Ordinance No. 2021-3172 (Natural Gas)
AN ORDINANCE, GRANTING TO KANSAS GAS SERVICE, A DIVISION OF ONE GAS, INC., AND ITS SUCCESSORS AND ASSIGNS, A NATURAL GAS FRANCHISE, PRESCRIBING THE TERMS THEREOF AND RELATING THERETO, PROVIDING DEFINITIONS OF TERMS, PRESCRIBING A FRANCHISE FEE, PROVIDING TERMS AND CONDITIONS FOR THE USE OF PUBLIC RIGHTS-OF-WAY, REQUIRING ADVANCE NOTICE OF WORK AND DUTY TO REPAIR, PROVIDING FOR INDEMNIFICATION AND A HOLD HARMLESS AGREEMENT, PROVIDING FOR RULES AND REGULATIONS, PRESCRIBING INSURANCE REQUIREMENTS, RESERVING CERTAIN RIGHTS, PROVIDING FOR REVOCATION AND TERMINATION, PROVIDING FOR AN ACCEPTANCE OF THE TERMS OF THE FRANCHISE, PROVIDING FOR A REOPENER, PROVIDING FOR NOTICE OF ANNEXATIONS, PRESCRIBING RELEVANT GOVERNING LAW, PROVIDING FOR TRANSFER AND ASSIGNMENT OF THE FRANCHISE, PROVIDING FOR POINTS OF CONTACT AND NOTIFICATIONS, PROVIDING FOR AN AGREEMENT TO RENEGOTIATE, AND REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES INCONSISTENT WITH OR IN CONFLICT WITH THE TERMS HEREOF.
BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF CONCORDIA, KANSAS:
SECTION 1. DEFINITIONS.
For purposes of this Ordinance the following words and phrases shall have the meanings given herein. When not inconsistent within the context, words used in the present tense include the future tense and words in the single number include the plural number. The word “shall” is always mandatory, and not merely directory.
“City” — shall mean the City of Concordia, Kansas, and, where appropriate by the context, each of its departments, divisions and component units, including public trusts or authorities of which the City is a beneficiary.
“Company” — shall mean Kansas Gas Service, a division of ONE Gas, Inc.
“Consumer” — shall mean any person or Entity located within the municipal corporate limits of the City and serviced by the Company through any use of the Public Ways.
“Distribution” or “Distributed” — shall mean all sales, distribution, or transportation of natural gas to any Sales or Transportation Consumer for use within the City by the Company or by others through the Distribution Facilities of Company in a Right of Way.
“Distribution System” or “Distribution Facilities” — shall mean a pipeline or system of pipelines, including without limitation, mains, pipes, boxes, reducing and regulating stations, laterals, conduits and services extensions, together with all necessary appurtenances thereto, or any part thereof located within any Public Way, for the purpose of Distribution or supplying natural gas for light, heat, power and all other purposes.
“Effective Date” — shall mean the date the Company files its written acceptance with the City following the final passage and approval of said Ordinance by the City.
“Entity” — shall mean any individual person(s), governmental entity, business, corporation, partnership, firm, limited liability corporation, limited liability partnership, unincorporated association, joint venture or trust and shall include all forms of business enterprise not specifically listed herein.
“Facility” or “Facilities” — refers to the Company’s Distribution System or Distribution Facilities.
“Franchise” — shall mean the grant of authority by the City to transport, distribute or sell natural gas to the inhabitants of the City and to operate a Distribution System or Distribution Facilities.
“Franchise Fee” shall refer to the charges as prescribed in Section 3 of this Franchise Ordinance.
“Franchise Ordinance” — shall mean this Ordinance granting a natural gas franchise to the Company.
“Gross Receipts” — shall mean any and all compensation and other consideration derived directly by the Company from any Distribution of natural gas to Consumers within the City. Such term shall not include revenue from certain miscellaneous charges and accounts including but not limited to: connection fees, disconnection and reconnection fees, temporary service charges, delayed or late payment charges, collection fees, bad debts, customer project contributions, meter test fees, revenues received by Company from Consumers as franchise fee reimbursement, and returned check charges. Additionally, Gross receipts shall not include credit extended pursuant to the Cold Weather Rule (or substitute rule) of the Kansas Corporation Commission for natural gas sold within the corporate limits of the City, nor Volumetric Rate Fees collected by Company and remitted to City in accordance with Section 3 of this ordinance.
“MCF” — shall mean a measurement of natural gas equal to one thousand cubic feet. It is assumed for purposes of this Franchise Ordinance that one MCF equals one million British Thermal Units.
“Public Improvements” — means any public facilities, buildings, or capital improvements, including, without limitation, streets, alleys, sidewalks, sewer, water, drainage, right-of-way improvements, and other Public Projects.
“Public Project” — means any project planned or undertaken and financed by the City or any governmental entity for construction, reconstruction, maintenance, or repair of public facilities or improvements, or any other purpose of a public nature paid for with public funds.
“Public Way” or “Public Ways” — shall mean the area on, below or above the present and future public streets, avenues, alleys, bridges, boulevards, roads, highways, parks, parking places and other public areas, and general utility easements, dedicated to or acquired by the City. The term does not include easements obtained by private entities providing utilities services or private easements in platted subdivisions or tracts.
“Sales Consumer” — shall mean, without limitation, any Entity that purchases natural gas within the Corporate City limits from Company for delivery to such consumer within the City through the Company’s Distribution System or Distribution Facilities.
“Settlement Prices” — shall mean the settlement prices for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX) on the fifteenth day of each month as published in nationally recognized publications such as the CME Group (CME) or S&P Global Platts (Platts) on the following business day (or the next day in which a Settlement Price is published).
“Transport Gas” — shall mean all natural gas transported by Company pursuant to a Transportation Tariff Arrangement or by other agreement, but not sold by the Company, though Company’s Distribution Facilities to any Consumer or user located within the municipal corporate limits of the City.
“Transportation Consumer” — shall mean without limitation, any Entity that transports Transport Gas pursuant to a Transportation Tariff or by other agreement, within the City’s municipal corporate limits through Company’s Distribution Facilities for consumption within the City’s corporate limits.
“Volumetric Rate” is the rate applicable to each Mcf of Transport Gas distributed to Transportation Consumers. The Volumetric Rate shall be based on a twelve month average of Settlement Prices as calculated from July through June. Initially, the Settlement Price shall mean $0.1188 per MCF for Transport Gas distributed to Transportation Consumers within the City as represented in “Attachment A,” which is incorporated herein and attached hereto. There shall be an annual recalculation of the Volumetric Rate which shall be effective each January 1. The recalculation shall be based on Settlement Prices for the previous twelve-month period. The average Settlement Prices for each of the twelve months shall be summed and divided by twelve and multiplied by 5% (five percent) to obtain the Volumetric Rate to be effective January 1 of the next succeeding year. The Company shall calculate the Volumetric Rates in accordance with the procedures set out herein and then filed with the City Clerk by July 31 of each year for those rates to be effective on January 1 of the following year.
SECTION 2. GRANT OF NON-EXCLUSIVE FRANCHISE.
SECTION 3. FRANCHISE FEE.
SECTION 4. USE OF PUBLIC RIGHT-OF-WAY.
SECTION 5. NOTICE OF WORK & DUTY TO REPAIR.
SECTION 6. INDEMNITY AND HOLD HARMLESS.
The Company, its successors and assigns, in the construction, maintenance, and operation of its natural gas system, shall use all reasonable and proper precaution to avoid damage or injury to persons and property, and shall indemnify, defend, and hold and save the City harmless from any and all claims, damage, judgements, and reasonable expense, including attorney fees, caused by the negligence of the Company, its successors and assigns, or its (or their) agents or servants. The Company or the City shall promptly advise the other in writing of any known claim or demand against the Company or the City related to or arising out of the Company’s activities in any Public Way.
SECTION 7. RULES AND REGULATIONS.
The Company shall have the right to make and enforce such reasonable rules and regulations as it may deem necessary for the extension of its Facilities, the sale of its gas, and the prudent conduct of its business, provided that such rules and regulations shall neither be in conflict with the laws of the State of Kansas, with the orders, rules or regulations of the Kansas Corporation Commission or other regulatory authority having jurisdiction, nor with the ordinances and regulations of the City insofar as they are consistent with the jurisdiction of the Kansas Corporation Commission or such other regulatory authority.
SECTION 8. INSURANCE REQUIREMENTS.
During the term of this Ordinance, the Company shall obtain and maintain insurance coverage at its sole expense with financially reputable insurers. The Company may elect to use the services of an affiliated captive insurance company for this purpose. The Company shall provide not less than the following insurance:
As an alternative to the above insurance requirements, the Company may demonstrate to the satisfaction of the City that it is self-insured and as such Company has the ability to provide coverage in an amount not less than One Million Dollars per occurrence and Two Million Dollars in the aggregate, to protect the City from and against all claims by any person whatsoever for loss or damage from personal injury, bodily injury, death or property damage occasioned by the Company, or alleged to so have been caused or occurred.
SECTION 9. REVOCATION AND TERMINATION.
In case of failure on the part of the Company to comply with any of the provisions of this Ordinance, or if the Company should do or cause to be done any act or thing prohibited by or in violation of the terms of this Ordinance, the Company may be subject to forfeiture of all rights, privileges and franchise granted herein, and all such rights, privileges and franchise hereunder be deemed ceased, terminated and null and void, and this Ordinance may be deemed revoked or terminated, provided that said revocation or termination shall not take effect until the City has completed the following procedures: Before the City proceeds to revoke and terminate this Ordinance, it shall first serve a written notice upon Company, setting forth in detail the neglect or failure complained of, and the Company shall have sixty days thereafter in which to comply with the conditions and requirements of this Ordinance. If at the end of such sixty-day period the City determines that the neglect or failure complained of has not been cured, the City shall take action to revoke and terminate this Ordinance by an affirmative vote of the governing body present at a public meeting and voting, setting out the grounds upon which this Ordinance is to be revoked and terminated; provided, to afford the Company due process, the Company shall first be provided reasonable notice of the date, time and location of the governing body’s consideration and shall have the right to address the governing body regarding such matter; and further provided, if the nature of the default is such that it cannot be reasonably cured within the above said sixty-day period, and the governing body believes the Company has in good faith timely commenced its cure and is diligently pursuing the completion of the same, the Company may, in the City’s sole discretion, be given a reasonable additional period of time to complete its cure. Nothing herein shall prevent either party from invoking any other remedy that may otherwise exist at law. Upon any determination by the governing body to revoke and terminate this Ordinance, the Company shall have thirty days to appeal such decision to the District Court where the City is located or in the District Court of Johnson County, Kansas. This Ordinance shall be deemed revoked and terminated at the end of this thirty-day period, unless the Company has instituted such an appeal. If the Company does timely institute such an appeal, such revocation and termination shall remain pending and subject to the court’s final judgment. Provided, however, that the failure of the Company to comply with any of the provisions of this Ordinance or the doing or causing to be done by the Company of anything prohibited by or in violation of the terms of this Ordinance shall not be a ground for the revocation or termination thereof when such act or omission on the part of the Company is due to any cause or delay beyond the control of the Company or to bona fide legal proceedings.
SECTION 10. RESERVATION OF RIGHTS.
In granting its consent hereunder, the City does not in any manner waive its regulatory or other rights and powers under and by virtue of the laws of the State of Kansas as the same may be amended, applicable Federal laws or regulations as the same may be amended, its home rule powers under the Constitution of the State of Kansas, nor any of its rights and powers under or by virtue of present or future ordinances of the City.
In adopting and passing this Ordinance, neither the City’s nor the Company’s present or future legal rights, positions, claims, assertions or arguments before any administrative agency or court of law are in any way prejudiced or waived. By the City’s adopting and passing this Ordinance and the Company’s acceptance hereof as provided in Section 11, neither the City nor the Company waive any rights, but instead expressly reserve any and all rights, remedies, and arguments the City or the Company may have at law or equity, without limitation, to argue, assert, and/or take any position as to the legality or appropriateness of any present or future laws, non-franchise ordinances and/or rulings.
SECTION 11. ACCEPTANCE OF TERMS.
This franchise Ordinance shall take effect and be in force from and after its passage, approval by the City, acceptance by the Company, and publication in the official City newspaper. The Company shall have sixty days after the final passage and approval of this franchise Ordinance to file with the City Clerk its written acceptance of the provisions, terms and conditions of this franchise Ordinance and when so accepted, this franchise Ordinance and acceptance shall constitute a contract between the City and the Company and such contract shall be deemed effective on the date Company files its acceptance with the City.
This franchise Ordinance, when accepted as provided above, (i) shall constitute the entire agreement between the City and the Company relating to this franchise, and the same shall supersede and cancel any prior understandings, agreements, or representations regarding the subject matter hereof, or involved in negotiations pertaining thereto, whether oral or written, (ii) shall be binding upon the parties, including their successors and assigns, and (iii) shall not be amended or further obligations imposed without mutual consent of the parties hereto.
SECTION 12. REOPENER PROVISION.
Upon written request of either the City or the Company, this Franchise may be reviewed once after five (5) years from the effective date of this ordinance, and once every (5) five years thereafter, to review the rate set forth in Section 3 above. Said request must be served upon the other party at least 120 days prior to the end of each period set forth above, and shall state specifically the amendment(s) desired. The City and the Company shall negotiate in good faith in an effort to agree upon mutually satisfactory amendment of the Franchise.
Upon written request of the Company, the franchise shall be reopened and renegotiated at any time upon a change in federal, state, or local law, regulation, or order which materially affects any rights or obligations of Company, including, but not limited to, the scope of the grant to the Company or the compensation to be paid to the City.
The franchise fee percentage rate set forth in Section 3 shall in no event exceed the percentage rate hereafter approved to calculate any fee paid to the City by any Entity for use of the Public Ways, if such fee is based in any way on the amount of revenues or gross receipts from the sale, transportation and/or distribution of natural gas or electric energy (excluding any municipally-owned electric utility) by such other Entity to customers within the City. If at any time after the effective date of this Ordinance, the fee or rate required to be paid by another utility distribution company is less than the percentage rate set forth in Section 3, then this Franchise shall become automatically subject to reopen upon notice by the Company for purposes of negotiation of a new lower franchise percentage rate.
SECTION 13. NOTICE OF ANNEXATION.
The City shall promptly notify the Company in writing (to include a map) of areas newly annexed into or deannexed from the corporate limits of the City, and the Company shall update its records for the purpose of payment of franchise fees as soon as reasonably practicable after receiving such notice. Notwithstanding anything to the contrary in this Ordinance, the fees provided for in Section 3 above shall not become effective within any area annexed by the City until the beginning of the monthly billing cycle which begins no more than sixty days after the date that the City provides the Company with a certified copy of the annexation ordinance, proof of publication as required by law and a map of the City detailing the annexed area.
SECTION 14. RELEVANT LAW.
The franchise is granted pursuant to the provisions of K.S.A. 12-2001 and amendments thereto. Any and all ordinances or parts of ordinances in conflict with the terms hereof are hereby repealed or considered as having no effect as of the first cycle of the monthly billing cycle as referenced in Section 3 of this ordinance.
SECTION 15. TRANSFER AND ASSIGNMENT.
Company shall not have the right to assign, sell, lease, or otherwise transfer in any manner whatsoever to any third party not affiliated with Company the rights and privileges granted under this Ordinance except as hereinafter provided. Any assignment, sale, lease, or other transfer by the Company of the franchise granted herein to any third party not affiliated with Company shall be ineffective and void unless:
SECTION 16. POINT OF CONTACT AND NOTICES.
Company shall at all times maintain with the City a local point of contact who shall be available at all times to act on behalf of Company in the event of an emergency. Company shall provide the City with said local contact’s name, address, telephone number, fax number and e-mail address. Emergency notice by either party to the other may be made by telephone to the City’s designee as listed below. All other notices between the parties shall be in writing and shall be made by personal delivery, depositing such notice in the U.S. Mail, Certified Mail (return receipt requested), or via the email addresses provided below. Any notice served by U.S. Mail or Certified Mail (return receipt requested) shall be deemed delivered upon actual receipt unless otherwise provided. Other than emergencies, notices to the parties shall be to the following:
| The City: | Company: |
|---|---|
| The City of Concordia Attn: City Clerk 701 Washington Concordia, Kansas 66901 Phone: 785-243-2670 Fax: 785-243-3328 Email: cityclerk@concordiaks.org | Kansas Gas Service, a Div. of ONE Gas, Inc. Attn: Legal Department 7421 W. 129th Street Overland Park, KS 66213-2713 Phone: (913) 319-8619 Fax: N/A Email: kgsfranchises@onegas.com |
| Emergency Contact Information: | |
| Emergency Designee: Jeremy Arnold | Natural Gas Emergency No: 888-492-4950 |
| Emergency Contact No.: 785-275-1342 | Local Contact Name.: Robert Baker |
| Emergency Email: utilitiesdirector@concordiaks.org | Emergency Contact Email: Robert.Baker@onegas.com |
(or to replacement addresses that may be later designated in writing).
SECTION 17. AGREEMENT TO RENEGOTIATE.
Should the Kansas Corporation Commission take any action with respect to this franchise Ordinance and any amendment thereto which precludes Company from recovering from its customers any costs or fees provided for hereunder, the parties hereto shall renegotiate this franchise Ordinance in accordance with or to conform to the Commission’s ruling.
(Ord. 2021-3172)