Editor's note: Resolution No. 97-07, passed February 6, 1997, approved the transfer of Horizon Gas of Palm Bay, Inc. franchise to Heritage Operating Limited Partnership, a Delaware Limited Partnership. Please see § 54.22 for Resolution No. 97-07 in its entirety.
An Ordinance of the City of Palm Bay, Brevard County, Florida, Granting to Horizon Gas of Palm Bay, Inc., a Non-Exclusive Franchise to Import, Transport, Sell and Distribute Liquefied Petroleum Gas for Heating, Illuminating and Other Purposes in the City of Palm Bay, Brevard County, Florida; Setting Forth the Conditions and Privileges Accompanying the Grant of Franchise; Establishing Annual Franchise Fees; Providing for Review of Plans and Specifications; Requiring Compliance with Regulations; Providing for Indemnification; Requiring Comprehensive Liability Insurance; Establishing Service Standards; Providing for Franchise Purchase Option; Providing for Severability; Providing that This Ordinance is Also a Contract; Reserving Certain Powers to the City.
WHEREAS, the City Council of the City of Palm Bay, Florida (“City”), may grant franchises for the right and privilege to import, transfer, distribute and sell liquefied petroleum gas (hereafter referred to as “gas”) for heating, illuminating, cooking and other purposes within the city limits of the City; and,
WHEREAS, the City Council may grant such a franchise to applicants who desire to construct, operate, and maintain gas facilities within City-owned or controlled rights-of-way, easements or other dedicated areas; and,
WHEREAS, Horizon Gas of Palm Bay, Inc. (hereafter referred to as the “Company”) has requested of the City both, the grant of a franchise and the privilege to utilize the streets, alleys, avenues, bridges, easements of the City, with conditions; and,
WHEREAS, the City has deemed it to be in the best interest of the recipients of gas service in the City to grant a non-exclusive franchise to the Company for the construction and operation of a gas system within the city limits,
Now therefore, be it enacted by the City Council of the City of Palm Bay, Brevard County, Florida:
Section 1. Grant and Renewal of Franchise.
The City Council hereby grants a franchise to the Company, its successors and assigns, as a non-exclusive right for a period of seventeen (17) years from the original adoption date of September 1, 1994. This franchise shall include the right and privilege to import, transport, distribute and sell liquified petroleum gas (hereinafter referred to generally as "gas") for heating, illuminating, cooking and other purposes, within the limits of the City as the same now exists or as they may be extended in the future and for the purpose to establish the necessary equipment and to maintain storage facilities, gas main, service pipe, and any other appurtenances necessary to the sale, transportation and distribution of gas, in, under, upon, across and along the present and future places, streets, alleys, avenues, bridges, easements or other public places of way of such municipality, and to do all things which are, necessary, or customary in the accomplishment of this objective; subject, however, to the further provisions of this franchise; provided, however, that before said Company shall construct or expand its facilities, the approval of the governing body of the City of the location thereof, in the exercise of the discretion of said governing body of the City, shall be first obtained by said Company. The Company's facilities shall always be installed and operated in compliance of the zoning and building ordinances of the City.
Section 2. Obstructing Streets.
The Company shall exercise its privileges hereunder subject at all times to the police power of the City and shall not unnecessarily or unreasonably obstruct the use of or injure any street, avenue, alley, or other public place or way, and shall, upon the completion of any construction or repair, restore all streets, avenues, alleys, or other public places or way of the municipality which shall be opened by it or its agents or employees for the purpose of laying, placing, or repairing its aforesaid gas mains and or service pipes to as nearly the same order and condition as they were before the excavation was made as is reasonably possible. Any obstruction of any street, alley, park, boulevard, bridge, or other public place or way, or any failure properly to fill and maintain a street after excavation, after notice of fifteen (15) working days demanding a removal or repair, as the case may be, shall be moved or repaired by the City and the cost thereof, which cost shall exceed the average cost charged for similar work by the private sector, plus ten percent (10%) for administration and engineering expense, shall be charged against the Company and the City shall be reimbursed for the total cost.
Section 3. Acceptance.
The Company shall execute the acceptance of this franchise located below and file the same with the City within thirty (30) days after the date of adoption of this ordinance. The franchise shall go into effect when the acceptance has been filed with the City Clerk of the City of Palm Bay.
Section 4. Franchise Fees.
Upon acceptance of this franchise, the Company shall pay to the City an amount equal to seven and one-half percent (7½%) of the Company's gross revenues from April 21, 1994 (the date of acquisition of the system by Horizon Gas of Palm Bay, Inc.) until the date of acceptance of this franchise.
Within thirty (30) days after the first anniversary date of this grant and within thirty (30) days after each succeeding anniversary date of this grant, the Company, its successors and assigns, shall pay to the City and its successors an amount which will equal seven and one-half percent (7½%) of Company's gross revenues from the sale of gas to all gas customers within the corporate limits of the City. Gross revenue for purposes of this ordinance shall be defined as the revenue received by the company for the sale of gas and shall not include revenue from rental of or repairs to equipment.
The City further agrees that should any other company be granted the right to provide similar gas services in the city limits and should the franchise fee charged them be less than the sum set forth herein, then the franchise fee charged the Company shall be reduced to the lowest fee charged by the City to a Company in competition with the company herein.
Section 5. Rates and Charges.
The Company, its successors and assigns, shall at all times be limited in its charges for service furnished in accordance with this franchise to the schedule of charges which shall be presented to and approved by the City Council. The gas rates currently in effect on the date of adoption of this ordinance shall continue in effect pursuant to the terms of the previous franchise contained in Ordinance No. 62-5, which was held by General Development Utilities, Inc., until modified or changed by the parties hereto. The Company may, if it deems it necessary to amend or change said schedule of charges, give the City notice in writing of same. Within sixty (60) days after notice as aforementioned, the City shall authorize and hold a public hearing and within thirty (30) days after such public hearing, if the City shall decline to act, then the Company may forthwith put into effect such amendments or change of schedule. It is understood and agreed that if the Company should raise charges as hereinabove stated, the monies so collected shall be escrowed by the Company with a national or state banking institution, or the Company shall post with the City a good and sufficient surety bond, for a period of ninety (90) days. In the event the City should deny the raise at any time during this ninety (90) day period, the Company shall refund to its customers the monies collected by virtue of the raise. However, upon the expiration of the said ninety (90) days, the monies collected, if no action is taken by the City theretofore, shall become the funds of the Company and there shall be no further obligation on the part of the Company to escrow any monies or in the case of a surety bond, said surety bond will no longer be in force, and the increase in charges will continue the same as if the request of the Company had been granted. If at any time the rates for the gas service are insufficient to maintain and operate with an allowance for a fair return as determined by the formula and criteria used by the L.P. Gas Division of the Agricultural Department of the State of Florida on the replacement or reproduction value of the Company's property used and useful in furnishing gas, for maintenance and operation of the Company and an allowance for the replacement of equipment, and an allowance for debt service and an allowance being made for the depreciation of the gas system which will include all pipe lines, storage tanks, machinery and equipment and appurtenances thereto and in general all parts and portions of the gas system in the entirety, and all taxes of every description levied or imposed on the Company or its property, revenues, income and expenses, the City shall have the right and power to fix and make effective such rates as are reasonable, sufficient and compensatory, after taking into consideration the matters herein referred to. Any tax or charge imposed by any governmental authority on the Company which is a tax imposed solely because the Company is a utility, as distinguished from other individuals, corporations or businesses in general, may be apportioned among the consumers as a direct tax upon the consumers without resort to the City for permission to increase the Company's rates.
Section 6. Review of Company's Plans and Specifications.
The Company agrees that the location or relocation of all facilities shall be made in compliance with such rules and regulations as are now or hereafter may be imposed by the City. The Company agrees that all plans and specifications for the extension, location or relocation of any gas facilities shall be approved by the City prior to commencement of any construction. Such approval shall not unreasonably interfere with the proper operation and construction of the Company's facilities and services. The Company agrees to pay the inspection costs of the City in addition to the franchise fee. This inspection cost shall be a charge approved by the City by ordinance.
Section 7. Compliance with Regulation.
The Company agrees that in the construction, operation, extension, expansion and maintenance of the gas system, it will, at all times, comply with all City ordinances, comprehensive plan, statutes, and duly promulgated rules, standards and regulations as may be imposed by the City, State or Federal Government or their agencies and within their lawful authority. The City has the right, upon request, to inspect Company facilities and equipment during normal Company working hours.
Section 8. Indemnification.
The Company shall, at all times, protect, indemnify and save harmless the City, its boards, officers, agents, representatives, officials, and employees and any other city agencies and their members, officers, representatives, agents, officials, and employees, against any and all liabilities for injury to or death of any person or any damage to any property or any other liability, including but not limited to reasonable attorney's fees and court costs for both, trial and any appeals thereto, caused by the company, the Company's officers, representatives, agents, officials, contractors and all subcontractors, whether subcontractors of the Company or the Company's contractors, or employees, in the construction, operation, repair, or maintenance of its property, or arising out of the exercise of any right or privilege under the franchise.
Section 9. Comprehensive Liability Insurance.
At all times during the term of the franchise the Company will, at the Company's expense, maintain in force general comprehensive liability insurance with an insurance company approved by the City, the policy or policies to be in form satisfactory to the City Attorney. The coverage represented by the policy or policies shall be for the protection of the City, its officers, representatives, agents, officials, and employees against liability for loss or damages for bodily injury, death, and property damage occasioned by the activities of the Company under the franchise. Minimum liability limits under the policy or policies are to be one million dollars ($1,000,000.00) combined single limits for personal injury or death, or damage to property resulting from any one occurrence and in the aggregate. The policies mentioned in the foregoing sentence shall each contain a provision that a written notice of any cancellation or reduction in coverage of the policies shall be delivered to the City ninety (90) days in advance of the effective date of any cancellation.
Section 10. Service Standards.
The Company shall at all times provide and furnish an adequate, safe and continuous supply of liquefied petroleum gas to the City and its inhabitants, subject, however, to the further provisions of this section. The Company shall not be liable to the City or its inhabitants nor shall the City, or any inhabitant who is a customer of the Company be liable to the Company hereunder by reason of failure of the Company to deliver, or of the City or a customer to receive, gas as a result of acts of God or the public enemy, inability of pipeline suppliers or gas suppliers to furnish an adequate supply due to an emergency, an order or decision of a public regulatory body, or other acts beyond the control of the party affected. Whenever any of the occurrences named above take place, the Company shall have the right and authority and it shall be its duty to adopt reasonable rules and regulations in connection with limits curtailing or allocating extensions of service or supplying of gas to any customer or prospective customer, and withholding the selling of gas to new customers, provided that such rules and regulations shall be uniform as applied to each class of customers, and shall be nondiscriminatory. The Company shall have the right to sell gas for industrial use on an interruptible basis, requiring the customer to have standby equipment for the use upon notice by the Company. The Company rules, regulation, schedule or contracts for curtailing interruptible gas service shall be uniform as applied to each class of interruptible customers. If service is suspended because of any of the reasons set forth above, occurring through no fault or negligent act on the part of this Company, such suspension shall not be made the basis of an action or proceeding to terminate this franchise.
Section 11. Franchise Purchase Option.
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the City hereby has the right to purchase the pipeline system of the Company located within the City of Palm Bay and the City shall provide written notice of intent to exercise its right to purchase the company within thirty (30) days from the date of receipt of the two (2) appraisals as hereinafter provided. After such notice by the City, should it elect to exercise its right to purchase, the closing on such sale and purchase shall occur within one hundred and twenty (120) days after the City conducts any survey, investigation, evaluation or due diligence (investigation), of whatever type or nature, it deems necessary. Such investigation shall be concluded by the City within sixty (60) days after providing notice of its intent to exercise its right to purchase under this provision.
The purchase price shall be determined, established and set as follows:
a) within ten (10) days after the City notifies the Company of its intent to exercise its right to purchase the Company, both the City and the Company shall select a professional and experienced appraiser, appraising company or firm (appraiser) qualified to appraise and evaluate entities that provide the same services and are in the same type of business as the Company;
b) both appraisers shall utilize the same methods or procedure of evaluation to determine the value of the Company;
c) the value of the Company shall be determined by adding together the valuations established by each appraiser and dividing the sum total of the two amounts by two (2); that is, the value and purchase price for the Company shall be the average of the two (2) values set by the appraisals;
d) should the appraisers be unable to agree upon the method of evaluation to be utilized within five (5) days after their appointment, then the City and the Company shall each submit to the appraisers the method they deem appropriate. The appraisers shall then utilize the method drawn by lot from those submitted by the City and the Company.
Should the City determine it does not desire to purchase the Company after it conducts its investigation, the City shall notify the Company and shall be thereafter relieved of any obligation or responsibility to purchase.
Section 12. Approval of Transfer.
No sale, assignment or lease of this franchise shall be effective until it is approved by the City Council and until the vendee, assignee or lessee has filed in the office of the City Clerk an instrument duly executed reciting the fact of such a sale assignment or lease, accepting the terms of the franchise and an agreement to perform all the conditions thereof, together with a current, certified financial statement prepared by a C.P.A. licensed to do business in the State of Florida. The City will not unreasonably withhold its approval or delay the approval. The City will approve or disapprove the purchaser within sixty (60) days from request for approval being requested by the Company.
Section 13. Default.
The failure on the part of Company to comply in any respect with any of the provisions of this ordinance shall be grounds for forfeiture of this grant. However, no such forfeiture shall take effect if the propriety thereof is protested by the Company in a hearing before the City Council of the City to determine if the Company has failed to comply in any respect with provisions of this franchise. The Company shall have three (3) months after the final determination of the City Council to remedy any defaults the City Council may find before a forfeiture shall become final with the right of the City, at its discretion, to grant such additional time to Company for compliance, as necessities in the case may require.
Upon written notice by the City to the Company that any provision of this ordinance has been violated or breached, the Company shall have the right to request a hearing before the City Council to determine if the violation or breach is a basis to terminate the franchise granted hereunder. Such request for a hearing shall be made in writing to the City Clerk at the City of Palm Bay within ten (10) days after receipt of the notice. After the request for hearing is made by the Company, a hearing will be held by the City Council within forty five (45) days from the date of request, unless such time is expanded by the agreement of both the City and the Company. City Council shall render its decision on the hearing within twenty (20) days from the date of the hearing. The Company and the City shall have the right to present and cross-examine witnesses, and the right to be represented by counsel at such hearing. At anytime, the Company may appeal a decision of the City Council to a court of competent jurisdiction for an interpretation of the issue of default.
Section 14. Failure to Comply.
The failure on the part of the Company to comply in any substantial material respect with any of the provisions of this ordinance shall be grounds for forfeiture of the franchise, at the option of the City Council.
Section 15. Severability.
This franchise is granted pursuant to the laws of the State of Florida relating to the granting of such rights and privileges by municipal corporations. If any section, sentence, clause, part or provision of this ordinance is for any reason held illegal, invalid, or unconstitutional, such invalidity shall not affect the validity of the ordinance as a whole, or any other of the remaining portions. The invalidity of any portion of this ordinance shall not affect any consideration or other obligation of the Company.
Section 16. Effective Date.
The provisions of this ordinance shall become effective upon due execution and acceptance by the City and Company, respectively.
Section 17. Ordinance and Contract.
This ordinance, mutually agreed to by both parties, is both an ordinance of the City as well as a contract between the City and the Company.
Section 18. Reservations of the City.
(1) Generally. In addition to the specific reservations of the City set forth herein, the City Council hereby reserves unto the City the matters set forth in this section.
(2) Police Powers. In accepting a franchise, the Company acknowledges that its rights thereunder are subject to the police powers of the City to adopt and enforce ordinances, resolutions, rules, regulations, policies and practices necessary to the convenience, health, safety and welfare of the public; and it agrees to comply with all applicable ordinances, resolutions, rules, regulations, policies and practices by the City pursuant to such power. Any inconsistency between, or ambiguity created by the relationship between the provisions of this chapter and any other contemporaneous or future lawful exercise of the City's police powers shall be resolved in favor of the latter.
(3) Intervention. The City shall have the right of intervention in any action at law, suit or other proceeding relating to the System, the provision of services, or this ordinance which the Company is a party; and the Company shall not oppose such intervention by the City.
(4) Nonenforcement Not a Waiver. The Company shall not be excused from complying with any of the requirements of this chapter by any failure of the City on any one or more occasions to insist upon or to seek compliance with any such terms or conditions.
(5) Application Considerations. The considerations and criteria set forth in this chapter to assist the City Council may be changed by ordinance as the City Council deems appropriate, in accordance with law.
(6) Boards. The City Council reserves the right to create, establish or appoint such boards and persons to assist it in administering the provisions of this chapter and to establish a procedure for the creation, establishment, appointment or operation of such.
(Ord. 94-42, passed 9-1-94; Am. Ord. 97-05, passed 2-20-97)