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Utility Franchise Agre Maquoket D~ ~~~ MEMORANDUM March 29, 2004 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Utility Franchise Agreement with Maquoketa Valley Electric Cooperative Finance Director Ken TeKippe is recommending City Council approval of an Ordinance approving a Franchise Agreement with Maquoketa Valley Electric CoClperative. The Franchise Agreement Ordinance is very similar to the Franchise Agreement Ordinances now in effect with Aquila and Alliant Energy. A two percent franchise fee, effective on billings after May 1, 2004, is included in the ordinance. This is the same fee that applies to Alliant Energy and Aquila. A simple majority vote is required to adopt the Ordinance or to amend the franchise fee. I concur with the recommendation and respectfully request Mayor and City Council approval. /VLJi &~/4 Michael C. Van Milligen " MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Ken TeKippe, Finance Director CITY OF DUBUQUE, IOWA MEMORANDUM FROM: Michael C. Van Milligen, City Manager Ken TeKippe, Finance Director 7L (f';¿?c:;¡eþ TO: SUBJECT: Franchise Agreement with Maquoketa Valley Electric Cooperative DATE: March 16,2004 Last year, we learned that Maquoketa Valley Electric Cooperative (MVEC) was operating in the City of Dubuque right of way without any authority from the City. MVEC currently has approximately 210 members (customers) who are served within the City limits. The members are located in areas annexed by the City of Dubuque in recent years. Their largest customers are Wal-Mart and Lowe's with the vast majority of customers being residential. Cartegraph, which is located in the City Technology Park, is also serviced by MVEC. Corporation Counsel Barry Lindahl and I have worked with James Lauzon, CEO/Executive Vice President of MVEC and their legal counsel to arrive at a franchise agreement betWeen the City of Dubuque and Maquoketa Valley Electric Cooperative. A proposed franchise ordinance, approved and executed by MVEC, is enclosed, as well as a letter from Mr. Lauzon. The franchise ordinance with MVEC is very similar to the franchise ordinances with Aquila and Alliant Energy. A two percent franchise fee, effective May 1, 2004, is included in the MVEC franchise ordinance. The projected annual revenue from the franchise fee to the City is estimated to be approximately $15,000. I recommend that the franchise agreement be submitted to the City Council for approval at the April 5, 2004 public hearing. If you have any questions on the agreement, please feel free to contact me. KT/jg Enclosures cc: Barry Lindahl, Corporation Counsel I< œio :J. h I (J 'f ~ Maquoketa Valley ~ ElectricCooperative March 2,2004 Mr. Ken TeKippe Finance Director City Hall 50 West 13th Street Dubuque, Iowa 52001 Re: . Franchise Agreement/Ordinance Dear Ken: Enclosed are two signed copies of the proposed ordinance for the Franchise Agreement between the City and Maquoketa Valley Electric Cooperative. Please return one copy to us upon being approved by the City. The only change ITom the final draft is the corrected dates insection 23. You had verbally agreed to this change. We. will make our first payment to the City in May, based on energy sold in April. Our new software will be in place in April, and will first be used to generate bills the first week of May. We will send copies of our tariff and maps for Dubuque once the City has returned a signed copy of the Ordinance to us. I QJlderstand the City will act on this March 15th. We anticipate sending letters to our Dubuque customers explaining the need for a ITanchise agreement, and the new fee they will see. These letters will be sent out sometime in late March. Thank you again for your assistance in putting this together, and for your patience as we converted our software systems. Sincerely, .j ClVyv\L{) 1-71 ~t~ James M. LauzOn CEO I Executive Vice President Copy: Dennis Puckett A Touchst""" Enexgy" Cooperative ~ 109 North Huber Street. Anamosa, Iowa 52205-0370 . 319-462.3541 . www.mvec.coop ORDINANCE NO. 20-04 AN ORDINANCE GRANTING TO MAQUOKETA VALLEY ELECTRIC COOPERATIVE, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE AUTHORITY TO MAINTAIN AND OPERATE ITS EXISTING ELECTRICAL SYSTEM AND CONSTRUCT EXTENSIONS THERETO WITHIN THE LIMITS OF THE CITY OF DUBUQUE, IOWA, INCLUDING ANY TERRITORY WHICH MAY BE ANNEXED THERETO DURING THE TERM OF THIS FRANCHISE TO THE EXTENT ANY SUCH TERRITORY IS WITHIN THE EXCLUSIVE SERVICE TERRITORY OF THE COMPANY UNDER IOWA CODE CHAPTER 476 (OR ITS SUCCESSOR), AND INCLUDING THE RIGHT TO ERECT AND MAINTAIN ALL NECESSARY FACILITIES AND EQUIPMENT IN, UNDER, UPON, OVER, ACROSS AND ALONG THE STREETS, ALLEYS, BRIDGES AND OTHER SIMILAR PUBLIC PLACES WITHIN THE CITY FOR THE PRODUCTION, TRANSMISSION, DISTRIBUTION AND SALE OF ELECTRIC POWER, AND PRESCRIBING TERMS AND CONDITIONS UNDER WHICH THE COMPANY IS TO OPERATE. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Definitions. 1. Whenever the word "city" appears in this ordinance, it is intended and shall be held to mean the City of Dubuque, Iowa. 2. Whenever the word "company" appears in this ordinance, it is intended and shall be held to mean Maquoketa Valley Electric Cooperative, its successors and assigns. 3. Whenever the word "grantee" appears in this ordinance, it is intended and shall be held to mean Maquoketa Valley Electric Cooperative, its successors and assigns. 4. Whenever the word "franchise" appears in this ordinance it is intended and shall be held to mean the grant of authority contained in this ordinance as accepted by the company. 5. Whenever the word "street" appears in this ordinance, it is intended and shall be held to mean streets, alleys, bridges, avenues, highways and other similar public places used for transportation purposes within the city. 6. Iowa Utilities Board means the utilities board or utilities. division established by Iowa Code Chapter 474 (or its successor). Section 2. Grant of Franchise. There is hereby granted to the company, its successors and assigns, for a period from the effective date of this ordinance through October 3, 2018, a non- exclusive authority to maintain and operate its existing electrical production, transmission and distribution system and construct extensions and additions within the limits of the city including any areas added to the city by annexation or {0002017LDOC} otherwise, together with all necessary facilities and equipment in, under, upon, over, across, and along the streets of the city for the transmission, distribution and sale of electrical power therein. Also granted is, the right of eminent domain, as provided in Iowa Section 364.2. Section 3. Street Usage. The company shall not locate any new electrical distribution or service line, including poles or other facilities, within the city in the public right of way without the approval of the city manager. The city reserves to itself the power to impose reasonable regulations on the company's use of streets. The city reserves the right by resolution or otherwise to designate the location of any new electric distribution or service line including poles and other facilities with reference to other street facilities such as sewer and water mains and services and street trees in such a manner as to promote the public safety and to protect public property. Section 4. Excavations and Other Works. A written permit shall be obtained from the city manager whenever it becomes necessary for the company to excavate in streets or public grounds of the city. Such permits shall state a particular part or point of the street where the excavation is to be made and the length of time in which such permit shall authorize the work to be done. An exception to a requirement for a permit shall be made in cases of emergency involving public safety, in which case a permit will be obtained at the earliest opportunity after the work has started. In making excavations in the streets the company shall proceed with such work so as to cause the least possible inconvenience to the public. The company shall properly protect, according to safety standards generally accepted at the time. of placement, as may be determined from time to time by the city manager, all excavations and obstructions by proper shoring, surface plates, barricades, warning lights and such other or additional devices as circumstances may warrant. If in the opinion of the city manager such excavation or obstruction is not properly and safely protected, the city manager shall notify the company and the company will immediately comply with such reasonable instructions. Immediately after buried electrical service lines are installed or repaired, the trenches in which such lines are installed will be refilled by the company. No trench or excavation in the streets shall be filled or covered without giving the city the. right to inspect the same. All backfilling in streets will be according to city specifications. Temporary street surfacing will be placed in such excavations as soon as the same has been backfilled. Pavements, sidewalks, curb and gutters or other portions of streets and public places opened, disturbed or damaged by company shall be promptly restored and replaced with like materials by the {OOO20171.DOC} 2 . . company at its own expense and left in as good condition as before. In the event like replacement materials are not available, the company shall notify the city manager who must approve the use of any alternate materials. In the event that the company shall fail to comply with the provision of this section, after having been given reasonable notice, the city may do such work as may be needed to properly repair such pavements, sidewalks, curb and gutters or other portions of streets and public places and the cost thereof shall be repaid to the city by the company. In some cases where a cut or disturbance is made in a section of street paving or sidewalks, rather than replace only the area cut, the company shall replace that area stipulated by the city manager which in no event shall exceed the panel or panels disturbed. That whenever any person has obtained permission from the city manager to move any building or structure which may interfere with the poles, wires or other fixtures of said grantee, grantee shall, upon five (5) days' notice thereof, and at the expense of the person desiring to move such structure, remove such poles, wires or other fixtures as may be necessary to allow the passage of such structure, for a reasonable length of time, upon receipt from such person of satisfactory assurance covering the cost of such removal and replacement and any liability or damage resulting therefrom. Section 5. Relocation of Service Lines. Whenever the city shall pave or repave any street or shall change the grade line of any street or public place or shall construct or reconstruction any conduit, water main service or water connection, sewer or other public works or utility, it shall be the duty of the company, except where easements of record are held by the company, when so ordered by the city, to relocate its service lines and other property in the streets or other public places at its own expense so as to conform to the established grade or line of such street or public place and so as not to interfere with the conduits, sewers and other mains so constructed or reconstructed. However, the company shall not be required to relocate poles or other facilities and appurtenances when the street, alley or public grounds, in which they are located, is vacated for the convenience of abutting property owners and not as an incident to a public improvement, unless the reasonable cost of such. relocation and the loss and expense resulting therefrom is first paid to the company by the abutting property owners. In the case of public improvements, including but not limited to urban renewal projects, the city may require the company to relocate it poles, service lines and appurtenances in the streets at company's expense. The city may at its discretion assign personnel for inspection of excavation and related work being performed by the company. Should the company fail or refuse to do and perform the things provided in this ordinance, the city may, after reasonable notice, perform the work and charge the expense thereof to the company and the company shall promptly pay said charges. {OO020171.DOC} 3 Section 6. Accessions to Franchise. Where any electric service line is presently or in the future placed anywhere in the corporate limits of the city, either as now existing or hereafter extended, not in a public street and a street shall thereafter be opened or dedicated so as to include said line within the right-of-way of such street, said electric line shall be required to be operated and maintained under the terms of this franchise: Section 7. Representation of Company. The company agrees to provide and maintain its entire system pursuant to Iowa Utilities Board rules in such condition that it will furnish reasonably safe, adequate, and efficient service. Section 8. Meters. Standards for meters and meter practices shall be in accordance with regulations, rules or directives adopted by the Iowa Utilities Board of the Iowa Department of Commerce. Section 9. Reserved Regulatory Rights. In the event the State of Iowa or the United States ceases to regulate any aspect of the delivery of electrical service by company now regulated by either or both, the city reserves the right upon such cessation to regulate such matters to the extent such matters are local affairs impacting the health, safety or welfare of residents of the city. Nothing in this section shall be interpreted as granting the city the right to regulate the rates of the company. Section 10. Extension of Service. The company shall be required to extend its electric distribution service lines as required by Iowa Utilities Board rules by extending lines in a manner consistent with the economic growth of the city and the city shall in the extension of streets and roads make provision for the placement of electric service lines. However, failure of the city to reserve right of way for electrical usage is not a default or breach under this agreement. Section 11. Rates. The company shall supply electricity to consumers within the city at reasonable rates. It is recognized that under the statutes of the State of Iowa, the company is not subject to the rate regulation authority of the Iowa Utilities Board of the Iowa Department of Commerce. The company's Board of Directors is {OOO20171.DOC} 4 vested with legal authority to supervise, fix or change rates and charges for services provided by the company to its electricity consumers. It is also recognized by both the company and the city that matters involving rate changes and charges are local in their application and effect and that the city, through its city council, shall be within its privileges and municipal responsibilities in making inquiries, expressing interest or adopting a position on matters of rate changes or charges by the company. Simultaneously, with the delivery by the company of any notice of change in rates or charges, or of any other revision or change which would have the effect of increasing the rates and prices to be paid to the company by consumers of electricity in the city, the company shall file with the city clerk of the city a written notice in the same form as is delivered to the electricity consumers of the company. Nothing in this section shall be interpreted as granting the city the right to regulate the rates of the company. i Section 12. Reports to City Council. The company shall file with the city clerk a true copy of the annual report of the company pertaining to the operation or conduct of business of the company under this franchise. The report may be the same as the company shall have prepared for such year in the ordinary course of the conduct of the business of the company and filed with the Iowa Utilities Board. Section 13. Company Rules. The company shall file with the city clerk a copy of its electric tariff as filed with the Iowa Utilities Board. The city shall also be advised of any changes, additions, deletions or amendments to said tariff. Section 14. Maps of Distribution System. The company shall, promptly after the award of this franchise, furnish the city manager a detailed map or maps of its distribution system both within the city limits and the area immediately surrounding the city. The company shall thereafter update the map or maps every year showing all subsequent additions or deletions to the distribution system. Prior to any excavation by the city, or its agents, a representative must contact the company regarding current information on the location of underground electric lines in the area concerned. The obligation to contact the company under this section shall be satisfied if contact is made with a corporation organized pursuant to Iowa Code Chapter 480 (2003) or an entity with a similar function utilized by both the city and the company, currently the Iowa One-Call System. The maps required to be provided under this section may be provided in hard-copy format or electronic format. {OOO20171.DOC} 5 . . Section 15. Indemnification; Insurance. Except for claims based upon the negligence or willful misconduct of the city, the company shall indemnify and hold the city harmless at all times during the term of this franchise from and against all claims for injury or damage to persons or property caused by the construction, erection, operation or maintenance of its properties, or the negligence of its contractors or its employees. In case of any suit or action at law being commenced against the city, upon any claim for damage arising out of any loss, injury or damage, claimed to have been caused by any installation,improvement, obstruction or excavation in any street, alley, sidewalk or public place in the city, and which installation, improvement, obstruction or excavation was made or left in, under or upon such street, sidewalk, alley or public place by said company, its agents, contractors or employees,. upon being notified in writing by said city of such action or proceeding, said company' shall appear and make proper defense thereto; and if any judgment or decree shall in any such case be rendered against the city therein, said company hereby agrees to assume, pay and satisfy such judgment or decree, with the costs thereof. At all times during the term of this franchise, the company shall maintain insurance as set forth in the attached Insurance Schedule, which schedule shall be subject to amendment by the city council as it deems in the best interest of the city. Section 16. Nonassignment. No sale, assignment or lease of this franchise shall be effective until it is approved by the city council and until the company has filed in the office of the city clerk written notice of the proposed sale, transfer, disposition or assignment, such notice to clearly summarize the proposed procedure and the terms and conditions thereof. Such approval by the city shall not be unreasonably withheld. The proposed vendor, assignee or lessee shall similarly file an instrument, duly executed, reciting such proposal, accepting the terms of this franchise and agreeing to perform all the conditions thereof. This provision shall not apply, however, to sales, assignment, or transfers made pursuant to a corporate reorganization, divestiture, or consolidation, or to a sale of all or substantially all of the electric distribution properties of the company. Section 17. Forfeiture of Franchise. The violation of any material portion of this franchise by the company or its successors or assigns, or its failure promptly to perform any of the provisions of this franchise shall be cause for forfeiture of this franchise and the termination of all rights thereunder. Such forfeiture shall be accomplished by ordinance of the city after written notice by the city manager to the company and a continuation of {OOO20171.DOC} 6 the violation, failure or default specified in the notice for at least thirty (30) days from the date the notice was served, unless such default cannot reasonably be cured within said thirty (30) days, in which case it will be sufficient for the company to have commenced action to cure said default within said thirty (30) days and continue to pursue such cure diligently thereafter. Section 18. Severability. If any section or provision of this ordinance is held invalid by a court of competent jurisdiction, such holding shall not affect the validity of any other provisions of this ordinance which can be given effect without the invalid portion or portions and to this end each section and provision of this ordinance is severable. Section 19. Revival. The parties recognize that over the duration of this franchise both technological and regulatory changes will take place which will impact the enforceability of this ordinance or parts of it. In recognition of such factors the parties agree that in the event portions of this ordinance which are now, or in the future, are found or declared inapplicable or unenforceable, become through a subsequent change in law or technology again to be applicable or enforceable, such provisions shall be revived and again form a portion of this ordinance. Section 20. Cure of Defaults. If either party determines there is a default under this franchise the other party shall be given written notice describing the default in detail, whether a forfeiture or termination of the franchise will be sought and where curable a reasonable time to cure the default which shall not be less than thirty (30) nor more than one hundred eighty (180) days. Section 21. Reservation of Home Rule Powers. This ordinance is intended to be and shall be construed as consistent with the reservation of local authority contained in the Twenty Fifth Amendment to the Iowa Constitution granting municipalities home rule powers. To such end any limitation on the power of the city is to be strictly construed and the city reseNes to itself the right to exercise all power and authority to regulate and control its local affairs and all ordinances and regulations of the city shall be enforceable against the company unless, and only to the extent, they are irreconcilable with any rights granted the company under this ordinance. {OOO20171.DOC} 7 '. Section 22. Acquisition at Expiration. If at the expiration of this franchise the company wishes to abandon the electric service system within the city and subject to any approval required by statute, the company shall upon the city's request, given not earlier than one hundred eighty (180) days before expiration or more than ninety (90) days after, sell the electric distribution system within the city which is used exclusively to provide service to the consumers of the company located within the city to the city at a price determined by a mutually agreeable appraiser, or if the parties cannot within sixty (60) days of notice agree upon an appraiser, then they shall each appoint an appraiser and the appraisers shall appoint a third. The price shall then be the price the appraisers agree upon, or if they do not agree within sixty (60) days of being appointed, the price shall be the average of the two appraisals which are closest in dollar amount. This provision shall not apply, however, to sales, assignments, or transfers made pursuant to a corporate reorganization, divestiture, or consolidation, or to a sale of all or substantially all of the electric distribution properties of the company. Section 23. Franchise Fee. Effective on billings after May 1, 2004, (energy sold after approximately March 28th) and for the term of this franchise, the company shall pay to the city a fee equal to two percent (2%) of the gross revenue generated from the sale of electricity within the City of Dubuque. The city shall provide company with a map depicting its current corporate boundaries and shall notify company of any changes to the same. The company shall on the fifteenth day of each month, commencing May 15, 2004, provide to the city manager in a form acceptable to the company and the city manager records establishing the gross revenues from the sale of electricity by the company within the City of Dubuque for the preceding month and shall pay the fee to the city within thirty (30) days following the last day of the preceding month. The fee imposed herein shall not apply to any sale of electricity by the company that is exempt under Iowa Code § 422.45 from the tax imposed by Iowa Code § 422.43 and in computing the amount of the fee, the company shall not include such sales, unless it is impracticable to do so, in which event the city manager may provide for a rebate of the amount of the fee for such exempt sales of electricity to the company's customers. Notwithstanding the foregoing, the fee imposed herein shall apply to all sales of electricity by the company to residential customers {OOO20171.DOC} 8 The city council reserves the right by amendment to this ordinance to increase or decrease the amount of such franchise fee as it determines to be in the public interest. Section 24. Adoption. This ordinance following its passage shall become effective upon its acceptance by the company and publication as required by law. Passed, approved and adopted this 5th day of April 2004. Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk ACCEPTANCE OF ORDINANCE The terms and conditions of the foregoing ordinance are hereby accepted this 2nd day of March, 2004. MAQUOKETA VALLEY ELECTRIC COOPERATIVE . . By: /s/ James Lanyon (?) Its CEO / Executive Vice President Its CEO I Executive Vide President By {OOO2017!.DOC} 9 . , INSURANCE SCHEDULE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A of better in the current A.M. Best Rating Guide, unless otherwise agreed by the parties. 2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancell¡3.tion to the City of Dubuque if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. 3. The company shall furnish a Certificate of Insurance to the City of Dubuque,lowa for the coverage required in Paragraph 6 below. Such certificates shall include cooies of the following policy endorsements: a) Thirty day notice of cancellation to the City of Dubuque. b) Commercial General Liability policy is primary and non-contributing. c) Commercial General Liability additional insured endorsement. d) Governmental Immunity Endorsements. e) Waiver of recovery under workers compensation. 4. Each certificate shall be submitted to the Finance Department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to.obtain or maintain the required insurance shaH be considered a material breach of this agreement. 6. The company shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit Products-Completed Operations Aggregate Limit Personal and Advertising Injury Limit Each Occurrence Limit Fire Damage Limit (anyone occurrence) Medical Payments $10,000/occurence $2,000,000 $1,000,000 $1,000,000 $1,000,000 $ 50,000 $1,000/person This coverage shall be written on an occurrence, not claims made, form per location. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Business owners form BP 0002 shall be clearly identified. {0002017!.DOC} 10 " Governmental Immunity Endorsement identical or equivalent to form attached. An additional insured endorsement identical or equivalentto ISO Form CG 2026 or CG 2011 and include as additional insureds: "The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers." b) WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: $100,000 each accident $100,000 each employee-disease $500,000 policy limit-disease Policy shall include an endorsement waiving right of recovery against City of Dubuque, except for intentional misconduct or gross negligence. {OOO2OJ71.DOC} 11 . " POLICY NUMBER COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person Or Organization: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. Coovrioht. Insurance Services Office. Inc. 1994 261185 {OOO2017J.DOC) 12 CG20 . . . . .' CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmentallmmunitv. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coveraae. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurance carrier. . 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the inSurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Chance in Policv. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. { 0002Ol71.DOC} 13 .t Ÿ/5' RESOLUTION NO. 108 -04 SETTING A PUBLIC HEARING ON A FRANCHISE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND MAQUOKETA VALLEY ELECTRIC COOPERATIVE NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City Council shall conduct a public hearing on a proposed Franchise Agreement between the City of Dubuque, Iowa and Maquoketa Valley Electric Cooperative at the Carnegie Stout Public Library Auditorium, 360 West 11th Street, Dubuque, Iowa, on Monday, April 5, 2004, beginning at 6:30 p.m. Section 2. That the City Clerk be and is hereby authorized and directed to publish notice of the public hearing, according to law. Passed, approved and adopted this ~ day of March, 2004. Attest: ORDINANCE NO. -04 AN ORDINANCE GRANTING TO MAQUOKETA V ALLEY ELECTRIC COOPERATIVE, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE AUTHORITY TO MAINTAIN AND OPERATE ITS EXISTING ELECTRICAL SYSTEM AND CONSTRUCT EXTENSIONS THERETO WITHIN THE LIMITS OF THE CITY OF DUBUQUE, IOWA, INCLUDING ANY TERRITORY WHICH MAY BE ANNEXED THERETO DURING THE TERM OF THIS FRANCHISE TO THE EXTENT ANY SUCH TERRITORY IS WITHIN THE EXCLUSIVE SERVICE TERRITORY OF THE COMPANY UNDER IOWA CODE CHAPTER 476 (OR ITS SUCCESSOR), AND INCLUDING THE RIGHT TO ERECT AND MAINTAIN ALL NECESSARY FACILITIES AND EQUIPMENT IN, UNDER, UPON, OVER, ACROSS AND ALONG THE STREETS, ALLEYS, BRIDGES AND OTHER SIMILAR PUBLIC PLACES WITHIN THE CITY FOR THE PRODUCTION, TRANSMISSION, DISTRIBUTION AND SALE OF ELECTRIC POWER, AND PRESCRIBING TERMS AND CONDITIONS UNDER WHICH THE COMPANY IS TO OPERATE. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Definitions. 1. Whenever the word "city" appears in this ordinance, it is intended and shall be held to mean the City of Dubuque, Iowa. 2. Whenever the word "company" appears in this ordinance, it is intended and shall be held to mean Maquoketa Valley Electric Cooperative, its successors and assigns. 3. Whenever the word "grantee" appears in this ordinance, it is intended and shall be held to mean Maquoketa Valley Electric Cooperative, its successors and assigns. 4. Whenever the word "franchise" appears in this ordinance it is intended and shall be held to mean the grant of authority contained in this ordinance as accepted by the company. 5. Whenever the word "street" appears in this ordinance, it is intended and shall be held to mean streets, alleys, bridges, avenues, highways and other similar public places used for transportation purposes within the city. 6. Iowa Utilities Board means the utilities board or utilities division established by Iowa Code Chapter 474 (or its successor). Section 2. Grant of Franchise. There is hereby granted to the company, its successors and assigns, for a period from the effective date of this ordinance through October 3, 2018, a non- exclusive authority to maintain and operate its existing electrical production, transmission and distribution system and construct extensions and additions within the limits of the city including any areas added to the city by annexation or {OOO2017LDOC} otherwise, together with all necessary facilities and equipment in, under, upon, over, across, and along the streets of the city for the transmission, distribution and sale of electrical power therein. Also granted is, the right of eminent domain, as provided in Iowa Section 364.2. Section 3. Street Usage. The company shall not locate any new electrical distribution or service line, including poles or other facilities, within the city in the public right of way without the approval of the city manager. The city reserves to itself the power to impose reasonable regulations on the company's use of streets. The city reserves the right by resolution or otherwise to designate the location of any new electric distribution or service line including poles and other facilities with reference to other street facilities such as sewer and water mains and services and street trees in such a manner as to promote the public safety and to protect public property. Section 4. Excavations and Other Works. A written permit shall be obtained from the city manager whenever it becomes necessary for the company to excavate in streets or public grounds of the city. Such permits shall state a particular part or point of the street where the excavation is to be made and the length of time in which such permit shall authorize the work to be done. An exception to a requirement for a permit shall be made in cases of emergency involving public safety, in which case a permit will be obtained at the earliest opportunity after the work has started. In making excavations in the streets the company shall proceed with such work so as to cause the least possible inconvenience to the public. The company shall properly protect, according to safety standards generally accepted at the time of placement, as may be determined from time to time by the city manager, all excavations and obstructions by proper shoring, surface plates, barricades, warning lights and such other or additional devices as circumstances may warrant. If in the opinion of the city manager such excavation or obstruction is not properly and safely protected, the city manager shall notify the company and the company will immediately comply with such reasonable instructions. Immediately after buried electrical service lines are installed or repaired, the trenches in which such lines are installed will be refilled by the company. No trench or excavation in the streets shall be filled or covered without giving the city the right to inspect the same. All backfilling in streets will be according to city specifications. Temporary street surfacing will be placed in such excavations as soon as the same has been backfilled. Pavements, sidewalks, curb and gutters or other portions of streets and public places opened, disturbed or damaged by company shall be promptly restored and replaced with like materials by the {OOO20171.DOC} 2 company at its own expense and left in as good condition as before. In the event like replacement materials are not available, the company shall notify the city manager who must approve the use of any alternate materials. In the event that the company shall fail to comply with the provision of this section, after having been given reasonable notice, the city may do such work as may be needed to properly repair such pavements, sidewalks, curb and gutters or other portions of streets and public places and the cost thereof shall be repaid to the city by the company. In some cases where a cut or disturbance is made in a section of street paving or sidewalks, rather than replace only the area cut, the company shall replace that area stipulated by the city manager which in no event shall exceed the panel or panels disturbed. That whenever any person has obtained permission from the city manager to move any building or structure which may interfere with the poles, wires or other fixtures of said grantee, grantee shall, upon five (5) days' notice thereof, and at the expense of the person desiring to move such structure, remove such poles, wires or other fixtures as may be necessary to allow the passage of such structure, for a reasonable length of time, upon receipt from such person of satisfactory assurance covering the cost of such removal and replacement and any liability or damage resulting therefrom. Section 5. Relocation of Service Lines. Whenever the city shall pave or repave any street or shall change the grade line of any street or public place or shall construct or reconstruction any conduit, water main service or water connection, sewer or other public works or utility, it shall be the duty of the company, except where easements of record are held by the company, when so ordered by the city, to relocate its service lines and other property in the streets or other public places at its own expense so as to conform to the established grade or line of such street or public place and so as not to interfere with the conduits, sewers and other mains so constructed or reconstructed. However, the company shall not be required to relocate poles or other facilities and appurtenances when the street, alley or public grounds, in which they are located, is vacated for the convenience of abutting property owners and not as an incident to a public improvement, unless the reasonable cost of such relocation and the loss and expense resulting therefrom is first paid to the company by the abutting property owners. In the case of public improvements, including but not limited to urban renewal projects, the city may require the company to relocate it poles, service lines and appurtenances in the streets at company's expense. The city may at its discretion assign personnel for inspection of excavation and related work being performed by the company. Should the company fail or refuse to do and perform the things provided in this ordinance, the city may, after reasonable notice, perform the work and charge the expense thereof to the company and the company shall promptly pay said charges. {OOO20171.DOC} 3 Section 6. Accessions to Franchise. Where any electric service line is presently or in the future placed anywhere in the corporate limits of the city, either as now existing or hereafter extended, not in a public street and a street shall thereafter be opened or dedicated so as to include said line within the right-of-way of such street, said electric line shall be required to be operated and maintained under the terms of this franchise. Section 7. Representation of Company. The company agrees to provide and maintain its entire system pursuant to Iowa Utilities Board rules in such condition that it will furnish reasonably safe, adequate, and efficient service. Section 8. Meters. Standards for meters and meter practices shall be in accordance with regulations, rules or directives adopted by the Iowa Utilities Board of the Iowa Department of Commerce. Section 9. Reserved Regulatory Rights. In the event the State of Iowa or the United States ceases to regulate any aspect of the delivery of electrical service by company now regulated by either or both, the city reserves the right upon such cessation to regulate such matters to the extent such matters are local affairs impacting the health, safety or welfare of residents of the city. Nothing in this section shall be interpreted as granting the city the right to regulate the rates of the company. Section 10. Extension of Service. The company shall be required to extend its electric distribution service lines as required by Iowa Utilities Board rules by extending lines in a manner consistent with the economic growth of the city and the city shall in the extension of streets and roads make provision for the placement of electric service lines. However, failure of the city to reserve right of way for electrical usage is not a default or breach under this agreement. Section 11. Rates. The company shall supply electricity to consumers within the city at reasonable rates. It is recognized that under the statutes of the State of Iowa, the company is not subject to the rate regulation authority of the Iowa Utilities Board of the Iowa Department of Commerce. The company's Board of Directors is {OOO20171.DOC} 4 vested with legal authority to supervise, fix or change rates and. charges for services provided by the company to its electricity consumers. It is also recognized by both the company and the city that matters involving rate changes and charges are local in their application and effect and that the city, through its city council, shall be within its privileges and municipal responsibilities in making inquiries, expressing interest or adopting a position on matters of rate changes or charges by the company. Simultaneously, with the delivery by the company of any notice of change in rates or charges, or of any other revision or change which would have the effect of increasing the rates and prices to be paid to the company by consumers of electricity in the city, the company shall file with the city clerk of the city a written notice in the same form as is delivered to the electricity consumers of the company. Nothing in this section shall be interpreted as granting the city the right to regulate the rates of the company. Section 12. Reports to City Council. The company shall file with the city clerk a true copy of the annual report of the company pertaining to the operation or conduct of business of the company under this franchise. The report may be the same as the company shall have prepared for such year in the ordinary course of the conduct of the business of the company and filed with the Iowa Utilities Board. Section 13. Company Rules. The company shall file with the city clerk a copy of its electric tariff as filed with the Iowa Utilities Board. The city shall also be advised of any changes, additions, deletions or amendments to said tariff. Section 14. Maps of Distribution System. The company shall, promptly after the award of this franchise, furnish the city manager a detailed map or maps of its distribution system both within the city limits and the area immediately surrounding the city. The company shall thereafter update the map or maps every year showing all subsequent additions or deletions to the distribution system. Prior to any excavation by the city, or its agents, a representative must contact the company regarding current information on the location of underground electric lines in the area concerned. The obligation to contact the company under this section shall be satisfied if contact is made with a corporation organized pursuant to Iowa Code Chapter 480 (2003) or an entity with a similar function utilized by both the city and the company, currently the Iowa One-Call System. The maps required to be provided under this section may be provided in hard-copy format or electronic format. {OOO20171.DOC} 5 Section 15. Indemnification; Insurance. Except for claims based upon the negligence or willful misconduct of the city, the company shall indemnify and hold the city harmless at all times during the term of this franchise from and against all claims for injury or damage to persons or property caused by the construction, erection, operation or maintenance of its properties, or the negligence of its contractors or its employees. In case of any suit or action at law being commenced against the city, upon any claim for damage arising out of any loss, injury or damage, claimed to have been caused by any installation, improvement, obstruction or excavation in any street, alley, sidewalk or public place in the city, and which installation, improvement, obstruction or excavation was made or left in, under or upon such street, sidewalk, alley or public place by said company, its agents, contractors or employees, upon being notified in writing by said city of such action or proceeding, said company shall appear and make proper defense thereto; and if any judgment or decree shall in any such case be rendered against the city therein, said company hereby agrees to assume, pay and satisfy such judgment or decree, with the costs thereof. At all times during the term of this franchise, the company shall maintain insurance as set forth in the attached Insurance Schedule, which schedule shall be subject to amendment by the city council as it deems in the best interest of the city. Section 16. Nonassignment. No sale, assignment or lease of this franchise shall be effective until it is approved by the city council and until the company has filed in the office of the city clerk written notice of the proposed sale, transfer, disposition or assignment, such notice to clearly summarize the proposed procedure and the terms and conditions thereof. Such approval by the city shall not be unreasonably withheld. The proposed vendor, assignee or lessee shall similarly file an instrument, duly executed, reciting such proposal, accepting the terms of this franchise and agreeing to perform all the conditions thereof. This provision shall not apply, however, to sales, assignment, or transfers made pursuant to a corporate reorganization, divestiture, or consolidation, or to a sale of all or substantially all of the electric distribution properties of the company. Section 17. Forfeiture of Franchise. The violation of any material portion of this franchise by the company or its successors or assigns, or its failure promptly to perform any of the provisions of this franchise shall be cause for forfeiture of this franchise and the termination of all rights thereunder. Such forfeiture shall be accomplished by ordinance of the city after written notice by the city manager to the company and a continuation of {OOO20171.DOC} 6 the violation, failure or default specified in the notice for at least thirty (30) days from the date the notice was served, unless such default cannot reasonably be cured within said thirty (30) days, in which case it will be sufficient for the company to have commenced action to cure said default within said thirty (30) days and continue to pursue such cure diligently thereafter. Section 18. Severability. If any section or provision of this ordinance is held invalid by a court of competent jurisdiction, such holding shall not affect the validity of any other provisions of this ordinance which can be given effect without the invalid portion or portions and to this end each section and provision of this ordinance is severable. Section 19. Revival. The parties recognize that over the duration of this franchise both technological and regulatory changes will take place which will impact the enforceability of this ordinance or parts of it. In recognition of such factors the parties agree that in the event portions of this ordinance which are now, or in the future, are found or declared inapplicable or unenforceable, become through a subsequent change in law or technology again to be applicable or enforceable, such provisions shall be revived and again form a portion of this ordinance. Section 20. Cure of Defaults. If either party determines there is a default under this franchise the other party shall be given written notice describing the default in detail, whether a forfeiture or termination of the franchise will be sought and where curable a reasonable time to cure the default which shall not be less than thirty (30) nor more than one hundred eighty (180) days. Section 21. Reservation of Home Rule Powers. This ordinance is intended to be and shall be construed as consistent with the reservation of local authority contained in the Twenty Fifth Amendment to the Iowa Constitution granting municipalities home rule powers. To such end any limitation on the power of the city is to be strictly construed and the city reserves to itself the right to exercise all power and authority to regulate and control its local affairs and all ordinances and regulations of the city shall be enforceable against the company unless, and only to the extent, they are irreconcilable with any rights granted the company under this ordinance. {OOO20l71.DOC} 7 Section 22. Acquisition at Expiration. If at the expiration of this franchise the company wishes to abandon the electric service system within the city and subject to any approval required by statute, the company shall upon the city's request, given not earlier than one hundred eighty (180) days before expiration or more than ninety (90) days after, sell the electric distribution system within the city which is used exclusively to provide service to the consumers of the company located within the city to the city at a price determined by a mutually agreeable appraiser, or if the parties cannot within sixty (60) days of notice agree upon an appraiser, then they shall each appoint an appraiser and the appraisers shall appoint a third. The price shall then be the price the appraisers agree upon, or if they do not agree within sixty (60) days of being appointed, the price shall be the average of the two appraisals which are closest in dollar amount. This provision shall not apply, however, to sales, assignments, or transfers made pursuant to a corporate reorganization, divestiture, or consolidation, or to a sale of all or substantially all of the electric distribution properties of the company. Section 23. Franchise Fee. Effective on billings after May 1, 2004, (energy sold after approximately March 28th) and for the term of this franchise, the company shall pay to the city a fee equal to two percent (2%) of the gross revenue generated from the sale of electricity within the City of Dubuque. The city shall provide company with a map depicting its current corporate boundaries and shall notify company of any changes to the same. The company shall on the fifteenth day of each month, commencing May 15, 2004, provide to the city manager in a form acceptable to the company and the city manager records establishing the gross revenues from the sale of electricity by the company within the City of Dubuque for the preceding month and shall pay the fee to the city within thirty (30) days following the last day of the preceding month. The fee imposed herein shall not apply to any sale of electricity by the company that is exempt under Iowa Code § 422.45 from the tax imposed by Iowa Code § 422.43 and in computing the amount of the fee, the company shall not include such sales, unless it is impracticable to do so, in which event the city manager may provide for a rebate of the amount of the fee for such exempt sales of electricity to the company's customers. Notwithstanding the foregoing, the fee imposed herein shall apply to all sales of electricity by the company to residential customers {OOO20171.DOC} 8 The city council reserves the right by amendment to this ordinance to increase or decrease the amount of such franchise fee as it determines to be in the public interest. Section 24. Adoption. This ordinance following its passage shall become effective upon its acceptance by the company and publication as required by law. Passed, approved and adopted this 2004. day of Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk ACCEPTANCE OF ORDINANCE The terms and conditions of the foregoing ordinance are hereby accepted this 2nd day of March, 2004. MAQUOKETA VALLEY ELECTRIC COOPERATIVE By It~C;;:~CU~::J ~ident {OOO2017LDOC} 9 INSURANCE SCHEDULE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A of better in the current AM. Best Rating Guide, unless otherwise agreed by the parties. 2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. 3. The company shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such certificates shall include copies of the following policy endorsements: a) Thirty day notice of cancellation to the City of Dubuque. b) Commercial General Liability policy is primary and non-contributing. c) Commercial General Liability additional insured endorsement. d) Governmental Immunity Endorsements. e) Waiver of recovery under workers compensation. 4. Each certificate shall be submitted to the Finance Department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. The company shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit Products-Completed Operations Aggregate Limit Personal and Advertising Injury Limit Each Occurrence Limit Fire Damage Limit (anyone occurrence) Medical Payments $10,000/occurence $2,000,000 $1,000,000 $1,000,000 $1,000,000 $ 50,000 $1,000/person This coverage shall be written on an occurrence, not claims made, form per location. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Business owners form BP 0002 shall be clearly identified. {O0020171.DOC} 10 Governmental Immunity Endorsement identical or equivalent to form attached. An additional insured endorsement identical or equivalent to ISO Form CG 2026 or CG 2011 and include as additional insureds: "The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers." b) WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: $100,000 each accident $100,000 each employee-disease $500,000 policy limit-disease Policy shall include an endorsement waiving right of recovery against City of Dubuque, except for intentional misconduct or gross negligence. {OOO20171.DOC} 11 POLICY NUMBER COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person Or Organization: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. CoDvrioht. Insurance Services Office. Inc. 1994 261185 CG20 {OOO20171.DOC} 12 CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmentallmmunitv. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coveraae. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurance carrier. 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Chanae in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. {OO020171.DOC} 13