Subd. 1. Definition. The term "franchise", as used in this section, shall be construed to mean any special privileges granted to any person in, over, upon or under any of the streets or public places of the city, whether the privilege has heretofore been granted by it or by the state or shall hereafter be granted by the city or by the state.
Subd. 2. Franchise Ordinances. The Council may grant franchises by ordinance. Franchise rights shall always be subject to the superior right of the public to the use of streets and public places. All persons desiring to make any burdensome use of the streets or public places, inconsistent with the public's right in such places, or desiring the privilege of placing in, over, upon or under any street or public place any permanent or semi-permanent fixtures for the purpose of constructing or operating railways, telegraphing or transmitting electricity, or transporting by pneumatic tubes, or for furnishing to the city or its inhabitants or any portion thereof, transportation facilities, water, light, heat, power, gas or any other such utility, or for any other purpose, shall be required to obtain a franchise before proceeding to make the use of the streets or public places or before proceeding to place such fixtures in such places.
Subd. 3. Power of Regulation Reserved. The city shall have the right and power to regulate and control the exercise by any person, of any franchise however acquired, and whether the franchise has been heretofore granted by it or by the state.
Subd. 4. Conditions in Every Franchise. All conditions specified in this section shall be a part of every franchise even though they may not be expressly contained in the franchise.
A. The grantee shall be subject to and will perform on its part all the terms of this section and will comply with all pertinent provisions of the City Charter and City Code, as the same may from time to time be amended.
B. The grantee shall, in no case, claim or pretend to exercise any power to fix fares, rates and charges; but that the fares, rates and charges shall at all times be just, fair and reasonable for the services rendered and shall in all cases be fixed and from time to time changed, unless regulated by an agency of the state, in the manner following:
1. A reasonable rate shall be construed to be one which will, with efficient management, normally yield above all operating expenses and depreciation, a fair return upon all money invested.
2. If possible, maximum rates and charges shall be arrived at by direct negotiation with the Council.
3. If direct negotiations fail to produce agreement, the Council shall, not less than 30 days before the expiration of any existing rate schedule or agreement, appoint an expert as its representative, the franchisee shall likewise appoint an expert as its representative and the two of them shall appoint a third person, preferably an expert, and the three of them shall constitute a Board of Arbitration. The Board shall report its findings as soon as possible and the rates and charges it shall agree upon by majority vote shall be legal and binding, subject only to review by a court of competent jurisdiction upon application of one of the parties.
C. The Council shall have the right to require reasonable extensions of any public service system from time to time, and to make such rules and regulations as may be required to secure adequate and proper service and to provide sufficient accommodations for the public.
D. The grantee shall not issue any capital stock on account of the franchise or the value thereof, and that the grantee shall have no right to receive upon condemnation proceedings brought by the city to acquire the public utility exercising the franchise, any return on account of the franchise or its value.
E. No sale or lease of the franchise shall be effective until the assignee or lessee shall have filed with the city an instrument, duly executed, reciting the facts of the sale or lease, accepting the terms of the franchise and agreeing to perform all the conditions required of the grantee thereunder.
F. Every grant of a franchise permitting the erection of poles, masts or other fixtures in the streets and for the attachment of wires thereto, or for the laying of tracks in, or of pipes or conduits under the streets or public places, or for placing in the streets or other public places any permanent or semi-permanent fixtures whatsoever, shall be subject to the conditions that the Council shall have the power to require the alterations therein, or relocation or rerouting thereof, as the Council may at any time deem necessary, for the safety, health or convenience of the public. Particularly, the Council shall have the power to require the removal of poles, masts and other fixtures bearing wires and placing underground all facilities for whatsoever purpose used.
G. Every franchise shall contain a provision granting the city the right to acquire the same in accordance with statute.
H. The franchisee may be obligated by the city to pay the city fees to raise revenue or defray increased costs accruing as a result of utility operations, or both, including, but not limited to, a sum of money based upon gross operating revenues or gross earnings from its operations in the city.
Subd. 5. Further Provisions of Franchises. The enumeration and specification of particular matters which must be included in every franchise or renewal or extension thereof, shall not be construed as impairing the right of the city to insert in any such franchise or renewal or extension thereof such other and further conditions and restrictions as the Council may deem proper to protect the city's interests, nor shall anything contained in this section limit any right or power possessed by the city over existing franchises.