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HomeMy WebLinkAboutOrdinance - 2019-O0024 - Atmos Energy Franchise Agreement - 03/12/2019 First Reading Second Reading February 25, 2019 March 12, 2019 Item No. 7.5 Item No. 7.2 ORDINANCE NO. 2019-00024 AN ORDINANCE OF THE CITY OF LUBBOCK, TEXAS, GRANTING TO ATMOS ENERGY CORPORATION, A TEXAS AND VIRGINIA CORPORATION WITH ITS PRINCIPAL OFFICE IN THE CITY OF DALLAS, DALLAS COUNTY, TEXAS) THE FRANCHISE AND RIGHTS TO CONDUCT IN SUCH CITY THE BUSINESS OF ACQUIRING, MAINTAINING, CONSTRUCTING, LAYING, REPAIRING, REMOVING, REPLACING, INSTALLING, OPERATING, AND DISPOSING OF A GAS SYSTEM FOR THE SALE, TRANSPORTATION, AND DISTRIBUTION OF NATURAL GAS WITHIN THE MUNICIPAL BOUNDARIES OF THE CITY AND TO THE RESIDENTS AND BUSINESSES LOCATED THEREIN FOR LIGHT, HEAT, POWER, AND ANY OTHER PURPOSES AND THE RIGHT TO USE THE PRESEN'"I' AND FUTURE STREETS, ROADS, HIGHWAYS, ALLEYS, PUBLIC WAYS, AND REAL PROPERTY IN SUCH CITY AND OWNED OR CONTROLLED BY SUCH CITY FOR SUCH PURPOSES; PRESCRIBING THE TERMS AND CONDITIONS TO WHICH SUCH FRANCHISE AND RIGHTS ARE SUBJECT; AND PRESCRIBING THE TERM OF SUCH FRANCHISE AND RIGHTS, BE IT HEREBY ORDAINED by the CITY of LUBBOCK, TEXAS (hereinafter referred to as the "City") that, subject to the tern-is and conditions hereinafter set forth, ATMOS ENERGY CORPORATION, a Texas and Virginia corporation with its principal office in the City of Dallas, Dallas County, Texas (hereinafter referred to as '"Atmos Energy" or"Company"), be, and hereby is, granted the non-exclusive franchise and rights to conduct in the City the business of acquiring (by purchase, lease, or otherwise), main- taining, constructing, laying, repairing, removing, replacing, installing, operating, and disposing of (by sale, lease, or otherwise) a gas system, as hereinafter defined, for the sale, transportation, delivery, and distribution of natural gas within the municipal boundaries of the City and to the residents and businesses located therein for light, heat, power, and any other purpose during the term set forth below. Such franchise and rights shall include, but not be limited to, the right to use the present and future streets, roads, highways, alleys, public ways, and other real property owned by or under the control of the City for purposes of maintaining, constructing, laying, repairing, removing, replacing, installing, and operating any and all components of the gas system, together with access, at all times and from time to time, to such streets, roads, highways, alleys, public ways, and other real property during the term hereof, ARTICLE I DEFINITIONS For purposes of this ordinance, the following terms shall have the meanings set forth below: Section 1.1. Gas System. The term "gas system" shall mean any and all pipelines, as hereinafter defined, meters, valves, compressors, anti-corrosion items, facilities, structures, machinery, equipment, and appurtenances of any kind that Atmos, Page 2 of 14 Energy may deem necessary or advisable for the exercise of the franchise and rights granted to Atmos Energy herein. Section 1.2. Gross Revenues. The term "gross revenues" shall mean all revenue derived or received, directly or indirectly, by Atmos Energy from or in connection with the operation of the System and for its services and related services provided by Atmos Energy to residential, commercial, industrial, governmental and municipal customers located within the corporate limits of the City and including, without limitation: (a) All revenues received by Atmos Energy from the sale of gas within the City to all customers within the City; and (b) All revenues received by Atmos Energy from the transportation of gas through the pipeline system of Atmos Energy within the City to commercial and industrial customers within the City. (c) Gross revenues shall not include: (1) the revenue of any affiliate or subsidiary of Atmos Energy; (2) taxes imposed by law on customers that Atmos Energy is obligated to collect and which Atmos Energy passes on, in full, to the applicable tax authority or authorities; (3) any investment income earned by Atmos Energy, (4) revenues from the sale, distribution or transportation of natural gas to or for governmental or municipal customers located within the corporate limits of the City to the extent any franchise fees payable to the City on account of such gross revenues are not recoverable, whether by applicable law or otherwise, by Atmos Energy through its service rates, surcharge or line-item billing, or (5) fees collected pursuant to this franchise. Section 1.3. Pipelines. The term "pipelines" shall mean any and all above-ground and below-ground pipes, including, but not limited to, mains, distribution lines, secondary lines, laterals, and other pipes, that have been, are being, or are intended to be used at any time in, or in connection with, the sale, transportation, or distribution of natural gas within the City. Section 1.4. Public Right-of-Way. The term "public right-of-way" shall mean public streets, alleys, highways, bridges, easements, public places, public thoroughfares, grounds, and sidewalks of the City, as they now exist or may be hereafter constructed, opened, laid out or extended within the present limits of the City, or in Such territory as may hereafter be added to, consolidated or annexed to the City. Section 1.5, System. The term "system" shall mean all of Atmos Energy's pipes, pipelines, gas mains, laterals, feeders, regulators, meters, fixtures, connections, and any other equipment or instrumentalities used in or incident to providing delivery, transportation, distribution, supply and sales of natural gas for heating, lighting, power, and any other purpose for which natural gas may now or hereafter be used, located within the corporate limits of the City. Page 3 of 14 Section 1.6. Transport Customer. The term "transport customer" shall mean any person or entity for which Atmos Energy transports gas through the pipeline system of Atmos Energy within the City to customers for delivery or consumption within the City. ARTICLE 11 TERM Section 2.1. Term. Unless earlier terminated in accordance with the terms and provisions hereof, the term of the franchise and rights hereby granted to Atmos Energy shall be for a period of fifteen (15) years, commencing on the effective date hereof as defined in Section 8.7,, below. ARTICLE III ACKNOWLEDGMENT AND GRANT OF SPECIFIC RIGI-ITS OF ATMOS ENERGY Section 3.1. Rights and Powers of Atmos Energy. In addition to the franchise and rights granted herein to Atmos Energy, Atmos Energy has rights and powers granted pursuant to federal and state statutes and laws and the rules and regulations adopted by the Railroad Commission of Texas. Unless specified herein, this franchise does not abrogate such rights, ARTICLE IV 0B.LIGATIONS OF ATMOS ENERGY Section 4.1. Franchise Fee. (a) As consideration for the grant of the franchise and rights herein and for the use by Atmos Energy of the streets, roads, highways, alleys, public ways, and other real property owned or controlled by the City, Atmos Energy shall pay to the City, within thirty (30) days after the end of each calendar quarter, a franchise fee equal to five percent (5%) of Atmos Energy's gross receipts derived from the sale, transportation, and distribution by Atmos Energy of natural gas in the City limits during the preceding calendar quarter. At any time during the term of this franchise, the City may increase the franchise -fee payable hereunder. In the event the franchise fee herein provided, whether initially or as subsequently increased, is in excess of the amount recovered by Atmos Energy through base rates or surcharges, the City agrees that Atmos Energy may immediately add a line-item Surcharge to the monthly bills of Atmos Energy's customers located within the City in an amount sufficient to recover such increase, Page 4 of 14 (b) Nothing in Subsection 4.1(a) shall preclude, or be deemed to preclude, Atmos Energy and the City frorn agreeing to an increase in the franchise fee in excess of the limitations imposed in Such subsection or as otherwise allowed by applicable law. (c) The franchise fee, together with any and all charges of the City for water, sewage, and garbage services provided by the City to Atmos Energy, any and all sales taxes collected by Atmos Energy, any and all reimbursement Atmos Energy is obligated to pay to City for repair of streets, and any and all ad valorem taxes assessed by the City against Atmos Energy' property, shall constitute the only amounts for which Atmos Energy shall be obligated to pay to the City and shall be in lieu of any and all other costs, levies, assessments, fees, or other amounts, of any kind whatsoever, that the City, currently or in the future, may charge Atmos Energy or assess against Atmos Energy' property. (d) If Atmos Energy fails to pay when due any payment provided for in this Section, Atmos Energy shall pay such amount plus interest thereon at the current prime rate per annum, from such due date until payment is received by City. (e) The reimbursement of the City by Atmos Energy for hiring experts in connection with the rate making process pursuant to state law for which Atmos Energy may be legally liable shall not be deducted from the gross receipts payment. Section 4.2. Construction and Work Done By Atmos Energy; Insurance Requirements. (a) All construction and the work done by Atmos Energy, and the operation of its business, under and by virtue of this ordinance, shall be in conformance with the ordinances, rules and regulations now in force and that may hereafter be adopted by the City, relating to the use of its Public Rights-of-Way and grounds of the City. (b) Atmos Energy shall, when reasonably practicable, install all pipelines under-ground at such depth and in such manner so as not to interfere with the existing pavement, curbs, gutters, or underground wires, cables, or water or sewer pipes owned or controlled by the City, Atmos Energy shall attempt to utilize the alleys of the City insofar as is reasonably y practicable in conducting its work and activities hereunder. Notwithstanding the foregoing, however, Atmos Energy may, when reasonably necessary, utilize the streets and any other public ways owned or controlled by the City to perform such work and activities. Atmos Energy shall not, unnecessarily or for any unreasonable period of time, obstruct or interfere with the public use of any of the streets, roads, highways, alleys, public ways, or other real property owned or controlled by the City. Page 5 of 14 (c) In determining the location of Atmos Energy's pipeline within the City, Ati-nos Energy shall minimize interference with then-existing underground structures of City or other utility franchises. Likewise, in determining the location of the facilities of the City and other utility franchises within the City, City shall minimize interference with existing facilities of Atmos Energy and shall request other utility franchises to minimize interference with existing facilities of Atmos Energy. (d) When Atmos Energy makes or causes to be made excavations or places or causes to be placed obstructions in any Public Right-of-Way or other public place, the public shall be protected by barriers and lights placed, erected, marked and maintained by Atmos Energy in accordance with applicable state and federal requirements. Atmos Energy shall repair, clean up, and restore to as good a condition as before commencement of work, all Public Rights-of-Way or other public places disturbed during the construction and repair of its gas distribution system. In the event Atmos Energy fails to restore the Public Rights-of-Way or public places to as good a condition as before the commencement of the work and within a reasonable time, the City may restore or maintain same, after giving Atmos Energy thirty (30) days' written notice, provided however that if Atmos Energy is proceeding diligently to restore the property, the time for restoration shall be extended for such time as is necessary for Atmos Energy to complete the restoration, If Atmos Energy fails to restore the Public Rights-of-Way or public places appropriately, Atmos Energy will receive a bill for the cost of the City repairing same. Atmos Energy shall, within thirty (30) days after receiving such bill, pay the actual cost for such service. In the second Such instance of a failure, and in each instance of failure thereafter, to restore the Public Right-of-Way or public places appropriately in any calendar year, the City may include a penalty of up to ten percent (10%) of the City's cost of repairs. Any penalty of less than One Hundred Dollars ($100,00) shall be waived as de n7inimus, (e) If City abandons any Public Right-of-Way in which Atmos Energy has facilities, Atmos Energy shall have the right to maintain its use of the former Public Right-of-Way as may be provided by applicable law. (f) Atmos Energy shall carry a policy or policies of insurance issued by an insurance company or companies reasonably acceptable to City. Such policy or policies in the aggregate shall provide for the following minimum coverages: (i) Standard comprehensive general liability including coverage for premises, operations, explosion, products & completed operations, contractual liability, underground property damage, broad form property damage, independent contractors and personal injury; and (ii) General liability, combined single limit, $1,000,000 per occurrence. The City acknowledges that Atmos Energy is self-insured or desires the ability to be self'-insured. Nothing herein prevents the City from agreeing to substitute such self-insurance coverage for the previously Page 6 of 14 listed coverage requirements, upon proof of such self-insurance Submitted to the City. Section 4.3. Relocation of Atmos Energy Equipment. (a) If the City in constructing its sewers, streets, utilities or other public works should require any mains, pipes or other system facilities or equipment located in public right-of-way to be shifted or relocated, such mains, pipes or other system equipment shall be timely shifted or relocated by Atmos Energy at its own expense as and when required by the City. (b) When Atmos Energy is required by the City to remove or relocate its mains, laterals, and other system facilities or equipment located in public right-of-way to accommodate construction of Public Rights-of-Way or other public or City-owned facilities and Atmos Energy is eligible for reimbursement or surcharge under federal, state, county, local or other programs for reimbursement of costs and expenses incurred by Atmos Energy as a result of the ordered relocation, and the application for reimbursement or surcharge is required by statute, written governmental policies, or rules to be filed and processed by the City, the City shall make reasonable efforts to timely and promptly notify Atmos Energy of any application deadlines of which it may be aware, and Atmos Energy costs and expenses shall be included in any application by City for reimbursement, if Atmos Energy submits its costs and expense documentation to the City prior to the filing of the application. Any failure by City to notify Atmos Energy of any application deadlines or to include Atmos Energy within any reimbursement application hereunder shall not constitute a waiver of Atmos Energy's rights, if any, to seek available reimbursement under applicable law. (c) Nothing herein shall be construed to prohibit, alter or modify in any way the right of Atmos Energy to seek or recover a surcharge from customers for the cost of relocation pursuant to Section 104.112 of the Texas Utilities Code, Section 4.4, Laying of Lines in Advance of Paving. Atmos Energy shall be given sixty (60) days' written notice of the intention of the City to pave any such Public Right-of-Way and specifying the new locations for the lines. Within sixty (60) days from receipt of such notice, Atmos Energy shall initiate work and thereafter proceed in a workmanlike manner to completion of the necessary work. If Atmos Energy should fail to so proceed, and such street or alley is thereupon paved, except in an emergency, Atmos Energy shall for three (3) years thereafter not be allowed thereafter to cut such pavement or excavate in such paved street or alley for any purpose, except by written permission of the City Manager under such terms and conditions as the City Manager may prescribe. Page 7 of 14 Section 4.5. Extensions to Residential Customers. Atmos Energy shall extend an existing distribution main up to one hundred (100) feet for each single residential customer provided the potential consumption and revenue will be of such amount and permanence as to warrant the capital expenditures involved to make the investment economically feasible. Each customer of gas shall install and maintain suitable piping within his or her property lines and suitable appliances and fixtures, except meters. Section 4.6. Installation of Meters. Atmos Energy shall install upon or immediately adjacent to the premises of each customer a meter of standard type for the purpose of accurately measuring the gas consumed by such customer. If a meter is installed in or near the Public Rights-of-Way, Atmos Energy agrees to discuss with the City Engineer or his delegate the aesthetics and location of the meter placement. If agreement cannot be reached, Atmos Energy shall install standard equipment at the City Engineer's preferred location. Section 4.7. Rates. (a) Atmos Energy shall furnish reasonably adequate service to the public at reasonable rates and charges therefor; and Atmos Energy shall maintain its System in good order and condition. Such rates shall be established in accordance with all applicable statutes and ordinances. Atmos Energy shall, at all times, keep on file with the City a schedule setting forth current residential and commercial rates for natural gas and services rendered to customers within the City. Nothing contained in this ordinance, however, shall adversely affect Atmos Energy' right to apply for an increase in all or any of its rates at any tirne and from time to time during the term hereof and to a lawful and equitable decision with respect to any such application. (b) Atmos Energy shall not grant, directly or indirectly, any rebate, in the form of money or any other thing of value, to any consumer in order to circumvent the rate schedule filed with the City pursuant to this franchise agreement. (c) In addition to the rates charged for gas supplied and transported, Atmos Energy may make and enforce reasonable charges, rules and regulations for service rendered in the conduct of its business in accordance with its tariffs, rate schedules, service policies, and Quality of Service Rules as approved by the City and filed with the Railroad Commission of Texas. Atmos Energy may require, before furnishing service, the execution of a contract for such service. (d) Atmos Energy shall be entitled to require each and every residential customer of gas, before gas service is commenced or reinstated, to satisfactorily establish credit pursuant to Atmos Energy's Quality of Service Rules as may be in effect during the term of this franchise. Said deposit shall be retained and refunded in accordance with such Quality of Page 8 of 14 Service Rules and shall bear interest, as provided by applicable law. Upon termination of service, Atmos Energy shall be entitled to apply said deposit, with accrued interest, to any indebtedness owed Atmos Energy by the customer making the deposit. (e) Atmos Energy shall have the right to contract with each customer with reference to the installation of, and payment for, any and all of the gas piping and/or meters from the connection thereof with Atmos Energy's main in the right-of-way to and throughout the customer's premises. Atmos Energy shall own, operate and maintain all service lines, which are defined as the supply lines extending from Atmos Energy's main to the customer's meter where gas is measured by Atmos Energy, The customer shall own, operate, and maintain all yard lines and house piping, which are defined as supply lines extending from the point of connection with Atmos Energy's customer meter where gas is measured to the point of connection with customer's house piping. Section 4.8. Maps of Gas System. Atmos Energy shall have available a map or maps showing the current location of all pipelines and other components of Atmos Energy's natural gas distribution facilities located in the City. Section 4.9. Removal of Gas System and Bond for Removal, Atmos Energy may remove all or any portion of the gas system upon the termination by the City, pursuant to this ordinance, of the franchise and rights granted hereby. Atmos Energy shall, upon electing to remove all or any portion of the gas system in accordance with this ordinance, file with the Secretary of the City a bond in a reasonable amount and with a proper and adequate surety, securing Atmos Energy's obligation to promptly repair, at Atmos Energy's sole expense, any damage to any real property owned or controlled by the City caused by Atmos Energy' removal of all or any portion of the gas system and to restore such property to substantially the same condition it was in immediately prior to the inci- dent causing such damage. ARTICLE V RIGHTS OF THE CITY Section 5.1. Reservation of Rights: General. (a) The City reserves to itself the right and power at all times to exercise, in the interest of the public and in accordance with state law, regulation and control of Atmos Energy's rates and services to insure the rendering of efficient public service at reasonable rates. (b) The rights, privileges, and franchises granted by this ordinance are not to be considered exclusive, and City hereby expressly reserves the right to grant, at any time, like privileges, rights, and franchises as it may see fit to any other person or corporation for the purpose of furnishing gas for light, heat, and power and for City and the inhabitants thereof. Page 9 of 14 (c) City expressly reserves the right to own and/or operate its own system for the purpose of transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof. Section 5.2. Right to Indemnification-, Right to be Held Harmless. Atmos Energy shall indemnify, defend and hold harmless the City and all of its present, future and former agents, employees, officials and representatives in their official, individual and representative capacities from and against any and all liability created by, arising from or in any manner relating to the construction, operation, maintenance, repair or replacement of Atmos Energy's System and facilities or the use of the Public Rights-of- Way or in any way growing out of the granting of this franchise, either directly or indirectly, or by reason of any act, negligence, or nonfeasance of the contractors, agents or employees of Atmos Energy. As used herein, the term "liability" includes, but is not limited to, any and all claims, demands, causes of action,judgments, liens, and expenses (including attorney's fees, whether contractual or statutory), costs and damages (whether common law or statutory, and whether actual, punitive, consequential or incidental) of any conceivable character, due to or arising from injuries to persons (including death) or to property (both real and personal), The indemnity provided herein expressly includes any liability arising through the doctrines of strict or products liability and any liability arising under the constitutions of the United States or Texas. Upon the commencement of any suit or proceeding at law against the City relating to or covering any matter covered by this indemnity, the City shall tender the defense of said suit or proceeding at law to Atmos Energy, and Atmos Energy shall thereupon at its own cost and expense defend, compromise, or settle the same. Any settlement involving a claim or cause of action against the City shall, unless otherwise agreed to by the City, release the City from any and all liability as a result of said claim or cause of action. This indemnity and hold harmless agreement shall not apply to any situation to the extent the city is liable for the actions, suits or claims of injury or damage by reason of City's negligence. Section 5.3. Right to Renegotiation. If either City or Atmos Energy requests renegotiation of any term of this fTanchise ordinance, Atmos Energy and City agree to renegotiate in good faith revisions to any and all terms of this franchise ordinance. If the parties cannot come to agreement upon any provisions being renegotiated, then the existing provisions of the franchise ordinance will continue in effect for the remaining term of the franchise. Section 5.4. Right to Use of Streets. The right of Atmos Energy hereunder to use any streets, roads, highways, alleys, public ways, and other real property owned or controlled by the City shall in no way affect the right of the City or its agents to maintain, construct, lay, repair, remove, replace, install, or operate any pavement, curbs, gutters, or underground wires, cables, or water or sewer pipes owned by the City and located on or near Such streets, roads, highways, alleys, public ways, and other real property. Section 5.5. Inspection of Books and Records. City may, if it sees fit, have the books and records of Ati-nos Energy examined by a representative of said City to ascertain the correctness of the sworn reports agreed to be filed herein. If such an examination reveals Atmos Energy has underpaid the City, then upon receipt of written Page 10 of 14 notification from City regarding the existence of such underpayment, Atmos Energy shall immediately remit the amount of underpayment to City. To the extent that the underpayment is greater than three (3) percent of the franchise fee payment made, Atmos Energy is responsible for reimbursing the City for the costs of the audit. ARTICLE VI REMEDIES UPON DEFAULT BY ATMOS ENERGY Section 6.1. Termination of Franchise and Rights. (a) In addition to any rights set out elsewhere in this ordinance, the City reserves the right to terminate the franchise and all rights and privileges pertaining thereto, in the event that Atmos Energy violates any material provision of the franchise or Atmos Energy becomes insolvent, or is adjudged bankrupt. (b) Procedures for Termination. (1) "I'he City may, at any time, terminate this franchise for a continuing material violation by Atmos Energy of any of the substantial terms hereof. In such event, the City shall give to Atmos Energy written notice, specifying all grounds on which termination or forfeiture is claimed, by registered mail, addressed and delivered to Atmos Energy at the address set forth in Section 7 hereof. Atmos Energy shall have sixty (60) days after the receipt of such notice within which to cease such violation and comply with the terms and provisions hereof. In the event Atmos Energy fails to cease such violation or otherwise comply with the terms hereof, then Atmos Energy's franchise is subject to termination under the following provisions. Provided, however, that, if Atmos Energy commences work or other efforts to cure such violations within thirty (30) days after receipt of written notice and shall thereafter prosecute such curative work with reasonable diligence until such curative work is completed, then such violations shall cease to exist, and the franchise will not be terminated. (2) Termination shall be declared only by written decision of the City Council after an appropriate public proceeding whereby Atmos Energy is afforded the full opportunity to be heard and to respond to any such notice of violation or failure to comply. Atmos Energy shall be provided at least ten (10) days prior written notice of any public hearing concerning the termination of the franchise. In addition, ten (10) days notice by publication shall be given of the date, time and place of any public hearing to interested members of the public, which notice shall be paid for by Atmos Energy. (3) 'rhe City, after full public hearing, and upon finding material violation or failure to comply, may terminate the franchise or excuse the Page I I of 14 violation or failure to comply, upon a showing by Atmos Energy of mitigating circumstances or upon a showing of good cause of said violation or failure to comply as may be determined by the City Council. (4) Nothing herein stated shall prevent the City from seeking to compel compliance by suit in any court of competent jurisdiction if Atmos Energy fails to comply with the terms of this franchise after due notice and the providing of adequate time for Atmos Energy to comply with said terms. ARTICLE VII SPECIFIC PROVISIONS APPLICABLE TO MUNICIPAL HILL, PLANT PIPELINE Section 7.1. Grounds. For purposes of this Article VII, the Grounds, as that term is used herein, shall mean and refer to the public grounds of the City of Lubbock, Texas, along the route described upon and depicted in Exhibit "A" attached hereto and incorporated herein. The privileges granted to Atmos Energy by the terms of this Ordinance shall extend to the Grounds to the extent, and only to the extent, of the route of the natural gas pipeline described on Exhibit "A" attached hereto, and shall not extend to any other grounds (other than present and/or future streets, highways, alleys and public ways as elsewhere described in this Ordinance) of the City of Lubbock. The parties hereto expressly agree and stipulate that the route described on Exhibit "A" hereto constitutes the paramount use of the Grounds. Except as otherwise provided in this Article V11, whenever the terms "streets", "roads", "highways", "alleys" and/or "public ways" are used in this Ordinance, the Grounds shall also be deerned to be included therewith. Section 7.2. Use of Grounds. Except for emergencies, on or before fifteen (15) days prior to any activities of Atmos Energy upon the Grounds relating to construction, maintenance and/or operation, of any kind or type, of the gas pipeline described on Exhibit "A", Atmos Energy shall submit, in writing, the plans and specifications for such construction, maintenance and operation activities to the Director of Electric Utilities ("Director") at (806) 775-2500, 916 Texas Avenue, of the City of Lubbock. The City shall review all plans submitted hereunder and provide to Atmos Energy, in writing, any required changes or corrections that must be made that City may deem necessary, in its sole reasonable discretion. Any required changes, amendments, modifications or corrections shall be made and the plans resubmitted to the Director prior to the commencement of such construction, maintenance and/or operation activity. Except for emergencies, no such construction, maintenance and/or operation activity shall commence unless and until the plans are finally approved by the City. Any and all construction, maintenance and operation activities upon the Grounds shall be conducted in a reasonable and prudent manner. Not later than five (5) calendar days subsequent to such activities, and to the extent that same disturb the surface of the Grounds, in any way, manner or Page 12 of 14 form, Atmos Energy shall restore the Grounds to the identical condition as prior to such activities. The requirements of this Section 7.2 shall be limited in scope to the subject matter of this Article VII and shall apply only to the activities of Atmos Energy which specifically relate to construction, maintenance and/or operations of those portions of the gas pipeline which are located on the Grounds of the City as herein described. Section 7.3. No Assumption of Liability by City. The City shall have the right at all times to observe any and all activities of Atmos Energy as described in Section 7.2 of this Ordinance. Notwithstanding the approval of City of any plans and/or the observation rights of the City, the City assumes no liability or responsibility for the engineering design and/or defect or failure of any kind, manner or form regarding such activities, nor shall such approval and/or observations rights relieve Atmos Energy from any of its obligations hereunder. ARTICLE VIII GENERAL PROVISIONS Section 8.1. Force Majeure. Notwithstanding anything expressly or impliedly to the contrary contained herein, in the event Atmos Energy is prevented, wholly or partially, from complying with any obligation or undertaking contained herein by reason of any event of force majeure, then, while so prevented, compliance with such obligations or undertakings shall be suspended, and the time during which Atmos Energy is so prevented shall not be counted against Atmos Energy for any reason. The terror "force maieure," as used herein, shall mean any cause not reasonably within Atmos Energy' control and includes, but is not limited to, acts of God, strikes, lock-outs, wars, riots, orders or decrees of any lawfully constituted federal, state, or local body, contagions or contaminations hazardous to human life or health, fires, storms, floods, wash-outs, explosions, breakages or accidents to machinery or lines of pipe, inability to obtain or the delay in obtaining rights-of-way, materials, supplies, or labor permits, temporary failures of gas supply, or necessary repair, maintenance, or replacement of facilities used in the performance of the obligations contained in this ordinance. Section 8.2. Other Ordinances. Except to the extent otherwise expressly provided herein, the franchise and rights granted hereby and the operations and activities perf'ori-ned by Atmos Energy pursuant hereto shall be subject to all valid ordinances and regulations of the City and any valid amendments thereto insofar as, and only insofar as, such ordinances and regulations (i) do not shorten the term hereof or terminate, abrogate, or materially and adversely affect the franchise and rights granted to Atmos Energy hereby or (ii) do not conflict with or are not inconsistent with the terms and provisions contained in this ordinance, such conflicting or inconsistent ordinances hereby being repealed to the extent of such conflict or inconsistency. Section 8.3. Conflicting Franchises. If Atmos Energy, in laying its pipes, shall come into conflict with the rights of any other person or corporation having a franchise from the City, the City Council shall decide all questions concerning the conflicting rights of the respective parties, and shall determine the location of the structures of the Page 13 of 14 said parties and what shall reconcile their differences. Atmos Energy records shall be available to City for review and inspection for compliance with this franchise at reasonable times and upon reasonable notice. Section 8.4. Amendments. This ordinance and the franchise and rights granted herein may be amended only by written agreement of the City and Atmos Energy to such amendment, which amendment shall be published in the same form and manner as the original franchise. Section 8.5. SeverqWlily. In the event any part of this ordinance is determined to be invalid or illegal for any reason whatsoever, such invalidity or illegality shall not affect the validity or legality of this ordinance as a whole or of any part hereof. Section 8.6. Binding Effect. This ordinance shall extend to, be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. Section 8.7. Effective Date. This ordinance shall become effective thirty (30) days from the date of the last publication of three required by Chapter 1, Article 11, Section 18, of the City of Lubbock Charter at the expense of the utility and Atmos Energy shall file with the Secretary of the City a letter stating that Atmos Energy accepts this ordinance as adopted and agrees to comply with and be bound by all of the terms and conditions hereof. A true and correct copy of this ordinance as finally adopted shall be attached to such letter and by reference made a part thereof, and the letter shall be addressed to the Mayor and the governing body of the City, dated, and executed by an authorized officer of Atmos Energy. Upon this ordinance becoming effective, this ordinance shall supersede any and all prior ordinances of the City, including but not limited to Ordinance Nos, 2004-00024, 9194 and 9194-A, regarding the subject matter of this ordinance. Section 8.8. Section and Other Headings. The section and other headings contained in this ordinance are for reference purposes only and shall not affect in any way the meaning or interpretation of this ordinance. Page 14 of 14 AND ITIS SO ORDERED Passed by the City Council on first reading on F-,bruary 25, 2019 Passed by the City Council on second reading on March 12, 2019 DANIEL M. POPE, MAYOR ATTEST: Reb,eca Garza City cc,"cxetary APPROVED AS TO CONTENT: D. gru KosteVich Chief Financial Officer APPROVED AS TO FORM: Amy s D — uty City Attorney