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HomeMy WebLinkAboutAgenda Item Summary FormAGENDA ITEM SUMMARY FORM Second Reading rd a [a 1 IN23S,16"i! Date: 01/07/2021 Requesting Department: Department of Resilience and Public Works Commission Meeting Date: 06/10/2021 Sponsored By: Jeffrey Watson Type: Ordinance District Impacted: All Subject: Non -Exclusive Natural Gas Franchise Agreement - TECO Natural Gas PURPOSE OF ITEM: The City Commission of the City of Miami, Florida recognizes that the City and its citizens need and desire the benefits of a natural gas franchise. Peoples Gas System has been designated by the Florida Public Service Commission ("FPSC") to serve an area which encompasses the territorial boundaries of the City. Both Peoples Gas System and the City of Miami desires to enter an agreement providing for the payment of fees to the City in exchange for the non-exclusive right for the Company's use of the right-of-way within certain areas of the City, pursuant to certain terms and conditions. The City Commission of the City of Miami deems it to be in the best interest of the City and its citizens to grant this Franchise and pass this Ordinance which will serve as the Franchise Agreement. BACKGROUND INFORMATION: An Ordinance of the Miami City Commission granting to Peoples Gas System, a division of Tampa Electric Company, its successors and assigns, a non-exclusive natural gas franchise agreement to use the public rights of way of the City of Miami, Florida, and imposing provisions and conditions relating thereto; providing for payments to the City of Miami during a term of twenty (20) years from the effective date of this ordinance; provided, however, that the franchise will automatically renew for one ten (10) year term; containing a severability clause and providing for an effective date; and repealing prior ordinance. Previous franchise agreement, Ordinance 10935, granted People's Gas System, Incorporated, a 15-year term with a renewal option for three (3) five (5) year periods a non-exclusive, privilege or franchise right to erect, install, extend, maintain and operate a system of works, pipes, pipe lines and all necessary apparatus, machinery, structures, and appurtenances, as provided herein, on and under the streets, alleys, avenues, easements, and other public ways and places in the City. Budget Impact Analysis Item is Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: N/A City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 Reviewed By City Commission Nicole Ewan Department of Resilience and Public Works Review Completed 02/19/2021 4:49 PM Office of Management and Budget Donovan Dawson Office of Management and Budget Leon P Michel City Manager's Office Nzeribe Ihekwaba City Manager's Office Arthur Noriega V Legislative Division Valentin J Alvarez Office of the City Attorney Jihan Soliman Office of the City Attorney Barnaby L. Min City Commission Nicole Ewan Legislative Division Valentin J Alvarez Office of the City Attorney Jihan Soliman Office of the City Attorney Barnaby L. Min City Commission Todd B. Hannon City Commission Nicole Ewan Office of the Mayor Mayor's Office Office of the City Clerk City Clerk's Office Office of the City Clerk City Clerk's Office Office of the City Attorney Victoria Mendez Meeting Completed 02/11/20219:00AM Juvenal Santana Department Head Budget Analyst Review Completed 03/26/2021 10:21 AM Budget Review Completed 03/28/2021 9:17 PM Assistant City Manager Review Completed 03/29/2021 11:12 AM City Manager Review Completed 03/30/2021 2:19 PM Legislative Division Review Completed 04/13/2021 9:19 PM ACA Review Completed 04/13/2021 9:26 PM Deputy Attorney Review Completed 04/13/2021 11:37 PM Meeting Completed 04/22/2021 9:00 AM Legislative Division Review Completed 05/12/2021 7:27 AM ACA Review Completed 05/18/2021 7:27 PM Deputy Attorney Review Completed 05/18/2021 8:48 PM Meeting Completed 05/27/2021 9:00 AM Meeting Completed 06/10/2021 9:00 AM Unsigned by the Mayor Completed 06/22/2021 5:23 PM Signed and Attested by the City Clerk Completed 06/22/2021 5:30 PM Rendered Completed 06/22/2021 5:30 PM Approved Form and Correctness Completed 06/11/2021 11:17 AM City of Miami File ID: 8454 (Revision: A) Printed On: 612312021 - City of Miami City Hall Legislation 3500 Pan American Drive Miami, FL 33133 Ordinance www.miamigov.com Enactment Number:14003 File Number: 8454 Final Action Date: 6/10/2021 AN ORDINANCE OF THE MIAMI CITY COMMISSION GRANTING TO PEOPLES GAS SYSTEM, A DIVISION OF TAMPA ELECTRIC COMPANY, ITS SUCCESSORS, AND ASSIGNS A NON-EXCLUSIVE NATURAL GAS FRANCHISE AGREEMENT TO USE THE PUBLIC RIGHTS OF WAY OF THE CITY OF MIAMI ("CITY") AND IMPOSING PROVISIONS AND CONDITIONS RELATING THERETO; PROVIDING FOR PAYMENTS TO THE CITY DURING A TERM OF TWENTY (20) YEARS; CONTAINING A SEVERABILITY CLAUSE; PROVIDING FOR AN EFFECTIVE DATE; AND REPEALING PRIOR ORDINANCE. WHEREAS, the City of Miami is a Florida municipal Corporation ("City") and recognizes that the City and its residents need and desire the benefits of a natural gas franchise; and WHEREAS, Peoples Gas System, a division of Tampa Electric Company ("Company"), has been designated by the Florida Public Service Commission to serve an area which encompasses the territorial boundaries of the City; and WHEREAS, the Company and the City mutually desire to enter into an agreement providing for the payment of fees to the City in exchange for the non-exclusive right for the Company's use of the right-of-way within certain areas of the City pursuant to certain terms and conditions; and WHEREAS, the City Commission deems it to be in the best interest of the City and its residents to grant the Company the non-exclusive right to the use certain City rights -of -way and adopt this Ordinance which will serve as the Franchise Agreement; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1: The recitals and findings contained in the Preamble to this Ordinance are adopted and incorporated as if fully set forth in this Section. Section 2: DEFINITIONS For the purposes of this Franchise Agreement, the following terms shall have the following meaning. A. "City" means the City of Miami, a municipal corporation of the State of Florida. B. "Customer" shall mean any Person served by the Company within the corporate limits of the City. C. "Company" shall mean Peoples Gas System, a division of Tampa Electric Company, a Florida corporation, its successors, and assigns. D. "Franchise Agreement" shall mean this non-exclusive franchise agreement as contained in this Ordinance, as it may hereinafter be amended or supplemented. City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 E. "Distribution System" shall mean any and all transmission pipe lines, main pipe lines, and service lines, together with all tubes, traps, vents, vaults, manholes, meters, gauges, regulators, valves, conduits, attachments, structures, and other appurtenances, as are used or useful in the sale, distribution, transportation, or delivery of Natural Gas and as are situated within the corporate limits of the City. F. "Effective Date" shall mean the date this Franchise Agreement becomes effective as described in Section 22 below. G. "FPSC" shall mean the Florida Public Service Commission or any successor agency. H. "Gross Revenues" shall mean all revenues (as defined by the FPSC) received by the Company from any Customer from the sale, distribution, transportation, or delivery of Gas. I. "Person" shall mean any individual, firm, partnership, estate, corporation, company, or other entity, including, but not limited to, any government entity. J. "Natural Gas" or "Gas" shall mean natural gas, manufactured gas, and/or a mixture of gases which is distributed in pipes and measured by meter on the Customer's premise. It shall not mean propane gas or liquefied petroleum gas (commonly referred to as "bottled gas"). K. "Right-of-way" means any street, road, lane, highway, avenue, boulevard, alley, waterway, bridge, easement, public place, or other right-of-way that is controlled by the City. Section 3: GRANT The City hereby grants to the Company for a period of twenty (20) years from the Effective Date the non-exclusive right, privilege, and franchise to lay, erect, construct, operate, and maintain in, on, or under any and all Rights -of -way, as they now exist or may be hereafter constructed, opened, laid out, or extended within the present incorporated limits of the City, or in such territory as may be hereafter added, annexed to, or consolidated with the City, a Distribution System subject to the terms and conditions herein contained. Section 4: TERM Except as provided in Section 17, the Franchise hereby granted shall be for a period of twenty (20) years from the Effective Date; provided, however, that the Franchise will automatically renew for one (1) ten (10) year term, unless one (1) of the parties notifies the other with no less than one hundred eighty (180) days' written notice prior to the expiration of the initial term that it does not want the Franchise to automatically renew. If either party elects not to renew the Franchise, then the Franchise shall expire upon the conclusion of the initial term. Section 5: ASSIGNMENT The Franchise hereby granted shall not be leased, assigned, or otherwise alienated, conveyed, or disposed of except with the prior express written consent of the City, which shall not be unreasonably withheld or unduly delayed. No assignment shall be allowed without the assignee assuming the terms of the Franchise Agreement in a signed document with the City in a form and manner reasonably acceptable to the City Manager and City Attorney, respectively. Notwithstanding the foregoing, the Company may, without the consent of the City, lease, assign, or otherwise alienate and transfer this Franchise in connection with the lease or sale of the Distribution System or upon its merger or consolidation with, or transfer to, a corporation engaged in similar business (including an affiliate or subsidiary of the Company), or pledge or City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 mortgage of such Franchise in connection with the physical property owned and used by it in the operation of the Distribution System for the purpose of securing payment of monies borrowed by the Company. The obligations of this Franchise shall survive any lease, assignment, alienation, or transfer of this Franchise and be binding on successors to the Company. Section 6: CITY COVENANT As further consideration for this Franchise Agreement, the City covenants and agrees that it will not, during the term of this Franchise Agreement or any extension thereof, engage in the business of distributing or selling Natural Gas within the corporate limits of the City, as modified, during the term of this Franchise Agreement. Section 7: USE OF STREETS (A) The Distribution System shall be erected, placed, or laid in such manner as will, consistent with necessity, least interfere with other public uses of the Rights -of -way and said Rights -of -way shall not be unnecessarily obstructed and before, except in an emergency situation, the Company makes any excavation or disturbs the surface of any of the Rights -of - way, it shall make application for a permit to the appropriate City authority. The Company shall, with due diligence and dispatch, place such Rights -of -way in as good a condition or better as before such excavation or disturbance was made; provided, however, that should the Company fail within ten (10) days of its receipt of written notice from the City to restore such Rights -of - way, then the City may undertake such restoration (other than any restoration work on the Distribution System) and charge the reasonable cost thereof to the Company. In the event the City creates a utility tunnel in any Right-of-way, it may be used by the Company, space permitting. To the extent consistent with Florida law, federal law, and all applicable regulations, the Company hereby agrees to abide by all the rules, regulations, and ordinances which the City has passed or might pass in the future in the exercise of its police powers and further agrees to abide by any established policy which the City or its duly authorized representative has passed, established, or will establish in the exercise of its police powers; provided, however, that the City shall not pass any ordinance or regulation that results in a material change in the rights or obligations of the Company under the Franchise Agreement. Should the City attempt to vacate any Right-of-way after the Effective Date of this Franchise, the Company agrees it reserves no right in the continued placement of any portion of its Distribution System in said Right-of-way and that if consulted as part of such a process to vacate a Right-of-way, its consent thereto shall not be unreasonably withheld; provided, however, that the City and the Company shall cooperate to find a suitable alternative Right-of-way such that the Company can continue to serve any Customers that would be affected by the proposed changes to the placement of the Distribution System. (B) The Distribution System of the Company shall be installed, located, or relocated so as to not unreasonably interfere with traffic over the Rights -of -way or with reasonable egress from and ingress to abutting property. To avoid conflicts with vehicular traffic ("Traffic"), the location or relocation of all facilities or Distribution System shall be made as representatives of the City may prescribe in accordance with the City's reasonable rules and regulations with reference to the placing and maintaining in, under, upon, along, over, and across said Rights -of - way; provided, however, that such rules or regulations (i) shall not prohibit the exercise of the Company's right to use said Rights -of -way for reasons other than unreasonable interference with Traffic, (ii) shall not unreasonably interfere with the Company's ability to furnish sufficient, adequate, and efficient service to all of its customers, and (iii) shall not require the relocation of any of the Company's facilities or Distribution System installed before or after the Effective Date City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 in Rights -of -way unless or until widening or otherwise changing the configuration of the paved portion of any Right-of-way used by motor vehicles causes such installed facilities or Distribution System to unreasonably interfere with Traffic. Such rules and regulations shall recognize that above -grade facilities or Distribution System of the Company installed after the Effective Date should be installed near the outer boundaries of the Rights -of -way to the extent possible and practicable. When any portion of a Right-of-way is excavated by the Company in the location or relocation of any of its facilities or Distribution System, the portion of the Right-of-way so excavated shall within a reasonable time be placed by Company at its expense in as good a condition or better as before such excavation or disturbance was made. The City shall not be liable to the Company for any cost or expense in connection with any relocation of the Company's facilities or Distribution System required under subsection (B)(iii) of this Section, except, however, the Company shall be entitled to reimbursement of its costs as is provided by law and reimbursement of its costs from others, excluding the City. Section 8: MAINTENANCE All such components of the Distribution System of the Company located within the City shall be installed and maintained by the Company in accordance with accepted good practice and in accordance with the orders, rules, and regulations of the FPSC. Section 9: LAYING OF PIPE All components of the Distribution System shall be laid consistent with all applicable codes, rules, regulations, and laws, including, to the extent consistent with all applicable codes, rules, regulations, and laws, specifications contained in City permits. Section 10: CONSTRUCTION WORK The City reserves the right to permit to be laid electric conduits, water and gas pipes, and lines, cables, and sewers and to do and permit to be done any underground work that may be deemed necessary or proper by the City in, across, along, or under any Right—of-way. Whenever by reason of establishing a grade or by reason of changes in the grade of any Right- of-way, or by reason of the widening, grading, paving, or otherwise improving present or future Rights -of -way, or in the location or manner of construction of any water pipes, electric conduits, sewers, or other underground structure located within the Rights -of -way, it shall be deemed necessary by the City to remove, relocate, or disconnect any portion of the Distribution System of the Company hereto for such public purpose, such removal, relocation, or disconnection shall be made by the Company as ordered in writing by the City without claim for reimbursement. If the City shall require the Company to remove, relocate, or disconnect any portion of its Distribution System or in any way to alter the placement or location of the Distribution System, to enable any other Person to use said Rights -of -way of the City, as part of its permitting or approval process, the City shall require the Person desiring or occasioning such removal, relocation, disconnection, or alteration to reimburse the Company for any loss, cost, or expense caused by or arising out of such removal, relocation, disconnection, or alteration of any portion of the Distribution System. The Company further agrees that it will not intentionally interfere with, change, or injure any water pipes, drains, storm sewers, or sanitary sewers of the City unless it has received specific permission from the City or its duly authorized representative. Section 11: FRANCHISE FEE (A) Within thirty (30) days after the close of the first full billing month following the Effective Date and each month thereafter during the term of this Franchise Agreement, the Company, its successors, or assigns shall pay to the City or its successors a sum of money equal to six percent (6%) of the Company's Gross Revenue, less any adjustments for City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 uncollectable accounts, from the sale, distribution, transportation, or delivery of Natural Gas to Customers within the corporate limits of the City. The franchise fee payment shall be deemed paid on time if post -marked within thirty (30) days of the close of the preceding billing month. (i) Each monthly franchise fee payment shall be accompanied by a statement clearly showing the Gross Revenues of the Company, certified by a representative of the Company having the requisite knowledge to produce such a statement. (ii) If any franchise fee payment is not made on or before the applicable dates specified above, interest shall be charged from the date due at the annual rate of two percent (2%) over Prime Rate (as published in the Wall Street Journal) computed daily. (B) In the event the Company enters into a franchise agreement with another Florida municipality or government entity located in Palm Beach County, Broward County, Miami -Dade County, or Monroe County that contains substantially similar terms and conditions as this Franchise Agreement and that provides for a franchise fee calculation that would result in a franchise fee being paid to such municipality or government entity that is higher than that promised hereunder, then the City may, at its option, demand that the franchise fee payable hereunder be adjusted so as to be consistent with the franchise fee calculation extended to such Florida municipality or government entity; such increase in the franchise fee shall apply prospectively beginning with the next monthly franchise fee payment following the Company's receipt of a written notice from the City exercising its right to increase the franchise fee as provided herein. Section 12: IDENTIFICATION OF CITY RESIDENTS No less than thirty (30) days prior to the Effective Date, the City shall deliver to the Company such information (including City limit streets and block numbers) as is needed by the Company to determine which of its customer are located within the City's limits. The City shall also provide such information no less than thirty (30) days prior to the effectiveness of any change in said limits, whether by addition, annexation, or consolidation, or upon the Company's request. The Company shall be relieved of any obligation to pay franchise fees to the extent the City has failed to provide information in accordance with this Section. Section 13: ACCOUNTS AND RECORDS The Company shall maintain accounting, maintenance, and construction records as prescribed by the FPSC. The Company shall establish and maintain appropriate accounts and records in such detail that revenues within the corporate limits of the City are consistently declared separately from all other revenues and such records shall be maintained within the State of Florida ("State"). Section 14: AUDIT AND INSPECTION The City may, upon reasonable notice and not during another scheduled Company franchise audit, at the City's expense, examine the records of the Company relating to the calculation of the franchise payment for the year preceding such anniversary date. Such examination shall be during normal business hours at the Company's office where such records are maintained. Records not prepared by the Company in the ordinary course of business may be provided at the City's expense and as the City and the Company may agree in writing. Information identifying the Company's customers by name or their consumption shall not be taken from the Company's premises. Such audit shall be impartial and all audit findings, whether they decrease or increase payment to the City, shall be reported to the Company. The City's right to examine the records of the Company in accordance with this Section shall not be City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 conducted by any third party employed by the City whose fee, in whole or part, for conducting such audit is contingent on findings of the audit. The City will maintain the confidentiality of the Company's confidential documents. The City will be given access to confidential documents while on the Company's premises but shall not remove those confidential documents from the Company's premises unless expressly authorized to do so by the Company. Information relative to this audit and likely to be deemed confidential by the Company includes, but is not limited to, nonpublic customer or customer account information, nonpublic policies and procedures, and any other nonpublic information that gives the disclosure of which could harm the competitive position of the Company. Section 15: INSURANCE During the term of this Franchise, the Company shall keep in full force and effect at all times during the effective period hereof insurance certificates in accordance to Exhibit "A". The coverage requirements set forth in this Section may be satisfied, in whole or in part, with self- insurance. The Company shall give notice to the City of any material alteration, modification, or any cancellation of a policy. At the time of its acceptance of the terms and conditions of this Ordinance as provided herein, the Company shall file with the City Clerk, after approval by the City Attorney, an annual bond in the minimum sum of $500,000.00 having as surety thereon a surety company qualified to do business in the State, acceptable to the City, and conditioned for the full and faithful performance by the Company of all requirements, duties, and obligations imposed upon it by the provisions of this Ordinance. Such bond shall be furnished annually and shall provide a continuing guarantee of such full and faithful performance at all times throughout the effective period hereof. Section 16: INDEMNIFICATION The City shall in no way be liable or responsible for any accident or damage that may occur in the construction, operation, or maintenance by the Company of its facilities or Distribution System hereunder, regardless of other easement agreements that may be or have been executed by the parties to this Franchise without hold harmless and indemnification provisions and the acceptance of this Ordinance shall be deemed an agreement on the part of the Company to indemnify and defend the City and hold the City, its officials, employees, and assigns harmless against any and all liability, loss, cost, damage, judgment, decree, action, cause of action, claim, or expense which may accrue to the City to the extent caused by the Company's installation, removal, relocation, sub -lease, construction, operation, or maintenance of its facilities or Distribution System that results in personal injury, loss of life, or damage, loss, or destruction of or damage to property sustained by any person or entity. Notwithstanding any provision herein to the contrary, the Company's liability under this Franchise Agreement shall be limited to the assets and business of Peoples Gas System, a division of Tampa Electric Company, as if Peoples Gas System was incorporated separate and apart from Tampa Electric Company. Section 17: TERMINATION BY CITY (A) Violation by the Company of any of the covenants, terms, and conditions hereof, or default by the Company in observing or carrying into effect any of said covenants, terms, and conditions shall authorize and empower the City to declare a termination of this Franchise Agreement; provided, however, that before such action by the City shall become operative and effective. the Company shall have been served by the City with a written notice settina forth all City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 matters pertinent to such violation or default describing the action of the City with respect thereto and the Company shall have had a period of sixty (60) days after such notice, or, in the event such cure reasonably requires a period of more than sixty (60) days, sixty (60) days to present a plan, reasonably satisfactory to the City, to effect such cure; and provided further that any violation or default resulting from a strike, a lockout, an act of God, or any other cause beyond the control of the Company shall not constitute grounds for termination. Section 18: MODIFICATIONS OR AMENDMENTS It is understood that no modification, amendment, or alteration in the terms or conditions contained herein shall be effective unless contained in a written document executed with the same formality and of equal dignity herewith and approved by the City Commission after a public meeting. Section 19: SEVERABILITY; CHANGE IN LAW (A) If any section, part of a section, paragraph, sentence, or clause of this Ordinance shall be adjudged by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of any other portion hereof but shall be restricted and limited in its operation and effect to that specific portion hereof involved in the controversy in which such decision shall have been rendered; provided, however, that should elimination of the specific portion of the Franchise Agreement adjudged to be invalid results in significant adverse consequences to a party, then that party may terminate this Franchise Agreement by providing thirty (30) days written notice to the other party. (B) Upon the issuance by a court of competent jurisdiction of an order, ruling, or decision or the enactment or adoption by the Florida Legislature, the City, or any other governmental or regulatory body of a law, rule, regulation, or ordinance that materially diminishes a municipality's ability to exact franchise fees from a utility or that effectively does away with the ability of a municipality to grant a franchise altogether, then the Company or the City may terminate this Franchise Agreement by providing ninety (90) days written notice to the other party. Section 20: GOVERNING LAW; VENUE; ATTORNEYS' FEES This Franchise Agreement shall be governed by the laws of the State and applicable federal law. The parties agree that venue in all actions, claims, or proceedings shall lie in courts of competent jurisdiction in Miami -Dade County, Florida. Each party shall bear its own respective attorneys' fees. Section 21: COMPLIANCE WITH LAWS The Company hereby acknowledges and agrees that the Company's compliance with all applicable Federal, State, and local laws, ordinances, codes, rules, and regulations is a condition of this Franchise Agreement. Section 22: EFFECTIVE DATE This Ordinance and the Franchise Agreement shall become effective upon its acceptance by the Company, which acceptance must be evidenced in writing within sixty (60) days of the City's approval and adoption hereof.' ' This Ordinance shall become effective as specified herein unless vetoed by the Mayor within ten (10) days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall become City of Miami File ID: 8454 (Revision: A) Printed On: 6/23/2021 APPROVED AS TO FORM AND CORRECTNESS: ria i dez, ity ttor �ey 611112021 effective immediately upon override of the veto by the City Commission or upon the effective date stated herein. whichever is later. City of Miami File ID: 8454 (Revision: A) Printed On: 612312021