Ord. 1510 2015-02-09 ORDINANCE NO. 1510
An Ordinance of the City Council of the City of Pearland, Texas,
granting to SiENERGY, L. P., the right, privilege and franchise to
construct, install, extend, remove, replace, abandon, operate and
maintain its facilities within the public rights-of-way of the City of
Pearland, Texas, for the transportation, delivery, sale and
distribution of natural gas; containing other provisions relating to
the foregoing subject; providing for repeal; providing for
severability; and providing an effective date.
WHEREAS, Chapter 121 of the Texas Utilities Code authorizes municipalities
to adopt ordinances that establish conditions for mapping, inventorying, locating, or
relocating pipelines over, under, along, or across a public street or alley or private
residential area in the boundaries of the municipality; and
WHEREAS, the City of Pearland, Texas ("City') strives to promote orderly
and safe development within the territorial limits of the City; and
WHEREAS, the City Council finds that this franchise agreement with
SiEnergy, L.P., a Texas Limited Partnership, (hereinafter referred to as "SiEnergy" or
"the Company') is in the best interest of the health, safety, and welfare of the citizens
of the City; now therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
Section 1. GRANT OF AUTHORITY. Subject to the terms, conditions and
provisions of this Ordinance, the right, privilege and franchise is hereby granted to
SiEnergy, L.P., to construct, install, extend, remove, replace, abandon, operate and
maintain its facilities within the Public Rights-of-Way of the City of Pearland, Texas,
for the transportation, delivery, sale and distribution of natural gas within the
corporate limits of the City of Pearland, as the same are now and as the same may
from time to time be extended.
Section 2. DEFINITIONS.
A. "City" shall mean the City of Pearland, Texas.
B. "Company" or "SiEnergy" shall mean SiEnergy, L.P., a Texas Limited
Partnership, and not any of its affiliates and subsidiaries, who shall have no rights,
privileges or franchise granted hereunder.
C. "Facilities" shall mean pipes, pipelines, natural gas mains, laterals,
feeders, regulators, meters, fixtures, connections and attachments and other
instrumentalities and appurtenances, used in or incident to providing transportation,
distribution, supply and sales of natural gas for heating, lighting, power and any other
purposes for which natural gas may now or hereafter be used.
D. "Public Rights-of-Way" shall mean the areas in, under, upon, over,
across, and along any and all of the present and future Streets or streams now or
hereafter owned or controlled by City.
ORDINANCE NO. 1510
E. "Street" shall mean the surface and the space above and below any
public street, road, highway, alley, bridge, sidewalk, or other public place or way.
Section 3. TERM OF FRANCHISE. This Franchise shall become effective
on the Effective Date described in Section 20 and shall be in full force and effect for
a term of thirty(30) years.
Section 4. CONSTRUCTION AND MAINTENANCE OF NATURAL GAS
DISTRIBUTION SYSTEM OR GAS TRANSPORTATION LINE. All Facilities
installed by the Company shall be of sound material and good quality, and shall be
laid so that they will not interfere with the artificial drainage of the City or its
underground fixtures, or with navigation in or the natural drainage of any stream. All
Facilities shall be installed in accordance with applicable Federal, State and City
regulations and in the absence of such regulations in accordance with accepted
industry practice. The Company shall comply with all laws, ordinances, rules and
regulations adopted by the City Council. Within the Public Rights-of-Way, the
location and route of the Facilities by the Company shall be subject to the
reasonable and proper regulation, direction and control of the City or the City official
to whom such duties have been delegated. Such regulation shall include, but not be
limited to, the right to require in writing, to the extent provided in Section 13, the
relocation of Company's Facilities at Company's cost within the Public Rights-of-Way
of the City whenever such relocation shall be reasonably necessary to accommodate
the widening, change of grade, or relocation by City of Streets or Public Rights-of-
Way, or construction or relocation by City of City utility lines or drainage facilities.
The Company shall provide the necessary automatic pressure release (cutoff) valves
which prevent the flow of the commodity if there should be any break or rupture
within the right of way limits of any street or public property; such valves must meet
with the approval of the City. Each valve must be clearly painted in a unique
identifiable color. The Company shall file with the City Secretary a statement
indicating the color of the valve. The fire department is authorized, in its discretion,
to actuate such valve in the event of an emergency. Upon completion of the
facilities, Company shall furnish to the City a building plan and drawing in electronic
format accurately showing the actual location, course and alignment of the pipeline
and facilities, said plans shall consist not only of the plan, but also of a suitable
profile accurately showing the location of all streets or alleys across or along which
the pipeline was laid as well as the location of any other pipeline, utility line or other
underground facility in close proximity of said pipeline. The Company shall at all
times keep on file with the City a current map or set of maps showing the Company's
facilities within the City or the City's extraterritorial jurisdiction. Such maps shall
indicate subdivision locations and locations of Company's customers. As extensions
or modifications of facilities are made from time to time, the company shall file maps
with the City showing those extensions or modifications within thirty (30) days
following completion of the extensions or modifications.
Section 5. STREET RESTORATION. The Company and its contractors
shall give the City reasonable notice, of the dates, location and nature of all work to
be performed on its Facilities within the Public Rights-of-Way. The Company and its
contractors must obtain a permit from the City to perform work in the Public Rights-
of-Way and must follow the City's permitting processes to keep the City informed of
the Company's and Company's contractors' work performed pursuant to the rights
granted under this Franchise. This Franchise and the permit issued by the City shall
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allow the Company to perform all work on Company's Facilities within the Public
Rights-of-Way and to park vehicles in the Streets and other Public Rights-of-Way
when necessary for the installation, replacement, abandonment, operation or
maintenance of Company's Facilities. Following completion of work in the Public
Rights-of-Way, the Company shall repair the affected Public Rights-of-Way as soon
as possible but no later than the time frame established by the permit issued by the
City. In all cases the Company shall comply with all City ordinances governing time
periods and standards relating to excavation and restoration work in the Public
Rights-of-Way. No street, alley, highway or public place shall be encumbered for a
longer period than shall be necessary to execute the work. The Company will
restore all portions of any street or alley across or along which facilities are installed
in as good a state of repair and condition as they were in at the time construction,
repair or removal was commenced, such repairs to be to the satisfaction of the City.
If the Company fails to commence or thereafter to diligently prosecute any such
repair, refilling or other work so required to be done by it within a reasonable time
after being notified thereof by the City, the City may cause such work to be done at
the expense of the Company and may recover all such expenses from the Company,
together with all costs and reasonable attorney's fees. In addition the City may
include a penalty of twenty-five (25%) percent of such cost for such service.
Section 6. QUALITY OF SERVICE. The service furnished hereunder to
the City and its inhabitants shall be in accordance with the quality of service rules of
the Railroad Commission of Texas and all other applicable local, state and federal
regulations. The Company shall furnish the grade of service to its customers as
provided by its rate schedules and shall maintain its system in reasonable operating
condition during the continuance of this Franchise. An exception to this requirement
is automatically in effect, but only for so long as is necessary, when caused by a
shortage in materials, supplies and equipment beyond the control of the Company as
a result of fires, strikes, riots, storms, floods and other casualties, governmental
regulations, limitations and restrictions as to the use and availability of materials,
supplies and equipment and as to the use of the services, and unforeseeable and
unusual demands for service. In any of such events the Company shall do all things
reasonably within its power to restore normal service as quickly as practicable.
Section 7. PAYMENT TO THE CITY. In consideration of the rights and
privileges herein granted, the administration of the Franchise by the City, the
temporary interference with the use of Public Rights-of-Way and cost and obligations
undertaken by the City in relation thereto and in lieu of any license, charge, fee,
street or alley rental or other character of charge for use and occupancy of the
Streets, alleys, and public places of the City, and in lieu of any inspection fee, the
Company agrees to pay to the City franchise fees in the amount and manner
described herein.
The Company agrees to pay to the City quarterly during the continuance of
this Franchise a sum of money equal to four percent (4%) of the Company's gross
receipts for the preceding calendar quarter received by the Company from the sale
of gas within the corporate limits of the City. The franchise fees hereunder shall be
calculated for the calendar quarters ending March 31, June 30, September 30, and
December 31 and shall be payable on or before the fifteenth day of May, August,
November, and February following the quarter for which payment is made, beginning
with the first such date following the Effective Date of this Franchise and each
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ORDINANCE NO. 1510
August 15th, November 15th, February 15th, and May 15th thereafter; provided,
however, the first such payment shall be prorated as necessary to reflect only those
gross receipts received by the Company after the Effective Date of this Franchise. In
no event shall the Company be required to remit to the City franchise fee amounts
that for any reason whatsoever are not fully recoverable from its customers. Upon
receipt of the above amount of money, the City Secretary shall deliver to the
Company a receipt for such amount. If any payment due date required herein falls
on a weekend or bank holiday, payment shall be made on or before the close of
business of the first working day after the payment due date.
If, during the term of the Ordinance granted hereunder, the nature of
competition in the provision of gas utility services in the City changes to the extent
that Company reasonably believes the franchise fee provisions of this ordinance
cause the Company to be placed at a competitive disadvantage in the conduct of its
business within the City, then the Company may request the renegotiation of the
franchise fee provisions of this Ordinance.
Should the Company request a change in the franchise fee provision of this
Ordinance, both parties agree to enter into a "good faith" negotiation. The term "good
faith," for the purpose of this Ordinance, shall mean an objective, diligent, timely, and
responsible discourse on the issue(s) involved and a resolute attempt to settle said
issue(s). Should, as a result of renegotiation, City and Company agree to a change
in a provision of this Ordinance, the change shall become effective upon passage of
an Ordinance by the City in accordance with the City Charter and acceptance of the
amendment by the Company.
Section 8. ANNEXATIONS BY CITY. This Franchise shall extend to and
include any and all territory that is annexed by the City during the term of this
Franchise. Within sixty (60) days from the receipt of notice from the City of any such
annexation, the Company shall assure that any and all customers within such
annexed territory are included and shown on its accounting system as being within
the corporate limits of the City of Pearland. After such sixty (60) day period the
payment provisions specified in Section 7 of this Franchise shall apply to gross
receipts received by the Company from customers located within such annexed
territory. The Company shall true-up its map of City boundaries to the City's map on
an annual basis.
Section 9. NON-EXCLUSIVE FRANCHISE. Nothing contained in this
Franchise shall ever be construed as conferring upon the Company any exclusive
rights or privileges of any nature whatsoever.
Section 10. COMPLIANCE AND REMEDIES. (a) In the event the Company,
by act or omission, violates any material term, condition or provision of this
Franchise, the City shall notify the Company in writing of such violation. Should the
Company fail or refuse to correct any such violation within thirty (30) days from the
date of the City's notice, the City shall, upon written notification to the Company,
have the right to terminate this Agreement. Any such termination and cancellation
shall be by ordinance adopted by City Council; provided, however, before any such
ordinance is adopted, the Company must be given at least sixty (60) days' advance
written notice. Such notice shall set forth the causes and reasons for the proposed
termination and cancellation, shall advise the Company that it will be provided an
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opportunity to be heard by City Council regarding such proposed action before any
such action is taken and shall set forth the time, date and place of the hearing.
(b) Other than its failure, refusal or inability to pay its debts and
obligations, including, specifically, the payments to the City required by this
Franchise, the Company shall not be declared in default or be subject to any
sanction under any provision of this Franchise in those cases in which performance
of such provision is prevented by reasons beyond its control.
(c) The rights and remedies of the City and the Company set forth herein
shall be in addition to, and not in limitation of, any other rights and remedies provided
at law or in equity and the City's exercise of any particular remedy shall not
constitute a waiver of its rights to exercise any other remedy.
(d) Any failure by a Party to insist upon strict performance by the other Party of
any material provision of this Agreement shall not be deemed a waiver thereof or of
any provisions hereof, and the Party shall have the right at any time thereafter to
insist upon strict performance of any and all of the provisions of the Agreement.
(e) The construction and validity of this agreement shall be governed by the laws
of the State of Texas. Venue shall exclusively be in Brazoria County, Texas.
(f) Nothing in this Agreement shall constitute a waiver by the City of its
governmental or sovereign immunity, nor shall the City's enforcement of any legal
right or assertion of any affirmative defense arising out of this Agreement constitute a
waiver of the City's governmental or sovereign immunity.
Section 11. RESERVE OF POWERS. The City, by the granting of this
Franchise, does not surrender or to any extent lose, waive, impair or lessen the
lawful powers, claims and rights, now or hereafter vested in the City under the
Constitution and statutes of the State of Texas and under the Charter and
Ordinances of the City of Pearland or other applicable law, to regulate public utilities
within the City and to regulate the use of the Streets by the Company; and the
Company by its acceptance of this Franchise agrees that all lawful powers and
rights, whether regulatory or otherwise, as are or as may be from time to time vested
in or reserved to the City, shall be in full force and effect and subject to the exercise
thereof by the City at any time and from time to time.
Section 12. INDEMNITY. THE COMPANY, ITS SUCCESSORS AND
ASSIGNS, SHALL PROTECT AND HOLD THE CITY AND ITS OFFICERS,
AGENTS, AND EMPLOYEES (COLLECTIVELY REFERRED TO IN THIS SECTION
AS "THE CITY") HARMLESS AGAINST ANY AND ALL CLAIMS OR DEMANDS
FOR DAMAGES TO ANY PERSON OR PROPERTY BY REASON OF THE
CONSTRUCTION AND MAINTENANCE OF THE COMPANY'S NATURAL GAS
PIPELINES, OR IN ANY WAY GROWING OUT OF THE RIGHTS GRANTED BY
THIS FRANCHISE, EITHER DIRECTLY OR INDIRECTLY, OR BY REASON OF
ANY ACT, NEGLIGENCE OR NONFEASANCE OF THE COMPANY OR THE
CONTRACTORS, AGENTS OR EMPLOYEES OF THE COMPANY OR ITS
SUCCESSORS AND ASSIGNS, AND SHALL REFUND TO THE CITY ALL SUMS
WHICH THE CITY MAY BE ADJUDGED TO PAY ON ANY SUCH CLAIM, OR
WHICH MAY ARISE OR GROW OUT OF THE EXERCISE OF THE RIGHTS AND
PRIVILEGES HEREBY GRANTED OR BY THE ABUSE THEREOF, AND THE
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ORDINANCE NO. 1510
COMPANY OR ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY AND
HOLD THE CITY HARMLESS FROM AND ON ACCOUNT OF ALL DAMAGES,
COSTS, EXPENSES, ACTIONS, AND CAUSES OF ACTION THAT MAY ACCRUE
TO OR BE BROUGHT BY, A PERSON, PERSONS, COMPANY OR COMPANIES
AT ANY TIME HEREAFTER BY REASON OF THE EXERCISE OF THE RIGHTS
AND PRIVILEGES HEREBY GRANTED, OR OF THE ABUSE THEREOF.
Section 13. RELOCATION OF FACILITIES. The Company shall, upon
written request of the City and in accordance with applicable City ordinances,
relocate its Facilities within Public Rights-of-Way at Company's own expense,
exclusive of Facilities installed for service directly to City, whenever such shall be
reasonably necessary on account of the widening, change of grade, or relocation by
City of Streets or Public Rights-of-Way, or construction or relocation by City of City
utility lines or drainage facilities. The Company must provide emergency line
locating services to the City at no additional cost and provide these services within
two hours when reasonable and practical.
Section 14. OPERATIONAL PROCEDURES. The Company's operational
staff and City Staff will meet at mutually agreeable times and dates to discuss
operational practices and procedures, to communicate regarding upcoming projects,
and to attempt to resolve any outstanding disputes or concerns.
Section 15. GOVERNMENTAL FUNCTION. All of the regulations and
activities required by this Franchise are hereby declared to be governmental and for
the health, safety and welfare of the general public.
Section 16. RECORDS AND REPORTS. (a) Books of Account. The
Company shall keep complete and accurate books of accounts and records of its
business and operations under and in connection with this Franchise. All such
books of accounts and records shall be kept at the Company's principal office in
Lakeway, Texas.
(b) Access by City. The City may conduct an audit or other inquiry or may
pursue a cause of action in relation to the payment of the franchise fee only if such
audit, inquiry, or pursuit of a cause of action concerns a payment made less than
three (3) years before the commencement of such audit, inquiry, or pursuit of a
cause of action. Each party shall bear its own costs of any such audit or inquiry.
Upon receipt of a written request from the City, all books and records related to the
Company's operations under this Franchise shall be made available for inspection
and copying no later than thirty (30) days from receipt of such request.
(c) Interest on Underpayments and Overpayments. (1) Amounts due to
the City for late payments shall include interest, compounded daily equal to the
return on equity plus three percent (3%) granted to the Company in its most recent
proceeding fixing rates applicable to customers within the corporate limits of the City.
(2) If the City identifies, as a result of a franchise fee compliance review, amounts
owed by the Company from prior periods or prior underpayments, then the Company
shall pay simple interest on such amounts equal to the return on equity granted to
the Company in its most recent proceeding fixing rates applicable to customers
within the corporate limits of the City. Said interest shall be payable on such sums
from the date the initial payment was due until it is paid and shall not be billed to
customers. (3) Amounts due the Company for past overpayments shall include
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ORDINANCE NO. 1510
simple interest equal to the return on equity granted to the Company in its most
recent proceeding fixing rates applicable to customers within the corporate limits of
the City; provided, however, if there is a change in the approved return on equity
during the time period subject to the City's audit or inquiry, then for each time period
during which there was an overpayment, the approved return on equity in effect
during such time period shall be used in calculating interest under this subparagraph
(c). Interest payable on such sums shall be credited to customers.
Section 17. EASEMENT. In consideration for the compensation set forth in
Section 7, the City agrees that if the City sells, conveys, or surrenders possession of
any portion of the Public Right-of-Way that is being used by the Company pursuant
to this Franchise, the City, to the maximum extent of its right to do so, shall first grant
the Company an easement for such use and the sale, conveyance, or surrender of
possession of the Public Right-of-Way shall be subject to the right and continued use
of the Company.
Section 18. TRANSFER, RENEWAL OR EARLY TERMINATION OF
FRANCHISE. No transfer of this franchise shall be effective unless it be in writing, in
duplicate, signed by the transferor and by the transferee, and stating the true
consideration of such transfer, and it shall be filed with the City Secretary. If not
approved by the City Council, the transfer or attempted transfer shall be null and
void. The Company shall give the City written notice of any request for renewal of its
franchise six (6) months prior to the expiration of the franchise granted by this
Ordinance. The Company may terminate this franchise prior to the expiration hereof
by giving City written notice of such early termination six (6) months prior to the
effective date of such early termination.
Section 19. ABANDONMENT. In the event of abandoning or temporarily
abandoning a pipeline or related facilities, it shall be the duty of the Company, under
observation of the City, to:
(a) Disconnect from all sources the transported medium from all sources;
and
(b) Purge the transported medium and replace with an inert material vented
as appropriate and the ends sealed.
Section 20. ACCEPTANCE. The Company shall, within thirty (30) days
following the final passage and approval of this Franchise, file with the City Secretary
of the City of Pearland a written statement signed in its name and behalf in the
following form:
"To the Honorable Mayor: and City Council of the City of Pearland:
SiEnergy, L.P., its successors and assigns, hereby accepts the
attached Franchise Ordinance and agrees to be bound by all of its
terms and provisions."
SiEnergy, L.P.
By: SiEnergy, LLC, its General Partner
7
ORDINANCE NO. 1510 7
By:_ _/_/._ /rOPF, _
June lei ely, Chief Executive 0 icer /
Dated thisay of je , 2015.
Section 21. SEVERABILITY. If any provision, section,
subsection, sentence, clause or phrase of this Franchise is for any reason held to be
unconstitutional, void, or invalid or for any reason unenforceable, the validity of the
remaining portions of this Franchise shall not be affected thereby, it being the intent
the City of Pearland, in adopting this Franchise, that no portion hereof or provision
hereof shall become inoperative or fail by reason of any unconstitutionality or
invalidity of any other portion, provision or regulation and, to this end, all provisions
of this ordinance are declared to be severable.
Section 22. NOTICES. Every notice, order, petition, documents or other
direction or communication to be served upon the City or the Company shall be
deemed sufficiently given if sent by registered or certified mail, return receipt
requested. Every such communication to the Company shall be sent to:
SiEnergy, L.P.
June M. Dively, Chief Executive Officer
3 Lakeway Centre Court, Suite 110
Lakeway, TX 78734
Every such communication to the City or the City Council shall be sent
to the:
With copies to:
City of Pearland
Office of the City Manager
3519 Liberty Drive
Pearland, TX 77581
Section 23. REPEAL. All ordinances or parts of ordinances in force when
the provisions of this Ordinance becomes effective which are inconsistent or in
conflict with the terms and provisions contained in this Ordinance are hereby
repealed only to the extent of such conflict.
Section 24. PASSAGE AND EFFECTIVE DATE. Provided the Company
files a written acceptance of this Franchise with the City within thirty (30) days after
final passage of this Ordinance, this Franchise shall take effect on the date it is
passed, approved, and adopted as recorded below(the"Effective Date").
PASSED and APPROVED on First Reading this the 26"' day of January, A. D.,
2015.
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ORDINANCE NO. 1510
Y-PEAR
CITY MAN A GER
ATTEST:
Yi NG LORKITG, TR ;1 j\
►�' SECR ARY
PASSED and APPROVED on Second and Final Reading this the 9th day of
February, A. D., 2015.
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LA ��•E A/R••
Y MA ' GER
ATTEST:
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YJ• NG LO 'I I rd, TRI/ , =�.
•l` Y SEC' TARP
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
9
•
nergy
November 1, 2019
To: City of Pearland
Office of the City Manager
3519 Liberty Drive
Pearland,Texas 77581
Re: Q3 2019 Franchise Fees per Ordinance No. 1510
In accordance with Section 7 of Ordinance #1510, SiEnergy L.P. hereby states that we did not ••
have any customers or facilities in the City of Pearland for the quarter ending on September 30,
2019. Accordingly, the gross revenue for Q3 2019 from the transportation of gas and sale of gas
to customers within the city limits was $0.00. No payment under this Ordinance is required at
this time.
Gross Receipts from Pearland: $ 0.00
City Franchise Rate 4%
Franchise Fee Due $ 0.00
SiEnergy, L.P.
By:
Peter E.`_etty, Program 1 i nager
(512) 261-6216 Office
(832)201-7286 Fax
4
i Energy
PO Box 340279 1 Austin,TX 78734-0279 ph 512 261.6216