Milpitas Municipal Code Ch. 19 Non-Exclusive Nitrogen Gas Franchise

Whenever in this Chapter the following words or phrases are used, they shall have the following respective meanings:

.01

The word "Grantee" shall mean the Grantee of a non-exclusive franchise, and its lawful successors or assigns, granted under the provisions of this Chapter.

.02

The word "City" shall mean the City of Milpitas, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form.

.03

The word "streets" shall mean the public streets, ways, easements, including, but not limited to, public service utility easements, alleys, and places as the same now or may hereafter exist within City, including State and County highways and streets, now or hereafter established within City and freeways hereafter established within City.

.04

The words "gas" or "industrial gas" shall mean nitrogen gas only. The term "industrial gas" as used herein is synonymous with the term "gas" as herein defined.

.05

The phrase "pipes and appurtenances" shall mean pipes, pipelines, mains, services, traps, vents, vaults, manholes, meters, gauges, regulators. valves, conduits, appliances, attachments, appurtenances and, without limitation to the foregoing, any other property located or to be located in, along, across or under the streets of City, or other public property of City and used or useful in transmitting and/or distributing gas.

.06

The phrase "install, maintain and use" shall mean to lay, construct, erect, install, operate, maintain, use, repair or replace.

.07

The phrase "annual fee" shall mean a fee for each calendar year, or fractional calendar year for the term of the franchise.

(Ord. 220(part), 1/8/85)

Pursuant to authority granted in Section 6201 et seq. of the Public Utilities Code of the State of California (The Franchise Act of 1937), City is empowered to grant non-exclusive franchises to install, construct, maintain and use under, along, across or upon the public streets, easements, ways and places within the City all pipes and appurtenances for transmitting and distributing industrial gas for any and all purposes, provided, however, that such rights shall not include the right to occupy any park, playground. or other municipal property (exclusive of public thoroughfares), unless a special permit therefor shall be granted by the City Council, and provided further that such rights shall apply to federal, State, County and City streets now or hereafter established within City, and freeways hereafter established within the City, only to the extent that City is empowered to grant such rights with respect thereto, subject to laws relating to the location and maintenance of such pipes and appurtenances therein.

(Ord. 220(part), 1/8/85)

The City specifically reserves the right to grant more than one franchise as provided herein and to grant franchises to any persons at any time and in any area of the City as the City determines, in its sole discretion.

(Ord. 220(part), 1/8/85)

A franchise license shall be for fifteen (15) years and for future renewable terms of fifteen (15) years as agreed in writing by officials of both parties, or until the franchise license is voluntarily surrendered or abandoned by Grantee, or until the State or a municipal or public corporation, including City, 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 license and situated in the territorial limits of the municipal or public corporation purchasing or condemning such property, or until said franchise license shall be forfeited for noncompliance with its terms by Grantee. Also, see Section 17 of this Chapter.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220(part), 1/8/85)

Grantees shall, during the term of said franchise license, pay to City as follows:

(a) An annual fee equal to four thousand thirty nine dollars ($4,039) per mile for the calendar year 2013 (rounded up to the nearest mile) of the total gas-carrying pipe installed within the streets of City.

(b) An additional annual fee per customer location within City having a connection to the franchise license system equal to the product of seven hundred seventy seven dollars ($777) for the calendar year 2013 and nominal inside diameter of the pipe, expressed in inches and fraction thereof at the property line of each customer location connected to each gas-carrying pipe. In calculating the annual fee per customer location connection, Grantee shall include any customer who has a connection for service during any part of the calendar year or portion thereof for which the fee is payable. Each separate location receiving nitrogen gas shall occasion payment of the above annual fee.

(c) In no event shall a Grantee pay City pursuant to this Section III-19-5.00 an amount less than two thousand dollars ($2,000) per calendar year, or portion thereof, for the term of the franchise license.

(d) The fees stated above in (a) and (b) of this section will be increased annually at a rate of seven percent (7%) per annum over the fee amount of the preceding calendar year throughout the term of the franchise license or any extension thereto.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220.1 (part), 5/16/00; Ord. 220(part), 1/8/85)

For each calendar year or portion thereof during the term of a franchise license, Grantee shall file with the City Clerk of City a verified statement showing in detail the lineal feet of gas pipes installed within the streets of City and the customer locations within City having a connection to its franchise license system. Said statement shall be filed for each calendar year on or before January 30 th of the calendar year following the calendar year to which the statement applies or within 30 days after the termination of its franchise license, whichever is sooner. The initial filing shall be the first January 30 after the execution of the agreement for the franchise license. Grantee shall pay City the amount of the license fees described in III-19-5.00(a), (b) or (c), including an annual increase described in III-19-5.00(d), for each calendar year or portion thereof at the time the statement for such calendar year is filed pursuant to this Section III-19-6.00.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220.1 (part), 5/16/00; Ord. 220 (part), 1/8/85)

In the event that the payments required herein and statement required by III-19-9.00 are not received by the City by the time specified herein, Grantee shall pay to the City a late charge (to cover administrative, bookkeeping and other expenses attendant to said late payment and statement) of one percent (1%) of the amount otherwise due, plus interest at the rate of ten percent (10%) per annum on any late payment computed from the date due.

(Ord. 220(part), 1/8/85)

No acceptance of any payment shall be construed as an accord that the amount paid is the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for further or additional sums due and payable.

(Ord. 220(part), 1/8/85)

City may audit the fiscal records of Grantee. Grantee shall permit such examination of its records by City as is necessary and material to the determination of the performance of Grantee's franchise license obligation. Grantee shall permit such examination of its records by City as is necessary and material to the determination of the performance of Grantee's franchise license obligation.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220(part), 1/8/85)

Within five days of the grant of a franchise, Grantee shall submit a corporate surety bond in favor of City and approved by City Council in a penal sum of one hundred thousand dollars ($100,000), conditioned that the Grantee shall well and truly observe, fulfill and perform each term and condition of the franchise, and that in case of any breach of condition of the bond, the amount of the penal sum shall be recoverable.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220(part), 1/8/85)

As a material portion of the consideration for the granting of the franchise and by accepting said franchise, Grantee agrees to hold the City of Milpitas, its officers and employees free and harmless for and on account of any claims, demand, liability, obligation, account, action, cause of action (whether the same be known or unknown, expected or unexpected, already appeared or developed or now latent, or may in the future appear or develop) arising out of or in any way connected with the exercise of the franchise by Grantee, including but not limited to damages or injuries or death to persons or damage or injuries to property.

(Ord. 220(part), 1/8/85)

Grantee shall, upon the execution of a written agreement for its franchise license, furnish to City, and at all times during the existence of any license hereunder, maintain in full force and effect, at its own cost and expense, a comprehensive general liability insurance policy, or at Grantee's option, an Owner's Protective Liability Policy, in protection of City of Milpitas, its officers, its agents, employees and volunteers, with a company approved by the City Council and in a form satisfactory to the City Attorney, protecting City and all persons against liability for loss or damage for personal injury, death and property damage, occasioned by the operations of Grantee under such license with a combined single limit for bodily injury and property damage of two million dollars ($2,000,000) per occurrence.

The policy mentioned in the foregoing paragraph shall name City of Milpitas, its officers, its agents, employees and volunteers, as additional insured and shall contain a provision that a written notice of cancellation or reduction in coverage of said policy shall be delivered to City thirty (30) days in advance of the effective date thereof. If such insurance is provided by a policy which also covers Grantee or any other entity or person other than those above-named, then such policy shall contain a standard cross-liability endorsement.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220(part), 1/8/85)

(a) Grantee shall not install, maintain, use or cause, allow or permit to be installed, maintained, or used within the streets, or other public property of City, any pipes or appurtenances unless and until Grantee shall have filed with the City Engineer a map showing the area or portion of the City within which service shall be made available to customers by Grantee, together with plans and specifications for installation of such pipes and appurtenances and received approval for the installation.

(b) The City shall have the right to disapprove of vertical and horizontal locations of the pipes to be installed under, along, across the streets of City. All plans and specifications shall be approved by the Fire Department of the City, as to compliance with Health and Safety standards. The City Engineer shall be responsible for review of plans and specifications, permit issuance, and inspection of the installation of all pipes and appurtenances in the streets of City.

(c) Grantee shall pay to City a fee for review of Grantee's plans and specifications, for inspecting the installation of all pipes and appurtenances, and other required services. The fee for review and inspection shall be in accordance with City requirements at the time the project is instituted.

(d) Before any work is commenced on or in any street of City, Grantee shall comply with the provisions of the Milpitas Municipal Code as presently provided or as hereafter amended, and the imposition of any reasonable requirements and any permits issued pursuant thereto. Without limitation to the provisions hereof, and except as to the location of pipes and appurtenances in the streets, nothing contained in any license agreement exempts Grantee from obtaining environmental clearance, use or zoning permits and/or encroachment permits prior to the installation, maintenance or use of any pipes or appurtenances. Grantee shall be required to obtain and pay for the annual Milpitas Business License.

(e) All crossings of a street by a pipeline shall be bored and jacked, open cut, directional drill or any other method as approved by the City. All installations must meet City of Milpitas standard specifications and requirements. Restoration shall be performed to the satisfaction of the City.

(f) Grantee shall file with the City Engineer on the completion of a new project a current as-built map or set of maps of the project, drawn to scale or a summary written listing of locations (street name, cross streets, length, diameter of pipe, approximate location to curb and depth of cover, customer name and site address, lateral diameter, dates of operation) showing all pipes or appurtenances installed and in place in the streets of City. Upon request from the City, Grantee shall provide maps of any pipelines in the City and upon request mark said facilities.

(g) Grantee must become a member, if not already a member, of underground service alert (USA) and remain an active member for perpetuity of the license agreement. As a participant, Grantee is responsible for field marking its subsurface facilities as part of USA notification in accordance with the requirements of Section 4216 of the State of California Government Code, as it now reads or may hereinafter be amended.

(Ord. No. 220.2, § 2, 6/18/13; Ord. 220(part), 1/8/85)

Grantee shall provide a faithful performance bond and labor and materials bond satisfactory to City (each in an amount equal to the full cost of all construction undertaken pursuant to this franchise) conditioned upon the faithful performance of construction and the payment for all labor and materials in connection therewith.

(Ord. 220(part), 1/8/85)

.01

Grantee will remove or relocate (without any expense to City) 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, way, easement or place, including the construction of any viaduct or subway, by City. Grantee's obligation to remove or relocate its facilities without expense to the City shall also apply to those facilities that may have, at one time, been placed on private property, but are currently within the public right-of-way.

.02

The City reserves the right to improve any street, way, easement or other public place, or portion thereof, over and within which this franchise is granted, including the widening, change of grade, construction or reconstruction of such street, way, easement or other public places, or any portion thereof, and there is further reserved to the City and any political subdivision or district within the city the right to construct, reconstruct, install, repair and maintain in any such street way easement or other public places, or portion thereof, any public improvement.

.03

Except in an emergency, if notice in writing is given to Grantee ninety (90) days in advance of the fact that work is to be done pursuant to any right reserved above in this section, specifying the general nature of the work and the area in which the same is to be performed, then Grantee shall do all things necessary to protect its pipeline during the progress of such work, and if ordered by City, said notice will provide an alternate route, if available and practical, within the public streets in which Grantee shall at its option relocate its pipeline for a temporary or permanent use, to such extent, in such manner and for such period as shall be necessary to permit the performance of such work in an economical manner, and in accordance with the generally recognized engineering and construction methods, and to permit the maintenance, operation and use of such public improvement of the street, way, easement or other public places as so improved. All of such things to be done and work to be performed by Grantee shall be at the sole cost and expense of Grantee. Provided, however, that in an emergency, and upon oral notice from City, Grantee shall promptly undertake all reasonable and necessary acts to protect its pipeline and City property and the public health and safety.

.04

In the event that City, or any political subdivision or district within City, shall hereafter construct, install, reconstruct or repair any bridge, culvert, storm drain, sanitary sewer or other facility owned or operated by any such agencies over or underlying any street, way, easement or other public places in which Grantee's pipeline is located pursuant to this franchise, and in the event that the cost of such work as may reasonably be required is increased in order to provide for the installation, maintenance or operation of Grantee's pipeline in or on the area covered by or underlain by said bridge or other artificial support, then Grantee shall either modify its pipelines to accommodate said bridge or other facilities, to eliminate the increased cost incurred by presence of Grantee's pipelines, or shall pay to City or such political subdivision or district doing such work the full amount of increase of cost upon completion of such construction, installation or repair, such cost to be properly documented and identified to Grantee.

(Ord. 220.1 (part), 5/16/00)

Grantee shall pay to City on demand the cost of all repairs to public property made necessary by any of the operations of Grantee under the franchise.

(Ord. 220(part), 1/8/85)

If Grantee abandons use of the pipelines installed under or pursuant to the franchise, the title to said pipelines shall vest in City upon notification of abandonment and City's consent to and acceptance of title.

(Ord. 220(part), 1/8/85)

The line of any customer whose service is disconnected will be suitably capped off by Grantee to City's satisfaction.

(Ord. 220(part), 1/8/85)

No franchise granted in any way impairs or affects the right of City to acquire the property of the Grantee by purchase or condemnation, and nothing contained in such a franchise shall be construed to contract away, modify or abridge either for a term or in perpetuity the City's right of eminent domain.

(Ord. 220(part), 1/8/85)

No franchise granted under this Chapter shall ever be given any value before any court or other public authority in any proceeding of any character brought by City or any agency thereof in excess of the cost to the Grantee of the necessary publication at the time of acquisition.

(Ord. 220(part), 1/8/85)

.01

An applicant for a franchise hereunder shall file with City an application stating:

a) the applicant's name and address.

b) the purpose and term of the franchise, not to exceed 15 years.

c) applicant's agreement to pay the franchise fees herein specified to City during the life of the franchise.

d) applicant's agreement to abide by the provisions of this Chapter and the franchise grant.

.02

Resolution of Intention to Grant Franchise; Notice of Hearing; Publication of Notice; Time for Hearing: Upon receipt of the application, the City Council may pass its resolution declaring its intention to grant the franchise applied for, stating the character of the franchise, setting forth a notice of the day, hour, and place when and where all persons having any objection to the granting thereof may appear before the City Council and be heard thereon, and directing the Clerk of City Council to publish the notice at least once within fifteen (15) days after the passage of the resolution in a newspaper of general circulation within City.

.03

Contents of Notice: The notice of the time and place of hearing objections shall state that the Grantee of the franchise and its successors and assigns will, during the life of its franchise, pay to City the sum specified in this Chapter, that said sum will be paid annually from the date of the granting of the franchise, and in the event such payment is not made, the franchise will be forfeited. This notice shall also designate the term, for which the franchise is proposed to be granted which shall not be more than 15 years.

.04

Written Protests; Hearings; Grant of Franchise: At any time not later than the hour set for the hearing of objections, any person interested may make written protest stating objections, against the granting of the franchise. The protest shall be signed by the protestant and be delivered to the Clerk of City. At the time set for hearing objections, the City Council shall proceed to hear and pass upon all protests so made and its decision shall be final and conclusive, subject to the right of referendum of the people. The legislative body may adjourn the hearing from time to time.

If no protest in writing is delivered to the Clerk up to the hour set for hearing, or such protests as are filed have been heard and determined by the City Council to be insufficient, or have been overruled or denied, the City Council may grant the franchise. The franchise shall be granted by ordinance adopted in the manner prescribed by law for the enactment of ordinances.

.05

Reimbursement to City for Publication Expenses: The applicant shall pay to City a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the granting of the franchise. Such payment shall be made within thirty (30) days after City furnishes a written statement of the expenses.

.06

Acceptance of Franchise; Filing; Effect: A franchise granted under this Chapter does not become effective until the Grantee files written acceptance thereof with the Clerk. When so filed, the acceptance constitutes a continuing agreement by the Grantee that if and when the City thereafter annexes, or consolidates with, additional territory, all franchises, rights and privileges then owned by the Grantee therein (excluding those rights and privileges which remain private property rights i.e., which do not become public streets or public property), shall be deemed abandoned within the limits of the additional territory.

Any franchise granted under this Chapter is in lieu of all other franchises, licenses, rights, or privileges owned by the Grantee, or by any successor of the Grantee to any rights under the franchise within the limits of the City as such limits exist at the time of the granting of the franchise or as they may thereafter exist. The acceptance of any such franchise granted under this Chapter shall operate as an abandonment of all such franchises, licenses, rights, and privileges within the limits of the City as such limits at any time exist, in lieu of which the franchise is granted under this Chapter.

By accepting the franchise, the Grantee covenants and agrees to perform and be bound by each and all of the terms and conditions imposed by Federal or State statutes and local ordinances, regulations, specifications and orders.

Said franchise is granted and must be accepted by the Grantee upon the express condition that the streets, easements, ways and places of City shall be used and that gas is furnished by Grantee in strict compliance with the terms of the franchise and applicable provisions of the Milpitas Municipal Code.

Nothing contained in this Chapter shall exempt any Grantee from compliance with any other applicable provision of the Milpitas Municipal Code (including, but not limited to, the provisions of Chapter 302, Title V Regulating Hazardous Materials).

.01

Violation of Franchise; Demand for Compliance; Forfeiture: If the Grantee of any franchise granted under this Chapter fails, neglects or refuses to comply with any of the provisions or conditions prescribed in this Chapter, and does not within ten (10) days after written demand for compliance begin the work of compliance, or after such beginning does not prosecute the work with due diligence to completion, the City Council may declare the franchise forfeited. Without limitation to the generality thereof, any neglect, omission, or refusal by Grantee to file the statement or to pay the fees required hereunder at the times or in the manner provided constitutes grounds for the declaration of a forfeiture of the franchise and of all rights thereunder.

City may sue for the forfeiture of any franchise granted pursuant to this Chapter, in the event of noncompliance with any of the conditions thereof by the Grantee, its successors, or assigns.

.01

No franchise granted hereunder shall be sold, assigned, transferred, leased or sublet, in whole or in part, voluntarily or by operation of law, without written consent of the City Council of City. Provided, however, said consent shall not be unreasonably withheld.

.02

Where consent is granted, the Grantee shall file with the City within thirty (30) days after any sale, transfer, assignment, or lease or sublet 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.

From and after the effective date of this Chapter, it shall be unlawful for any person to construct, install, maintain or use within the City. any equipment, plant, facilities, pipes and appurtenances for transmitting gas unless a valid and subsisting license issued prior to the effective date of this Chapter or a valid and subsisting franchise has first been obtained.

Anyone convicted of violating this Chapter shall, upon conviction, be guilty of an infraction and shall be punished by a fine in accordance with the provisions of 1-1-4.09 of the Milpitas Municipal Code.

The violation of any provision of this Chapter is hereby declared to be a public nuisance, and the Attorney for the City of Milpitas shall, upon order of the City Council, commence action or proceedings for the abatement or removal or enjoinment thereof in the manner provided by law. Alternately, the City Council may cause its abatement in accordance with the procedures set forth in Article 4, Chapter 20, Title I of the Milpitas Municipal Code. The City Attorney may also be authorized to sue for franchise fees which would have been due hereunder had the required franchise been obtained.

Whenever any work is being done contrary to the provisions of this Chapter, or which endangers the public health or safety or health or safety of any person or which violates any governmental law or regulation, the City Engineer or Building Official may order the work stopped by notice in writing served on any person engaged in the doing of such work or in the causing of such work to be done; any person shall forthwith stop such work until authorized in writing to resume work by said City Engineer or Building Official.

If any section, subsection, sentence, clause or phrase of this Chapter is for any reason held illegal, invalid or unconstitutional, such decision shall not affect the validity of the remaining portions hereof. The Council hereby declares that it would have passed this Chapter and each section, subsection, sentence, clause, and phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared illegal, invalid or unconstitutional. The invalidity of any portion of this Chapter shall not abate, reduce or otherwise affect any consideration or other obligation required of a franchisee of any franchise granted hereunder.

This Ordinance is enacted as Chapter 19, Title III of the Milpitas Municipal Code. It shall be known by the short title "Industrial Gas Franchise Ordinance." It may be pleaded and cited as such.

The effective date of this Chapter will be 30 days following adoption by the Milpitas City Council, but in no event prior to January 1, 1985.