removal or leave the property or equipment abandoned in place. Any removal or legal costs or fees incurred by Town pursuant to this section shall be repaid by the franchisee.

(d)

The removal or abandonment of any property or equipment shall not release the franchisee from any warranty and indemnity provisions in the franchise, including, but not limited to, the hazardous waste indemnity, which shall survive the termination of the franchise agreement unless otherwise provided by the franchise agreement.

(Code 1990, § 12.40.180; Ord. No. 03-07, 2003)

The franchisee shall from time to time protect, support, temporarily dislocate, temporarily or permanently as may be required, remove or relocate, without expense to the Town or any other governmental entity, any facilities installed, used, and maintained under the franchise, if and when made necessary by any lawful change of grade, alignment, or width of any public street, including the construction of any subway or viaduct, by the Town or any other governmental entity or made necessary by any other public improvement or alteration in, under, on, upon or about any public street or other public property, whether such public improvement or alteration is at the instance of the Town or another governmental or propriety function, or made necessary by traffic conditions, public safety, street vacation or any other public project or purpose of Town or any other governmental entity.

(Code 1990, § 12.40.190; Ord. No. 03-07, 2003)

The Town Council reserves the right to revoke any franchise granted pursuant to this chapter, and all rights and privileges pertaining thereto, in the event that the franchisee violates any material provision of the franchise agreement, this chapter, or any other material provision of this Code or other law subject to enforcement by the Town. Upon suspicion of such a violation, the Town Manager shall provide written notice to the franchisee with a time for curing the violation. Failure to cure within the specified time shall result in a hearing before the Town Manager. If the Town Manager believes a violation is occurring and not cured in a timely fashion, the Town Manager may schedule a hearing before the Town Council to consider revocation of the franchise and notify franchisee thereof by certified and regular first class mail at least 30 days prior to said hearing. The franchisee may present evidence rebutting the violation or evidence showing an effort to correct the violation and mitigate its effects. Following the hearing, the Town Council may revoke the franchise, continue the franchise, or continue the franchise subject to additional conditions, at its discretion. The right to revoke any franchise granted pursuant to this chapter is in addition to, and not in lieu of, any other remedies available to the Town.

(Code 1990, § 12.40.200; Ord. No. 03-07, 2003)