Submitted By: William E. Sexton, City Attorney
Presentation By: William E. Sexton
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Department: City Attorney
FORMAL TITLE:
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Ordinance 2027-3 representing a franchise fee agreement with Peoples Gas System, a Division of Tampa Electric Company, which grants a non-exclusive franchise to use the public rights-of-way of the City of Ocala for the construction, maintenance, and operation of a natural gas distribution system
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OCALA’S RELEVANT STRATEGIC GOALS:
Quality of Place
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
In or about September of 2012, the City of Ocala entered into a franchise fee agreement with Peoples Gas System, a Division of Tampa Electric Company (TECO) through the adoption of Ordinance 2012-51 (attached as Exhibit 1).
At all times since then, both the City of Ocala and TECO have operated in compliance with the terms and conditions of the franchise fee agreement contained within Ordinance 2012-51, including the period of time following the expiration of that agreement.
As a result of said franchise fee agreement, the City of Ocala receives approximately $622,000 per year in General Fund revenue.
TECO and the City of Ocala now desire to enter into a new, revised franchise fee agreement which, although updated, contains approximately the same terms and conditions as the 2012 agreement.
FINDINGS AND CONCLUSIONS:
The City Council of the City of Ocala, Florida finds and concludes that entry into a franchise fee agreement with Peoples Gas System, a Division of Tampa Electric Company, for the construction, maintenance, and operation of a natural gas distribution system within the rights-of-way of the City of Ocala has a public purpose, supports the health, safety, and welfare of and is in the best interest of the citizens of the City of Ocala, Florida.
FISCAL IMPACT:
Entry into this franchise fee agreement (through adoption of this Ordinance) will allow the City of Ocala to continue generating approximately $622,000 per year in General Fund revenue. Said revenue will be applied to Account 001-323-000-000-26-32340.
PROCUREMENT REVIEW:
N/A
LEGAL REVIEW:
The City Attorney’s Office drafted, reviewed, and approved this ordinance for form and legality.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny
ORDINANCE NUMBER 2027 - 3
AN ORDINANCE OF THE CITY OF OCALA, FLORIDA REPRESENTING A FRANCHISE AGREEMENT WITH AND GRANTING TO PEOPLES GAS SYSTEM, A DIVISION OF TAMPA ELECTRIC COMPANY, A NON-EXCLUSIVE FRANCHISE TO USE THE PUBLIC RIGHTS-OF-WAY OF THE CITY OF OCALA, FLORIDA FOR THE CONSTRUCTION, MAINTENANCE AND OPERATION OF A NATURAL GAS DISTRIBUTION SYSTEM IN THE CITY OF OCALA, FLORIDA; PROVIDING FOR AND DESCRIBING THE TERMS AND CONDITIONS UNDER WHICH SAID NON-EXCLUSIVE RIGHTS, PRIVILEGES AND FRANCHISE MAY BE EXERCISED; PROVIDING DIRECTION TO STAFF; PROVIDING DIRECTION TO THE CODIFIER; REPEALING INCONSISTENT AND/OR CONFLICTING PROVISONS; PROVIDING FOR SEVERABILITY OF ORDINANCE PROVISIONS; PROVIDING FOR MODIFICATIONS ARISING FROM CONSIDERATION AT A PUBLIC HEARING; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Ocala, Florida exercises control over all publicly dedicated rights-of-way located within the corporate limits of the City of Ocala, Florida; and
WHEREAS, the City of Ocala will franchise, on a non-exclusive basis, the use of its rights- of-way for natural gas service providers provided the natural gas service provider abides by the terms of this ordinance and pays in a prompt manner all fees and other consideration required herein; and
WHEREAS, Peoples Gas System, a Division of Tampa Electric Company, a Florida corporation wishes to provide for the local distribution of natural gas as provided in the franchise fee agreement contained in this ordnance; and
WHEREAS, the Peoples Gas System has requested permission from the City of Ocala, Florida to construct, maintain and operate its natural gas system within the aforesaid rights-of-way to provide the aforesaid services; and
WHEREAS, the aforesaid rights-of-way to be used by the Company are valuable public properties acquired and/or maintained by the City at great expense to the City's taxpayers, and the right to use said rights-of-way is a valuable property right; and
WHEREAS, the City desires to ensure that the aforesaid rights-of-way used by the Company are promptly restored to a safe and secure condition to protect the health, safety and welfare of the City's citizens; and
WHEREAS, on or about September 18, 2012, the City of Ocala, Florida and Peoples Gas System entered into a franchise agreement which was approved and codified by the City of Ocala, Florida with Ordinance 2012-51, said agreement being for a period of ten (10) years; and
WHEREAS, notwithstanding the expiration of the aforementioned agreement codified by Ordinance 2012-51, the parties have continued to comply with their obligations thereunder; and
WHEREAS, the City of Ocala, Florida and Peoples Gas System now desire to enter into a new, revised franchise agreement for a period of thirty (30) years commencing from the date provided herein; and
WHEREAS, the City Council of the City of Ocala, Florida finds and determines that this ordinance and entry into the new, revised franchise fee agreement with Peoples Gas System contained herein further the protection of the health, safety, and welfare of the citizens of Ocala, Florida; and
WHEREAS, the City Council of the City of Ocala, Florida finds and determines that this ordinance and entry into the new, revised franchise fee agreement with Peoples Gas System contained herein are in the best interest of the City of Ocala, Florida and its citizens; and
NOW THEREFORE, be it ordained by the City Council of the City of Ocala, Florida, in regular session, as follows:
Section 1. Ratification, Adoption and Incorporation of Recitals.
The City Council of the City of Ocala, Florida, ratifies the above-outlined recitals as true and correct; adopts and incorporates them herein as part and parcel of this ordinance.
Section 2. Purpose and Authority for Ordinance.
This ordinance is adopted for the purpose of outlining the terms and conditions of the relationship between the City of Ocala, Florida, and Peoples Gas System, a Division of Tampa Electric Company with respect to the grant of a franchise by the City of Ocala, Florida and is adopted pursuant to the authority granted by Chapter 166, Florida Statutes, Chapter 180, Florida Statutes, Chapter 337, Florida Statutes, and other relevant provisions of Florida and federal law.
Section 3. Definitions for Terms.
For the purposes of this Ordinance, the following terms shall have the meanings given herein:
A. Agreement shall mean this instrument, which is an agreement between the City of Ocala, Florida and Peoples Gas System, executed by representatives of both parties, and adopted by the City Council of the City of Ocala, Florida as part and parcel of this ordinance, in accordance with the requirements of the Code of Ordinances, City of Ocala, Florida and Florida law. For purposes of this instrument, the terms Ordinance and Agreement may be utilized interchangeably herein.
B. Customer shall mean a purchaser of Gas or Natural Gas or any person or entity that pays to Company any consideration for the distribution or delivery of Gas or Natural Gas within Company's system.
C. City shall mean the City of Ocala, Florida, a municipal corporation organized and existing under the laws of the State of Florida.
D. Company shall mean Peoples Gas System, a division of Tampa Electric Company (sometimes hereinafter referred to as TECO), a Florida corporation, and any permitted successors and assigns.
E. Facilities and/or equipment shall mean pipe, pipeline, tube, main, service, trap, vent, vault, manhole, meter, gauge, regulator, valve, conduit, appliance, attachment, structure or structures, and appurtenances used or useful in the distribution of Gas, located or to be located in, upon, along, across, or under the streets.
F. Franchise Agreement shall mean this Ordinance as adopted by the City and accepted by the Company.
G. FPSC shall mean the Florida Public Service Commission or any successor agency.
H. Gas and/or Natural Gas shall mean natural gas and/or manufactured gas and/or a mixture of gases that are distributed in pipes and measured by meter on the Customer's premise. It shall not mean propane gas or liquefied petroleum gas (commonly referred to as "bottled gas").
I. Gross Revenues shall mean all revenues received by the Company from any Customer, within the corporate limits of the City from the sale, distribution or delivery of Gas, including, without limitation: FLEX Rate Revenues, PGA Revenues, ECCR Revenues, Regulatory Assessment Fees and Gross Receipts Taxes. Gross Revenues shall not include Sales Tax Collection Allowances, Unbilled Revenues, Sales Taxes or Municipal Utility Taxes.
J. Ordinance shall mean this ordinance adopted by the City Council of the City of Ocala, Florida in accordance with the requirements of the Code of Ordinances, City of Ocala, Florida and Florida law. For purposes of this instrument, the terms Ordinance and Agreement may be utilized interchangeably herein.
K. Person means any person, firm, partnership, association, corporation, company or organization of any kind.
L. Public rights-of-way or City's rights-of-way mean the streets, alleys, highways, waterways, bridges, sidewalks, easements and other ways or places of whatever nature, publicly held or dedicated for public use and presently opened or to be opened to public use for vehicular or pedestrian movement, to include the space at, or below the right-of-way.
M. Distribution System or System shall mean any and all transmission pipelines, main pipelines and Customer pipelines, together with all necessary and desirable appurtenances as may be reasonably necessary for the sale and distribution of Natural Gas for the public and private use of Customers within the corporate limits of the City.
Section 4. Grant of Non-Exclusive Franchise to TECO.
The City of Ocala, Florida hereby grants to TECO the non-exclusive right, privilege and franchise to lay, erect, construct, operate and maintain in, on, or upon any and all of the public rights-of-way of the City, as they now exist or may be hereafter constructed, opened, laid out or extended within the present incorporated limits of the City, or as otherwise limited by law, or in such territory as may be hereafter added to, consolidated or annexed to the City, any and all such pipes, conduits, supports and other structures and appurtenances as may be reasonably necessary for the construction, maintenance and operation of a natural gas system (hereinafter referred to as the "System") to be used by TECO to provide for the transport of natural gas within the City Limits, subject to the terms, conditions and exceptions contained herein.
Section 5. Condition of Non-Exclusive Franchise.
The non-exclusive Franchise granted by the City of Ocala, Florida to TECO is conditioned upon the agreement by TECO to fully and completely comply with and satisfy any and all agreements by TECO contained within this Agreement, which are part and parcel of this Ordinance.
Section 6. Term of Grant of Non-Exclusive Franchise.
The non-exclusive Franchise granted by the City of Ocala, Florida to TECO shall be for a period of thirty (30) years from the effective date of this ordinance and, if the terms and conditions of this ordinance are not accepted in writing by TECO within sixty (60) calendar days after its final passage by City Council of the City of Ocala, Florida, then this Ordinance shall become null and void in its entirety.
Section 7. Limitations on Grant of Non-Exclusive Franchise.
To the extent consistent with applicable federal and Florida law, TECO hereby agrees to abide by all the rules and regulations and ordinances which the City has passed or might pass in the future, and further agrees to abide by any established policy which the City or its duly authorized representative has passed, established, or will establish; provided, however, it is not intended hereby that the City shall have the right of breaching the terms of this Franchise Agreement.
Section 8. Renewal of Grant of Non-Exclusive Franchise.
A. The non-exclusive Franchise granted by the City of Ocala, Florida to TECO shall automatically renew for a six (6) month period for the purpose of negotiation of a new franchise in accordance with then existing law.
B. During said six (6) month renewal period:
i. City and TECO shall negotiate in good faith in an effort to enter into a new Agreement;
ii. City and TECO will continue to abide by the terms of this Agreement, including payment of the franchise fee
C. Should no new franchise be negotiated, City shall be entitled to exercise any and all legal remedies available to it to remedy any holdover and use of the City’s rights-of-way.
D. Failure of the City to exercise a right or require a new franchise shall not be deemed to constitute a waiver of any rights the City may have. Should Company holdover without a new franchise, City shall be entitled to the payment of a holdover franchise fee equal to the greater of: the franchise fee due under this franchise as if it had continued in effect; or if any provision of Florida Statutes or Florida Administrative Code has established a default franchise fee (or method of calculating fee) to be paid by natural gas utilities in the absence of a franchise agreement, such default franchise fee (or method of calculating fee); provided, however, such default franchise fee (or method of calculating fee) shall not apply if the Florida Statutes or Florida Administrative Code from which it is drawn imposes other terms or conditions on Company that are materially different from the terms of this Agreement.
Section 9. Elements of Franchise Fee.
A. Commencing on the effective date of this Ordinance, the Company shall pay within thirty (30) days after the close of each month following the effective date of this Franchise Agreement, to the City as consideration for the grant of this Franchise, a sum of money equal to six (6%) percent of its gross revenues received from the sale, distribution or delivery of natural gas during each previous month from services provided within the City Limits by the Company.
B. Within thirty (30) calendar days after the close of each previous pay period, the Company shall pay the franchise fee as provided in Section 9 A. and file, with the City's Chief Financial Officer, a statement, signed and certified by an authorized accounting or financial representative of the Company, of the gross revenues derived in the preceding month. Acceptance of any franchise fee payment shall not be deemed a waiver or release of any claims the City may have for additional sums, nor be construed as an accord that the amount paid is correct.
C. If such consideration is not received by the City within such period, the Company shall pay interest on any such unpaid portion thereof at the rate of eighteen percent (18%) per annum from the first day thereafter until paid to the City, and the Company shall reimburse the City for the actual and reasonable out of pocket costs of the City associated with collecting any sums of money the Company is required to remit to the City pursuant to this Ordinance.
D. The sums of money to be paid by the Company to the City under this franchise agreement are compensation and consideration for the use by the Company of the City's rights-of-way for the construction, maintenance and operation of the System and are not taxes, as allowed by the Florida Constitution, the general or special laws of the State of Florida or any other ordinances of the City. The Company shall at all times continue to be subject to such other taxes, charges, fees or assessments as may be lawfully authorized by the Florida Constitution, the general or special laws of the State of Florida, and the provisions of the Municipal Home Rule Powers Act (Chapter 166, Florida Statutes) or the ordinances of the City.
E. Upon request by the City, or its designated representative, the Company, and its agents and outside contractors shall within thirty (30) days, make available for examination by the City or its authorized representative or agent, during normal business hours, the books, records and accounts and other documentation of the Company (hereinafter collectively referred to as the "Reports") that, as determined by the City, are reasonably necessary to determine the accuracy of the gross revenues reported upon which the franchise fee payment is based, and shall permit the City, or its authorized representative or agent, to make and remove copies of the Reports, including computer printouts or other data of customer billings. In the event the Reports are not available to the City for examination in the City Limits, the Company shall reimburse the City for the reasonable travel expense of the City's representative resulting from said representative's travel to the location where the Reports are maintained and shall permit the City to make and remove copies of the Reports, including computer printouts or other data of customer billings. Upon request by the City, or its designated representative, the Company shall provide a copy of any annual report filed with the FPSC. The City, or its designated representative, shall have the right during the life of this Franchise to examine the Reports; provided, however, that the Company shall be obligated to maintain its billing records only for the period of time required by the FPSC (or its successor agency, or, in the event the Company is no longer subject to the jurisdiction of the FPSC for the period of time previously required by the FPSC) and that any examination conducted after such period shall be confined to the billing records then available. Regardless of the proceeding, however, the billing records shall be maintained for at least four years. No later than thirty (30) days after the request of the City, or its representative, the Company shall supply to the City a copy of the Reports. Such copy shall be in the media requested by the City provided that it is economical and practical for the Company to do so; however, in no event shall paper copies of requested documentation be deemed uneconomical or impractical. The City agrees to keep all documentation and reports confidential, except as otherwise provided by Florida law.
F. The City reserves the right, without limitation, to conduct any necessary financial audits relating to computation and collection of the franchise fee and all fees owed pursuant to this agreement. Any such audit shall be conducted in accordance with generally accepted audit standards. Company shall pay to the City any undisputed amounts that are due to the City as determined by any audit of the system. Such payment shall be made whether or not the Company's obligation for such payment arose before or after the effective date of this franchise. If the City, as a result of any audit, determines that the Company made any underpayment, and that the underpayment exceeded in percent of the amount due, Company shall reimburse the City for the reasonable costs of such audit, upon receipt of an invoice from the City showing such costs were actually incurred directly or indirectly related to the audit.
Section 10. Use of Rights-of-Way; Construction Requirements; Alteration of the System; and Access.
A. Permits.
Prior to the installation, placement or removal of any facilities or equipment, or the start of any other type of construction on the City's rights-of-way, the Company shall, pursuant to the requirements of existing or subsequently enacted City ordinances, obtain all permits from, and pay all fees to, the City. Said permits shall set out the place, date and time where the facilities or equipment, or other form of construction, are to be installed, or removed or where the construction is to be conducted. All permit applications submitted by the Company shall contain plans showing known utility facilities and specifications prepared by a qualified engineer/technician, and letters of no conflict as provided by other utilities having facilities located where the Company desires to place its facilities or equipment or begin construction. The City shall issue, or if applicable deny, permits within ten (10) business days of application by the Company. The Company may include, in its permit applications the following language (modified to include the number of this Ordinance) on the top of the first page of its applications and in type at least one-half inch in height:
THIS APPLICATION WILL BE DEEMED GRANTED IF THE CITY DOES NOT RESPOND TO IT WITHIN TEN DAYS AFTER THE CITY'S RECEIPT THEREOF.
If the permit application contains such language, the permit application shall be deemed granted if the City fails to respond to the application within ten days after the City's receipt thereof. The
Company will not assert the existence of any vested rights if the City issues a permit. Further, issuance of a permit by the City shall not be construed by the Company as a warranty that the
placement by the Company of its facilities or equipment, or the start of construction, is in compliance with any applicable rules, regulations or laws.
B. Construction Subject to City Codes and Other Applicable Regulations.
All such components of the Distribution System of the Company located within the City shall be installed and maintained in accordance with the orders, rules, and regulations of the FPSC, the Florida Department of Transportation, other governmental agencies with jurisdiction, and, to the extent consistent with the foregoing, subject to all applicable rules, regulations and specifications contained in the City Code. In the event of conflict, the City Code shall constitute the minimum construction standards required.
Any type of construction or placement of facilities or equipment proposed by the Company shall be subject to the City Code and other regulations of the City pertaining thereto and shall be performed with the least interference reasonably possible with the use of the Public rights-of-way and to adjoining property owners.
C. The Company may make repairs to its facilities during emergency situations without first obtaining a City permit. However, the Company will file for the applicable permit within five (5) business days following completion of the emergency activity.
D. Nonpermitted Equipment.
If the City discovers that any facilities or equipment have been installed or placed by the Company without the Company first having obtained the permits required hereunder, City shall so advise the Company and the Company shall have 10 days from its receipt of such notice to obtain permits for such facilities or equipment. If the Company fails to obtain the permits within such time period, it shall, unless it is precluded from doing so by applicable law (including regulations of the FPSC) remove the nonpermitted facilities or equipment within 30 days written notice from City to remove the same and, if it fails to do so, the City may remove such facilities or equipment and the costs of removal shall be borne and paid by the Company.
E. Street closure. In the event that work to be conducted by the Company requires streets or traffic lanes to be closed or obstructed, the Company shall, pursuant to the requirements of existing or subsequently enacted City ordinances, obtain all permits from and pay all fees therefore to the City, and shall obtain approval of its maintenance-of-traffic plan from the City's Traffic Engineer.
F. Tree Removal.
In the event the Company deems the removal of any trees reasonably necessary to construct any portion of the System and to maintain the integrity and safety of the same it shall, pursuant to the requirements of existing or subsequently enacted City ordinances, at Company's expense, obtain all applicable permits from, and pay all applicable fees to, the City, and comply with all other requirements of said ordinances.
G. Obstruction of City-Owned Parking.
In the event the Company's work requires the obstruction of City owned, metered parking spaces, the Company shall obtain City approval, which shall not be unreasonably withheld, and pay a fee if required to the City as prescribed in any existing or subsequently enacted City Ordinance.
H. Utilization of Underground Facilities.
To the maximum extent practicable, all facilities or equipment shall be constructed underground. All underground utilities shall be installed in strict accordance with the City of Ocala Engineering Department's policies and regulations for location within and restoration of the City rights-of-way. The Company shall comply with the standards set forth in the City of Ocala Engineering Department's policies and regulations prospectively for any future construction within the City's rights-of-way, as such standards, in whole or in part, may be amended from time to time.
I. Protection of Water and Sewer Facilities.
The Company shall not, without the consent of the City, intentionally displace, damage or destroy any sewer, water main, pipe or any other facilities belonging to the City or to any third party who placed such facilities therein by express authority of the City. The Company shall be liable to the City or to the third party owner, as the case may be, for the cost of any repairs made necessary by any displacement, damage or destruction by the Company and shall pay such costs upon demand.
J. Duty to Repair Damaged Facilities and Rights-of-Way.
The Company shall, at its own cost, replace and repair without delay any of the City's rights-of-way that has been excavated, broken, removed, displaced or disarranged by the Company in the conduct of its construction, maintenance and operation of any portion of the System, or as a result of the deterioration of any portion of the System, and restore the same to as good a condition as it existed prior to the Company commencing its work, and upon failure of the Company to do so after twenty (20) days written notice by the City Engineer, the City may make such repairs and replacements as it deems reasonably necessary, and the Company shall pay the City all reasonable costs of such repairs and replacements. The Company shall, to the satisfaction of the City Engineer, maintain any repairs it makes pursuant to Section IV for a period of one (1) year following the date of such repair
K. Use of Reasonable Care.
The Company shall use all proper and reasonable care in connection with any work that it may do in, over, under and across any Public rights-of-way of the City in seeking to prevent harm, damage or injury to persons or property therefrom.
L. “As Built” Plans to be Provided.
The Company shall produce and maintain a complete set of "as built" plans, including, but not limited to, horizontal and vertical profiles, within forty-five (45) days after construction of any portion of the System; comply with all applicable laws, regulations and codes promulgated for the protection of the public, including, but not limited to, the FPSC, the Florida Department of Transportation, and to the extent consistent, the City of Ocala's Codes and regulations for location within and restoration of the City rights-of-way and such other design or regulatory manuals which regulate the installation of structures within Public rights-of-way. Upon request, the Company shall make said plans available to the City within sixty (60) days after construction of any portion of the System and become a member of and maintain membership in a utility notification one call system.
M. Relocation of Facilities.
Except in an emergency, the Company shall, within one hundred eighty (180) days after receipt of written notice from the City, adjust; alter or relocate, at its own cost and expense, any portion of the System in the event the City, at the direction of the City Engineer, determines that such adjustment, alteration or relocation is necessary for the City's use of its property and rights-of-way, or if same unreasonably interferes with the convenient, safe or continuous use, or the maintenance, improvement, extension or expansion of any Public rights-of-way in the City. In the event such adjustment, alteration or relocation is incidental to work to be done by the City on a City road, such notice shall be given sixty (60) days prior to the commencement of such work by the City. In the event such a contingency occurs and the Company fails to cause the aforementioned adjustment, alteration or relocation as required herein, the City may remove such portion of the System, and the total reasonable cost and expense therefore shall be charged to the Company. The City shall provide the Company with a notice and order as provided for in Section 337.404, Florida Statutes, or any subsequently enacted law of the State of Florida, in the event it may charge the Company for the reasonable cost and expense of removing such portion of the System pursuant to this Ordinance.
N. Reimbursement by Third Parties.
In the event the City requires the Company to adapt or conform any portion of the System, or in any way to alter, temporarily or permanently relocate or to change any portion of same to enable any other person to use any Public rights-of-way of the City, the Company shall be reimbursed by the person desiring or occasioning such change for any loss, cost or expense caused by or arising out of such change, alteration or relocation of any portion of the System. In addition, if the Company requests and is the beneficiary of the City requiring any other companies to change, alter or relocate their respective system so as to enable the Company to use the Public rights-of-way, then the Company shall reimburse such other companies for any loss, cost or expense caused by or arising out of such change, alteration or relocation.
O. Emergency Repairs.
In an emergency, as determined by the City, when the Company or its representative is immediately unavailable or unable to provide the necessary immediate repairs to any portion of the System that is damaged or malfunctioning or to any faults or settled or sunken areas that may develop in any area over, around or adjacent to same, the City, when apprised of such an emergency, shall have the right to make the repairs with the total reasonable cost of same being charged to the Company, when deemed by the City, in its sole discretion, to be in the best interest of the health, safety or welfare of the public.
P. Access to Manholes.
The City shall have access at all times to any manholes of the Company in which the City has facilities. The City, in the proper exercise of its municipal powers and duties with respect to its Public rights-of-way, shall have access to all manholes of the Company in the City's rights-of-way where it does not have facilities, provided the City has given the Company reasonable prior notice so that the Company can have trained Company personnel present when the City accesses any such manholes. In cases of emergency the City shall not be required to give notice. Company shall have access to City manholes in which it has facilities, provided Company gives City reasonable prior notice to the City so that City can have trained personnel present, if necessary, when Company makes access to any such manholes.
Q. Exercise of Police Power.
In accepting this franchise, the Company acknowledges that at all times during the term of this Franchise, its rights shall be subject to a lawful exercise of the police power by the City, and to such reasonable regulation of its Public rights-of-way as the City shall hereafter by resolution or ordinance provide in the interest of the health, safety and welfare of the public. Any inconsistency or ambiguity between the provisions of this Ordinance and any lawful exercise of the City's police power shall be resolved in favor of the latter.
R. Safe Operation of System.
The Company shall maintain and operate all parts of the system in good, safe and operable condition and shall render efficient service in accordance with the rules and regulations as are, or may be, set forth by the FPSC, or by other agencies of the state lawfully empowered to regulate the activities of the Company.
Section 11. No Assignment of Franchise.
A. No Assignment of Franchise.
The Franchise hereby granted shall not be leased, assigned or otherwise alienated or disposed of except with the prior express written consent of the City Council of the City, which shall not be unreasonably withheld or unduly delayed. No assignment shall be allowed without the assignee assuming the terms of the Franchise Agreement with the City of Ocala.
B. Exception to Restriction on Assignment.
Notwithstanding the foregoing, the Company may lease, assign or otherwise alienate and transfer this Franchise in connection with the lease or sale of the System or upon its merger and consolidation with, or transfer to any other corporation engaged in a similar business (including any affiliate or subsidiary of the Company), or pledge or mortgage such Franchise in connection with the physical-property owned and used by it in the operation of the System for the purpose of securing payment of monies borrowed by the Company without the express consent of the City Council of the City.
However, any such transfer shall only become effective upon payment of all outstanding fees or other amounts due to the City and the acceptance and assumption of all duties; obligations and liabilities by the transferee.
Section 12. Requirements for Insurance.
A. Mandatory Requirement for Insurance.
During the life of this Franchise the Company shall provide, pay for and maintain satisfactory to the City the types of insurance described herein. All insurance shall be from responsible companies duly authorized to. do business in the State of Florida and having a financial rating in Best's Insurance Guide of B+ Class VI or better and a claims paying ability rating of A+ or better. All liability policies shall provide that the City is an additional insured as to liabilities arising out of this Franchise. The required coverages must be evidenced by properly executed Certificates of Insurance forms. The Certificates must be signed by the authorized representative of the insurance company. Thirty (30) days advanced written notice by registered or certified mail must be given to the City of any cancellation, intent not to renew or reduction in the policy coverages. The Certificate of Insurance must indicate the City as an additional insured as to liabilities arising out of this Franchise.
B. Limits for Insurance Coverage.
The limits for coverage of insurance required shall be not less than the following:
i. Worker's Compensation and Employer's and Liability Insurance.
Worker’s Compensation insurance shall be provided by the Company as required by Chapter 440, Florida Statutes, or any other applicable state or federal law, including the U.S. Longshoremen’s and Harbor Workers Compensation Act and the Jones Act.
(a) The Company shall similarly require any and all subcontractors to afford such coverage for all of its employees as required by applicable law.
(b) The Company shall waive and shall ensure that the Company’s insurance carrier waives, all subrogation rights against the City of Ocala and its officers, employees, and volunteers for all losses or damages. The Company’s policy shall be endorsed with WC 00 03 13 Waiver of our Right to Recover from Others or its equivalent.
(c) Exceptions and exemptions to this Section may be allowed at the discretion of the City’s Risk Manager on a case-by-basis in accordance with Florida Statutes and shall be evidenced by a separate waiver.
ii. General Liability Insurance.
The Company shall procure, maintain, and keep in full force, effect, and good standing for the life of the contract a policy of Commercial General Liability insurance with limits not less than:
(a) One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate (or project aggregate, if a construction project) for bodily injury, property damage, and personal and advertising injury; and
(b) One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate (or project aggregate, if a construction project) for products and completed operations.
(c) Policy must include coverage for contractual liability and independent contractors.
(d) Policy must include Additional Insured coverage in favor of the City that is no less restrictive than that afforded under the CG 20 26 04 13 Additional Insured Form.
iii. Automobile Liability Insurance.
The Company shall procure, maintain, and keep in full force, effect, and good standing for the life of the contract a policy of Commercial Auto Liability insurance with a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence for Bodily Injury and Property Damage arising out of the Company’s operations and covering all owned, leased, hired, scheduled, and non-owned automobiles utilized in said operations. If the Company does not own vehicles, the Company shall maintain coverage for hired and non-owned automobile liability, which may be satisfied by way of endorsement to the Company’s Commercial General Liability policy or separate Commercial Automobile Liability policy.
C. Compliance with Insurance Requirements.
The Company may meet these minimum coverage limits through any combination of primary, excess or seif-insured (provided such self-insurance does not exceed $1,000,000.00) liability insurance coverage.
Section 13. Provision for Indemnification.
A. The Company shall indemnify and hold the City and its officers, directors, agents, servants, employees, successors, and assigns harmless of and from any and all claims for personal injury, death or property damage, any other losses, damages, charges or expenses, including attorneys' fees, witness fees, court costs and the reasonable value of any services rendered by any officer or employee of the City, and any orders judgments or decrees which may be entered which arise or are alleged to have arisen out of, in connection with or attributable to, the Company's negligent acts or omissions under this Franchise and the negligent placement, repair, relocation or removal by the Company, its agents or contractors of any portion of the Distribution System, excepting only those claims resulting from the negligence of the City. The Company shall undertake at its own expense the defense of any action which may be brought against the City for damages, injunctive relief or for any other cause of action arising or alleged to have arisen out of, in connection with or attributable to, the foregoing and, in the event any final judgment therein should be rendered against the City resulting from the foregoing, the Company shall promptly pay the final judgment together with all costs relating thereto; the Company being allowed, however, an appeal or appeals to the appropriate court or courts from the judgment rendered in any such suit or action upon the filing of such supersedes bond as shall be required to prevent levy or judgment against the City during such appeal(s).
B. Nothing in this Franchise Agreement shall be construed to affect in any way the City's rights, privileges and immunities under the doctrine of “sovereign immunity" as set forth in Section 768.28 Florida Statutes.
Section 14. Termination of Franchise.
In the event the Company (i) materially violates any of the material provisions of this Ordinance, unless such violation results from a cause beyond the Company's control, (ii) shall cease to operate the System within the City for any consecutive period of 180 days during the life of this Franchise, except for causes beyond the Company's control, or (iii) is precluded by governmental authority from charging the franchise fee provided in this Ordinance to its customers and it provides the City with written notice of its desire to terminate this Franchise, then the City, at its option, may forthwith declare a termination of, and revoke and cancel all rights granted under, this Franchise, provided that, prior to such termination by the City resulting from a violation by the Company of any of the provisions of this Ordinance, the Company shall be served by the City with a written notice setting forth all matters pertinent to such violation, and describing the action of the City with respect thereto. The Company shall have sixty (60) days after service of such notice within which to cure the violation, or within which to present a plan, satisfactory to the City, to accomplish the same. If the Company fails to do so within such time period, the City may terminate this Franchise.
Section 15. Compliance with State and Federal Laws and Local Ordinances.
Notwithstanding any other provision of this Franchise to the contrary, the Company shall at all times comply with all laws, rules and regulations of the State of Florida and the federal government and any administrative agencies thereof and, to the extent consistent with the foregoing, with all laws, rules and regulations of the City of Ocala. If any state or federal law, rule or regulation shall require or permit t11e Company to perform any service, prohibit the Company from performing a service in conflict with the provisions of this Franchise or affect, in any way, the provision of services provided by the Company, then, promptly following knowledge thereof, the Company shall notify the City in writing of the point of conflict believed to exist between such state or federal law, rule or regulation and this Franchise or any ordinance, rule, regulation or charter provision of the City. If the City determines that a material provision of this Franchise does in fact conflict with such law, rule or regulation, ii shall have the right to seek an amendment of this Franchise to carry out the full intent and purpose of this Franchise.
Section 16. Failure to Enforce Franchise.
The Company shall not be excused from complying with any of the terms and conditions of this
Ordinance by any failure of the City, upon any one or more occasions, to require the Company's
performance or compliance with any one or more of such terms or conditions.
Section 17. Severability of Agreement Provisions.
If any section, phrase, sentence or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, it is the intent of the City Council of the City of Ocala, Florida that (1) such portion shall be deemed a separate, distinct and independent provision; (2) such holding shall not affect the validity of the remaining portions hereof; and (3) this ordinance be adopted as though any such provision was not included herein.
Section 18. Statement regarding Section Headings.
All headings in this Ordinance are inserted for convenience only and shall not affect the construction or interpretation of this Ordinance.
Section 19. Effective Date and Acceptance of Franchise.
This Ordinance shall take effect immediately upon its passage and enactment into law, provided that the Company shall have signified its acceptance of the Franchise hereby granted (in writing or as provided on the last page hereto) within sixty (60) calendar days from the date this Ordinance was duly enacted by the City Council of the City of Ocala.
Section 20. Provision for Default and Assessment of Attorney's Fees.
If either party defaults on its obligations under this franchise, the other party shall have the right to institute legal proceedings to collect damages or to exercise any other rights and remedies afforded in law or equity. The prevailing party shall be entitled to an award of its costs and attorneys' fees resulting from any action to enforce the franchise. In no event, however, shall City be liable for damages in excess of its sovereign immunity limits set by Section 768, Florida Statutes, or as subsequently amended, nor shall this franchise be deemed a waiver of any of the City's sovereign immunity rights granted by law.
Section 21. Governing Law for Franchise.
This franchise shall be governed by the laws of the State of Florida and applicable federal law.
Section 22. Entirety of Agreement.
This ordinance represents the entire understanding and agreement between the parties. All prior oral negotiations and representations are hereby superseded. This ordinance can only be amended in
writing upon the authority of the City Council of the City of Ocala pursuant to in accordance with ordinance amendment procedures.
Section 23. Venue and Jurisdiction for Disputes arising Hereunder.
Venue and jurisdiction for any action concerning this franchise or this ordinance shall be in the Circuit Court in and for Marion County, Florida.
Section 24. Reservation of Rights.
Both the Company and the City reserve and may seek any and all remedies at law and equity. Neither the City nor the Company shall be deemed to have waived any rights or remedies at law or equity by virtue of executing this ordinance. In no event, however, shall City be liable for damages in excess of its sovereign immunity limits set by Section 768, Florida Statutes, or as subsequently amended, nor shall this franchise be deemed a waiver of any of the City's sovereign immunity rights granted by law.
Section 25. Preemption by State of Federal Law.
To the extent that this franchise is preempted by future Federal or State legislative changes, it is only preempted to the extent of the actual conflict between this franchise and the requirements of the State or Federal law. All provisions of this franchise that are not in conflict shall remain in full force and effect.
Section 26. Parity of Franchise.
A. If, during the term of this Franchise Agreement, the City, by franchise agreement or ordinance, allows other gas providers, gas consumers or gas transporters ("Alternate Gas Providers") the right privilege or franchise to construct, maintain, operate or use gas facilities in, under, upon, over or across the present or future streets, alleys, bridges, easements or other public places of the City, for the purpose of supplying or delivering Natural Gas to customers located within the corporate limits of the City or receiving such gas from a person other than the Company within such corporate limits, and imposes a franchise compensation obligation or an equivalent on such Alternate Gas Provider for any customer or class of customers that is less than that imposed with respect to the same Customer or class of Customers under this Franchise Agreement, the franchise compensation rate and/or base to which such rate is applied with respect to the same class of customers shall be reduced under this Franchise Agreement so that the franchise compensation paid hereunder for such Customer class is no greater than the franchise compensation payable by such Alternate Gas Provider under the franchise agreement or ordinance applicable to it, when compared on a dollars-per-therm basis. This defemination shall be made initially by the City. If Company disputes this determination, it may appeal that determination to the Circuit Court, in and for Marion County, Florida. This obligation shall not apply, however, to any City owned and operated system. In the event that the City determines not to impose any franchise compensation by agreement, ordinance or otherwise on any such Alternate Gas Provider, the Company's obligation to pay a franchise fee under this Franchise Agreement with respect to revenues derived from the provision of service by the Company to the comparable class of customers served by such Alternate Gas Provider thereafter shall be extinguished. The City may, however, enter into alternative compensation agreements with Alternate Gas Providers. If City receives non-monetary compensation or other in-kind contributions that have the effect of circumventing payment of equivalent franchise fees and/or evasion of payment of franchise fees as consideration for a franchise with an Alternate Gas Provider, then the provisions of this section shall apply.
B. In the event the Company is granted a franchise from another Florida municipality or governmental entity within the counties of Marion, Lake, Seminole, Orange, Osceola or Polk, under which franchise fees are based upon a percentage of Gross Revenues that is higher than six percent (6%) of the Company's sales, distribution and delivery of natural gas to customers under such franchise, then at the City's option, the percentage basis of the Franchise Fee used in this Franchise Agreement may be adjusted to provide for a Franchise Fee that equals the franchise fee in that Florida municipality or governmental entity.
Section 27. Direction to Staff.
The City Council of the City of Ocala, Florida directs staff to take any and all other steps necessary to effectuate the adoption and implementation of this ordinance; and all other matters as provided for above and herein as well as to ensure the orderly and effective administration and implementation of the intent of this ordinance and the specific matters outlined herein.
Section 28. Direction to the Codifier.
It is the intention of the City Council of the City of Ocala, Florida that, to the fullest extent necessary and possible, (1) this ordinance shall become and be made a part of the Code of Ordinances, City of Ocala, Florida, (2) the sections and paragraphs of this ordinance may be renumbered or relettered in order to accomplish said intention; (3) terms or headings not affecting the intent of this ordinance may be changed to further accomplish said intention; and (4) any scrivener’s error(s) contained herein which do not affect the intent of this ordinance be corrected with the authorization of the City Manager or their designee and without the need for additional public hearings or consideration by the City Council.
Section 29. Repeal of Inconsistent and/or Conflicting Provisions.
The City Council of the City of Ocala, Florida hereby specifically repeals, to the extent of any such conflict, any and all ordinances, resolutions, policies, procedures and/or other articles which are conflicting and/or inconsistent with this ordinance and the intent and direction provided by the City Council herein.
Section 30. Severability of Ordinance Provisions.
If any section, phrase, sentence or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, it is the intent of the City Council of the City of Ocala, Florida that (1) such portion shall be deemed a separate, distinct and independent provision; (2) such holding shall not affect the validity of the remaining portions hereof; and (3) this ordinance be adopted as though any such provision was not included herein.
Section 31. Modifications Arising from Consideration at a Public Hearing.
It is the intention of the City Council of the City of Ocala, Florida that (1) the provisions of this ordinance may be modified as a result of its consideration by the City Council of matters that may arise during the public hearing(s) at which this ordinance is considered; and (2) any such modifications shall be incorporated into the final version of this ordinance.
Section 32. Acceptance by Company.
If the Company accepts the franchise granted by this ordinance, it shall, within 30 days from the passage and approval hereof, file a written acceptance with the city clerk or execute this Ordinance as set forth below.
Section 33. Effective Date of Ordinance.
This ordinance shall become effective immediately upon approval by the Mayor or becoming law without such approval.
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PASSED AND ADOPTED, in a regular session with a quorum present and voting, by the City Council of the City of Ocala, Florida this ____ day of October 2026.
CITY OF OCALA, FLORIDA
__________________________________________
By: IRE J. BETHA, SR., as
President of the City Council
ATTEST:
______________________________________________
By: ANGEL JACOBS, as
City Clerk
APPROVED AS TO FORM AND LEGALITY:
______________________________________________
By: WILLIAM E. SEXTON, as
City Attorney
APPROVED / DENIED by me, as Mayor of the City of Ocala, Florida this _____ day of October 2025.
__________________________________________
By: BENJAMIN MARCIANO, as
ORDINANCE NUMBER: __________________
INTRODUCED: __________________
ADOPTED: __________________
LEGAL AD NUMBER: __________________