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Item 6C - Staff Report with OrdinanceQCITY OF ISOUTHLAKE MEMORANDUM January 16, 2024 To: Shana Yelverton, City Manager From: Sharen Jackson, CFO 001 Subject: Item 6C — Ordinance No. 1283, 2nd Reading, a franchise agreement with Oncor Electric Delivery Company, LLC Action Requested: Approval of Ordinance No. 1283, 2nd Reading, a franchise agreement with Oncor Electric Delivery Company, LLC Background Information: The purpose of this item is to seek City Council approval for the renewal of the franchise agreement with Oncor Electric Delivery Company, LLC, or Oncor. If approved, this agreement will grant Oncor the right and privilege to operate in Southlake public rights of way to maintain electric power lines and all necessary accessories to deliver electricity to the City, its residents, and businesses. The provisions outlined in the proposed agreement specifically speak to how Oncor will construct, operate, and maintain its equipment within the City's rights -of -way. It also addresses the process for relocating and abandoning equipment as well as rights -of -way, and finally, the agreement explains the franchise fee and the payment schedule to the City. The previous franchise agreement with Oncor was enacted by Ordinance No. 1054 on January 15th, 2013, and expired on October 31st, 2023. There are several notable changes as a result of this agreement. The first is an increase of 6.5% to the Franchise Fee Rate that is used to calculate the quarterly franchise fees that the City receives from Oncor. This rate is then multiplied by the number of kilowatt hours used within the City of Southlake for a defined basis period and will be paid quarterly to the City for the duration of the agreement. The second notable change is the increase in the contract term, up from 10-years to 20-years. If approved, the proposed agreement will expire on October 31st, 2043. Financial Considerations: The proposed franchise agreement would increase the Franchise Fee Rate by 6.5% from the last agreement, thus increasing the amount we receive per kilowatt hour on our quarterly franchise payments. Strategic Link: This item supports the City's strategy through the focus area of infrastructure and the corporate objective of B2, collaborate with select partners to implement service solutions and C3, provide attractive and unique spaces for the enjoyment of personal interests. Citizen Input/ Board Review: None required Legal Review: The proposed franchise agreement has been reviewed by our City Attorney's office, TOASE. Alternatives: Approve, deny, or modify the proposed franchise agreement with Oncor Staff Recommendation: Approval of Ordinance No.1283 Supporting Documents: Ordinance No.1283 Staff Contacts: Sharen Jackson (817) 748-8042 ORDINANCE NO.1283 AN ORDINANCE GRANTING TO ONCOR ELECTRIC DELIVERY COMPANY LLC, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC POWER FRANCHISE TO USE THE PRESENT AND FUTURE STREETS, ALLEYS, HIGHWAYS, PUBLIC UTILITY EASEMENTS, PUBLIC WAYS AND OTHER PUBLIC PROPERTY (PUBLIC RIGHTS -OF -WAY) OF SOUTHLAKE, TEXAS, PROVIDING FOR THE REPEAL OF ALL PRIOR FRANCHISE ORDINANCES TO ONCOR ELECTRIC DELIVERY COMPANY LLC, ITS PREDECESSORS AND ASSIGNS, PROVIDING FOR COMPENSATION THEREFOR, PROVIDING FOR AN EFFECTIVE DATE AND A TERM OF SAID FRANCHISE, PROVIDING FOR WRITTEN ACCEPTANCE OF THIS FRANCHISE, AND FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC. BE IT ORDAINED BY THE CITY COUNCIL OF SOUTHLAKE, TEXAS: SECTION 1. GRANT OF AUTHORITY: A. The City of Southlake, Texas ("City") hereby grants to Oncor Electric Delivery Company LLC, its successors and assigns (herein called "Company"), the right, privilege and franchise to construct, extend, maintain and operate in, along, under and across the present and future streets, alleys, highways, easement held by the City to which the City holds the property rights in regard to use for utilities, public ways, and other public property ("Public Rights -of -Way") of Southlake, electric power lines, with all necessary or desirable appurtenances (including underground conduits, poles, towers, wires, transmission lines and other structures, and telephone and communication lines solely for Company's own use), for the purpose of delivering electricity to the City, the inhabitants thereof, and persons, firms and corporations beyond the corporate limits thereof, for the term set out in Section 10, subject to this consent by the City in accordance with Texas Utilities Code, Section 181.043 and in accordance with the Public Utility Regulatory Act (PURA) and Texas Utilities Code. B. The provisions set forth in this ordinance represent the terms and conditions under which Company shall construct, operate, and maintain its system facilities within the Public Rights -of -Way of the City. Company, by its acceptance of this Franchise, agrees that all such lawful regulatory powers and rights as the same may be from time to time vested in the City shall be in full force and effect and subject to the exercise thereof by the City at any time. In granting this Franchise, the City does not in any manner surrender or waive its regulatory or other rights and powers under and by virtue of the Constitution and statutes of the State of Texas as the same may be amended, nor any of its rights and powers under or by virtue of present or future ordinances of the City, including the City's Right -of -Way Management Ordinance, except as may be expressly set out herein. Company also retains all of its lawful authority and rights under the PURA and any other applicable federal, state, and local laws, rules, and regulations. Nothing herein shall be deemed a waiver, release or relinquishment of either party's right to contest, appeal, or file suit with respect to any action or decision of the other party, including ordinances adopted by the City, that Company believes is in violation of any federal, state, or local laws, rules or regulations. The City will endeavor to provide Company notice and opportunity to review and comment upon proposed ordinances relating to City's Public Rights -of -Way. Not included in this Franchise are any facilities, including any equipment attached in any way to Company's facilities, whether owned by the Company or not, that provide data delivery, cable service, telephone service, or any other service or product not required by Company for, or necessary for the support of, the transmittal and delivery of electricity. C. This Franchise does not grant to the Company the right, privilege or authority to engage in any other activities within the City other than as specified in this Franchise or allowed by applicable federal, state or local laws, rules and regulations. SECTION 2. USE OF PUBLIC RIGHTS -OF -WAY: A. The poles, towers and other structures shall be so erected as not to unreasonably interfere with traffic over streets, alleys and highways. B. Company shall, except in cases of (i) emergency conditions or (ii) routine maintenance and repair of facilities that do not involve any of the following (a) cutting or breaking of pavement or (b) closure of traffic lane for longer than 24 hours or (c) boring or (d) excavation greater than 100 cubic feet or (iii) connection of real property to a utility service on the same side of the Public Rights -of -Way if connection does not require a pavement cut in the Public Rights -of -Way or (iv) replacement of a single damaged pole and associated work within a ten (10) foot radius of the damaged pole or (v) installation of aerial lines on less than 11 existing poles or installation of aerial lines on less than 11 new poles, provide City reasonable advance notice, and obtain a permit, (if required by City Ordinance), prior to performing work in the Public Rights -of -Way, except in no instance shall Company be required to pay fees or bonds related to its use of the Public Rights -of -Way, despite the City's enactment of any ordinance providing the contrary. Company shall construct and maintain its facilities in conformance with the applicable provisions of the National Electrical Safety Code or such comparable standards as may be adopted, and in a good and workmanlike manner. C. The City retains the right to make visual, non-invasive inspections of the Company's facilities and upon reasonable notice and request, to require the Company to make available for inspection records or data to demonstrate its current compliance with the terms of this Franchise. D. The location of Company's facilities in the City Public Rights -of -Way shall be subject to approval by the City Manager or the City Manger's designated representative (the "Manager") prior to construction; provided however, said approval shall not be unreasonably withheld. This approval will be obtained through the City's permitting process (if required by City Ordinance). In the event of a conflict between the location of the proposed facilities of Company and the locations of the facilities of City or other Public Rights -of -Way users which exist or have been authorized by the City prior to the conflict, the Manager shall resolve the conflict and determine the location of the respective facilities within the Public Rights -of -Way. To avoid a facilities location conflict, the Manager will designate a reasonable alternate location within the City's Public Rights - of -Way for Company's facilities if a reasonable alternate location exists. The Company will use reasonable efforts to work with the City to avoid installing its facilities in park or City property other than utility easements or street, alley, or highway Rights -of -Way. Company has the right to request regulatory agency or court review of this or any actions concerning Company's use of the City Public Rights -of -Way. E. The Company shall restore at the Company's expense, all work within the City Rights -of -Way, to a condition equally as good as it was immediately prior to being disturbed by Company's construction, excavation, repair or removal or to a condition agreed upon by City and Company. If City or Company believe that there are extenuating circumstances that do not allow for restoration of all work within the City Rights -of -Way to a condition equally as good as it was immediately prior to being disturbed by Company, City and Company will negotiate an alternative restoration plan (in writing) to remedy the situation. Absent an agreement to an alternative restoration plan, either party has a right to request review of the matter by any court or regulatory agency having jurisdiction. F. Company shall provide complete information regarding the location of current and future overhead and underground wires and poles within City's Public Rights - of -Way. Reproducible copies of maps showing the location of all overhead and underground wires and poles within the Public Rights -of -Way shall be furnished to the City upon reasonable request, if available. The maps shall be provided in electronic digital format, if available, when requested by the City. SECTION 3: RELOCATION AND ABANDONMENT: A. The City reserves the right to lay, and permit to be laid, storm, sewer, gas, water, wastewater and other pipe lines, cables, and conduits, or other improvements and to do and permit to be done any underground or overhead work that City in its sole discretion determines may be necessary or proper in, across, along, over, or under City Public Rights -of -Way occupied by Company. The City also reserves the right to change in any manner any curb, sidewalk, highway, alley, public way, street, utility lines (or in the case of utility line owned by Company, to require that change by Company), storm sewers, drainage basins, drainage ditches, and the like. B. City shall provide Company with at least thirty (30) days' notice when requesting Company to relocate facilities and shall specify a new location for such facilities along City Public Rights -of -Way. City -requested relocations of Company facilities in the Public Rights -of -Way shall be at the Company's expense; provided however, if the City is the end use Retail Customer (customer who purchases electric power or energy and ultimately consumes it) requesting the removal or relocation of Company Facilities for its own benefit, or the project requiring the relocation is solely aesthetic/beautification in nature, it will be at the total expense of the City. Provided further, if the relocation request includes, or is for, the Company to relocate above -ground facilities to an underground location, City shall be fully responsible for the additional cost of placing the facilities underground. C. If any other corporation or person (other than City) requests Company to relocate Company facilities located in City Rights -of -Ways, the Company shall not be bound to make such changes until such other corporation or person shall have undertaken, with good and sufficient bond, to reimburse the Company for any costs, loss, or expense which will be caused by, or arises out of such change, alteration, or relocation of Company's Facilities. City may not request the Company to pay for any relocation which has already been requested, and paid for, by any entity other than City. D. If City abandons any Public Rights -of -Way in which Company has facilities, such abandonment shall be conditioned on Company's right to maintain its use of the former Public Rights -of -Way and on the obligation of the party to whom the Public Rights -of -Way is abandoned to reimburse Company for all removal or relocation expenses if Company agrees to the removal or relocation of its facilities following abandonment of the Public Rights -of -Way. If the party to whom the Public Rights -of -Way is abandoned requests the Company to remove or relocate its facilities and Company agrees to such removal or relocation, such removal or relocation shall be done within a reasonable time at the expense of the party requesting the removal or relocation. If relocation cannot practically be made to another City Public Right -of -Way, the expense of any right-of-way acquisition shall be considered a relocation expense to be reimbursed by the party requesting the relocation. SECTION 4. INDEMNITY: A. In consideration of the granting of this Franchise, Company shall, at its sole cost and expense, indemnify and hold the City, and its past and present officers, agents and employees (the "Indemnitees") harmless against any and all liability arising from suits, actions or claims regarding injury or death to any person or persons, or damages to any property arising out of or occasioned by the intentional and/or negligent acts or omissions of Company or any of its officers, agents, or employees in connection with Company's construction, maintenance and operation of Company's Facilities in the City Public Rights -of - Way, including any court costs, reasonable expenses and reasonable defenses thereof. B. This indemnity shall only apply to the extent that the loss, damage, death or injury is attributable to the negligence or wrongful act or omission of the Company, its officers, agents or employees, and does not apply to the extent such loss, damage, death or injury is attributable to the negligence or wrongful act or omission of the City, or the City's officers, agents, or employees or any other person or entity. This provision is not intended to create a cause of action or liability for the benefit of third parties but is solely for the benefit of the Company and the City. C. In the event of joint and concurrent negligence or fault of both the Company and the City, responsibility and indemnity, if any, shall be apportioned comparatively between the City and Company in accordance with the laws of the State of Texas without, however, waiving any governmental immunity available to the City under Texas law and without waiving any of the defenses of the parties under Texas law. Further, in the event of joint and concurrent negligence or fault of both the Company and the City, responsibility for all costs of defense shall be apportioned between the City and Company based upon the comparative fault of each. D. In fulfilling its obligation to defend and indemnify City, Company shall have the right to select defense counsel, subject to City's approval, which will not be unreasonably withheld. Company shall retain defense counsel within seven (7) business days of City's written notice that City is invoking its right to indemnification under this Franchise. If Company fails to retain Counsel within such time period, City shall have the right to retain defense counsel on its own behalf, and Company shall be liable for all reasonable defense costs incurred by City, except as otherwise provided in Section 4.13. and 4.C. SECTION 5. LIABILITY INSURANCE: Company shall, at its sole cost and expense, obtain, maintain, or cause to be maintained, and provide, throughout the term of this Franchise, insurance in the amounts, types and coverages in accordance with the following requirements. Such insurance may be in the form of self-insurance to the extent permitted by applicable law or by obtaining insurance, as follows: A. Commercial general or excess liability on an occurrence or claims made form with minimum limits of five million dollars ($5,000,000.00) per occurrence and ten million dollars ($10,000,000.00) aggregate. This coverage shall include the following: (1) Products/completed operations to be maintained for the warranty period. (2) Personal and advertising injury. (3) Contractual liability. (4) Explosion, collapse, or underground (XCU) hazards. B. Automobile liability coverage with a minimum policy limit of one million dollars ($1,000,000.00) combined single limit each accident. This coverage shall include all owned, hired and non -owned automobiles. C. Workers compensation and employers liability coverage. Statutory coverage limits for Coverage A and five hundred thousand dollars ($500,000.00) bodily injury each accident, five hundred thousand dollars ($500,000.00) each employee bodily injury by disease, and five hundred thousand dollars ($500,000.00) policy limit bodily injury by disease Coverage B employers' liability is required. Company must provide the City with a waiver of subrogation for worker's compensation claims. D. Company must name the City, which includes all authorities, commissions, divisions and departments, as well as elected and appointed officials, agents, employees and volunteers, as an additional insureds under the coverage required herein, except Worker's Compensation Coverage. The certificate of insurance must state that the City is an additional insured. E. Company will require its contractors and subcontractors to maintain, at their sole cost and expense, a minimum of three million dollars ($3,000,000) each occurrence or each accident general liability and automobile liability throughout the course of work performed. Also, contractors and subcontractors will be required to maintain statutory workers' compensation benefits in accordance with the regulations of the State of Texas or state of jurisdiction as applicable. The minimum limits for employers' liability insurance will be five hundred thousand dollars ($500,000) bodily injury each accident, five hundred thousand dollars ($500,000) each employee bodily injury by disease, five hundred thousand dollars ($500,000) policy limit bodily injury by disease. In the event a claim exceeds the contractors' or subcontractors' insurance coverage, Company shall be responsible for covering any deficiencies between its contractors' or subcontractors' compliance with these insurance requirements. Coverages required to be maintained under Section 5.A., 5.B., and 5.C. shall include a waiver of subrogation in favor of the City. The Company will provide proof of its insurance in accordance with this Franchise within 30 days of the effective date of the Franchise and annually thereafter. Company will not be required to furnish separate proof when applying for permits. SECTION 6. NON -EXCLUSIVITY: This Franchise is not exclusive, and nothing herein contained shall be construed so as to prevent the City from granting other like or similar rights, privileges and franchises to any other person, firm, or corporation. Any Franchise granted by the City to any other person, firm, or corporation shall not unreasonably interfere with this Franchise. SECTION 7. CONSIDERATION: In consideration of the grant of said right, privilege and franchise by the City and as full payment for the right, privilege and franchise of using and occupying the said Public Rights -of -Way, and in lieu of any and all occupation taxes, assessments, municipal charges, fees, easement taxes, franchise taxes, license, permit and inspection fees or charges, street taxes, bonds, street or alley rentals, and all other taxes, charges, levies, fees and rentals of whatsoever kind and character which the City may impose or hereafter be authorized or empowered to levy and collect, excepting only the usual general or special ad valorem taxes which the City is authorized to levy and impose upon real and personal property, sales and use taxes, and special assessments for public improvements, Company shall pay to the City the following: (a) A final quarterly payment was made on or before August 1, 2023 for the basis period of March 1, 2023 through May 31, 2023 and the privilege period of May 1, 2024 through July 31, 2024 in accordance with the provisions in the previous franchise. (b) As authorized by Section 33.008(b) of PURA, the original franchise fee factor calculated for the City in 2002 was 0.003221 (the "Base Factor"), multiplied by each kilowatt hour of electricity delivered by Company to each retail customer whose consuming facility's point of delivery is located within the City's municipal boundaries for determining franchise payments going forward. Due to a 2006 agreement between Company and City the franchise fee factor was increased to a franchise fee factor of 0.003382 (the "Current Factor"), multiplied by each kilowatt hour of electricity delivered by Company to each retail customer whose consuming facility's point of delivery is located within the City's municipal boundaries on a quarterly basis. However, consistent with the 2006 agreement, should the Public Utility Commission of Texas at any time disallow Company's recovery through rates of the higher franchise payments made under the Current Factor as compared to the Base Factor, then the franchise fee factor shall immediately revert to the Base Factor of 0.003221 and all future payments, irrespective of the time period that is covered by the payment, will be made using the Base Factor. Company shall make quarterly payments as follows: (c) Pavment Due Date November 1 February 1 May 1 August 1 Basis PPrind Jun. 1 —Aug. 31 Sept. 1 — Nov. 30 Dec. 1 — Feb. 28(29) Mar. 1 — May 31 Privilege Period (Following Pmt) Aug. 1 — Oct. 31 Nov. 1 — Jan. 31 Feb. 1 —Apr. 30 May 1 — Jul. 31 1. The first quarterly payment hereunder shall be due and payable on or before November 1, 2023 and will cover the basis period of June 1, 2023 through August 31, 2023 and the privilege period of August 1, 2024 through October 31, 2024. If this Franchise is not effective prior to the first quarterly payment date, Company will pay any payments due within 30 days of the effective date of this agreement. The final payment under this Franchise is due on or before November 1, 2042 and covers the basis period of June 1, 2042 through August 31, 2042 and the privilege period of August 1, 2043 through October 31, 2043; and 2. After the final payment date of November 1, 2042, Company may continue to make additional quarterly payments in accordance with the above schedule. City acknowledges that such continued payments will correspond to privilege periods that extend beyond the term of this Franchise and that such continued payments will be recognized in any subsequent franchise as full payment for the relevant quarterly periods. A sum equal to four percent (4%) of gross revenues received by Company from services identified as DD1 through DD24 in Section 6.1.2 "Discretionary Service Charges," in Oncor's Tariff for Retail Delivery Service (Tariff), effective 1/1/2002, that are for the account and benefit of an end -use retail electric consumer. Company will, upon request by City, provide a cross reference to Discretionary Service Charge numbering changes that are contained in Company's current approved Tariff. 1. The franchise fee amounts based on "Discretionary Service Charges" shall be calculated on an annual calendar year basis, i.e. from January 1 through December 31 of each calendar year. 2. The franchise fee amounts that are due based on "Discretionary Service Charges" shall be paid at least once annually on or before April 30 each year based on the total "Discretionary Service Charges", as set out in Section 7.(c), received during the preceding calendar year. The initial Discretionary Service Charge franchise fee amount will be paid on or before April 30, 2024 and will be based on the calendar year January 1, 2023 through December 31, 2023. The final Discretionary Service Charge franchise fee amount will be paid on or before April 30, 2044 and will be based on the calendar months of January 1, 2043 through October 31, 2043. 3. Company may file a tariff or tariff amendment(s) to provide for the recovery of the franchise fee on Discretionary Service Charges. 4. City agrees (i) to the extent the City acts as regulatory authority, to adopt and approve that portion of any tariff which provides for 100% recovery of the franchise fee on Discretionary Service Charges; (ii) in the event the City intervenes in any regulatory proceeding before a federal or state agency in which the recovery of the franchise fees on such Discretionary Service Charges is an issue, the City will take an affirmative position supporting the 100% recovery of such franchise fees by Company and; (iii) in the event of an appeal of any such regulatory proceeding in which the City has intervened, the City will take an affirmative position in any such appeals in support of the 100% recovery of such franchise fees by Company. 5. City agrees that it will take no action, nor cause any other person or entity to take any action, to prohibit the recovery of such franchise fees by Company. 6. In the event of a regulatory disallowance of the recovery of the franchise fees on the Discretionary Service Charges, Company will not be required to continue payment of such franchise fees. D. With each payment of compensation required by Section 7.(b), Company shall furnish to the City a statement, executed by an authorized officer of Company or designee, providing the total kWh delivered by Company to each retail customer's point of delivery within the City and the amount of payment for the period covered by the payment. E. With each payment of compensation required by Section 7.(c), Company shall furnish to the City a statement, executed by an authorized officer of Company or designee, reflecting the total amount of gross revenues received by Company from services identified in its "Tariff for Retail Delivery Service," Section 6.1.2, "Discretionary Service Charges," Items DD1 through DD24. F. If either party discovers that Company has failed to pay the entire or correct amount of compensation due, the correct amount shall be determined by mutual written agreement between the City and Company and the City shall be paid by Company within thirty (30) calendar days of such determination. Such payments shall include interest as provided for in Section 7.G. Any overpayment to the City through error or otherwise will, at the sole option of the City, either be refunded to Company by City within thirty (30) days of such determination or offset against the next payment due from Company. Acceptance by either party of any payment due under this Section shall not be deemed to be a waiver by the other party of any claim of breach of this Franchise, nor shall the acceptance by either party of any such payments preclude the other party from later establishing that a larger amount was actually due or from collecting any balance due. Nothing in this section shall be deemed a waiver by either party of its rights under law or equity. G. Any late or delinquent payments due to the City by Company under this Franchise, including corrected payments as provided in Section 7.F., shall accrue interest. Interest on late or delinquent payments shall be calculated in accordance with the interest rate for customer deposits established by the Public Utility Commission of Texas in accordance with Texas Utilities Code Section 183.003. H. The franchise fee payable to the City pursuant to Section 7.13. hereunder, except as agreed to by Company and City in Section 7.F., shall not be offset by any payment by Company to the City relating to ad valorem taxes. SECTION 8. MOST FAVORED NATIONS: A. This Section 8 applies only if, after the effective date of this Franchise Agreement, Company enters into a new municipal franchise agreement or renews an existing municipal franchise agreement with another municipality that provides for a different method of calculation of franchise fees for use of the Public Rights -of -Way than the calculation under PURA, Section 33.008(b), which, if applied to the City, would result in a greater amount of franchise fees owed the City than under this Franchise Agreement. B. In the event of an occurrence as described in Section 8 hereof, City shall have the option to: 1. Have Company select, within 30 days of the City's request, any or all portions of the franchise agreement with the other municipality or comparable provisions that, at Company's sole discretion, must be considered in conjunction with the different method of the calculation of franchise fees included in that other franchise agreement; and 2. Modify this franchise agreement to include both the different method of calculation of franchise fee found in the franchise agreement with the other municipality and all of the other provisions identified by Company pursuant to subsection 8.B.1. In no event shall City be able to modify this franchise to include the different method of calculation of franchise fee found in the franchise agreement with the other municipality without this franchise also being modified to include all of the other provisions identified by Company pursuant to subsection 8.B.1. C. City may not exercise the option provided in subsection 8.13.1. if any of the provisions that would be included in this franchise are, in Company's sole opinion, inconsistent with or in any manner contrary to any then -current rule, regulation, ordinance, law, Code, or City Charter. D. In the event of a regulatory disallowance of the increase in franchise fees paid pursuant to City's exercise of its option under subsection 8.13.1., then at any time after the regulatory authority's entry of an order disallowing recovery of the additional franchise fee expense in rates, Company shall have the right to cancel the modification of the franchise made pursuant to subsection 8.B.1., and the terms of the Franchise shall immediately revert to those in place prior to City's exercise of its option under this section. E. Notwithstanding any other provision of this franchise, should the City exercise the option provided in Section 8.13.1., and then adopt any rule, regulation, ordinance, law, Code, or Charter of City that, in Company's sole opinion, is inconsistent with or in any manner contrary to the provisions included in this franchise pursuant to subsection 8.13.1., then Company shall have the right to cancel all of the modifications to this franchise made pursuant to subsection 8.13.1., and, effective as of the date of the City's adoption of the inconsistent provision, the terms of the franchise shall revert to those in place prior to the City's exercise of its option under subsection 8.13.1. F. The provisions of this section apply only to the amount of the franchise fee to be paid and do not apply to other franchise fee payment provisions, such as the timing of such payments. The provisions of this section do not apply to differences in the franchise fee factor that result from the application of the methodology set out in Section 33.008(b) of PURA or any successor methodology. SECTION 9: RECORDS AND REPORTS: A. Company shall keep accurate books of account at its principal office for the purpose of determining the amount due to the City under this Franchise. B. Pursuant to Section 33.008(e) of the Texas Utilities Code, the City may conduct an audit or other inquiry in relation to a payment made by Company less than two (2) years before the commencement of such audit or inquiry. The City may, if it sees fit, and upon reasonable notice to the Company, have the books and records of the Company examined by a representative of the City to ascertain the correctness of the reports agreed to be filed herein. C. The Company shall make available to the auditor during the Company's regular business hours and upon reasonable notice, such personnel and records as the City may, in its reasonable discretion, request in order to complete such audit, and shall make no charge to the City therefore. 1. If as the result of any City audit, Company is refunded/credited for an overpayment, or pays the City for an underpayment, of the Franchise Fee, such refund/credit or payment shall be made pursuant to the payment terms established in Section 7. 2. If as a result of a subsequent audit, initiated within two years of an audit which resulted in Company making a payment to the City due to an underpayment of the franchise fee of more than 5%, Company makes another payment to the City due to an underpayment of the franchise fee of more than 5%, the City may immediately treat this underpayment as an Uncured Event of Default and exercise the remedies provided for in Section 12.C. D. The Company shall assist the City in its review by responding to all requests for information no later than thirty (30) days after receipt of a request. E. If the Company provides confidential or proprietary information to the City, the Company shall be solely responsible for identifying such information with markings calculated to bring the City's attention to the proprietary or confidential nature of the information. The City agrees to maintain the confidentiality of any non-public information obtained from Company to the extent allowed by law if company identifies the information as non-public prior to providing the information to the City. City shall not be liable to Company for the release of any information the City is required by law to release. City shall provide notice to Company of any request for release of non-public information prior to releasing the information so as to allow Company adequate time to pursue available remedies for protection. If the City receives a request under the Texas Public Information Act that includes information Company has identified as Company's proprietary information, City will notify the Texas Attorney General of the proprietary nature of the document(s). The City also will provide Company with a copy of this notification, and thereafter Company is responsible for establishing that an exception under the Act allows the City to withhold the information. SECTION 10. TERM: This Ordinance shall become effective upon Company's written acceptance hereof, said written acceptance to be filed by Company with the City Secretary within sixty (60) days after final passage and approval hereof by City. The right, privilege and franchise granted hereby shall expire on October 31, 2043 provided that, unless written notice is given by either party hereto to the other not less than sixty (60) days before the expiration of this franchise agreement, it shall be automatically renewed for an additional period of six (6) months from such expiration date and shall be automatically renewed thereafter for like periods until canceled by written notice given not less than sixty (60) days before the expiration of any such renewal period. SECTION 11. REPEALER CLAUSE: This Ordinance shall supersede any and all other franchises granted by the City to Company, its predecessors and assigns. SECTION 12. DEFAULT, REMEDIES, TERMINATION: A. Events of Default. The occurrence, at any time during the term of the Franchise Agreement, of any one or more of the following events, shall constitute an Event of Default by Company under this Franchise: 1. The failure of Company to pay the franchise fee on or before the due dates specified herein. 2. Company's material breach or material violation of any material terms, covenants, representations or warranties contained herein. B. Uncured Events of Default. 1. Upon the occurrence of an Event of Default which can be cured by the immediate payment of money to City, Company shall have thirty (30) calendar days from receipt of written notice from City of an occurrence of such Event of Default to cure same before City may exercise any of its rights or remedies provided for in Section 12.C. 2. Upon the occurrence of an Event of Default by Company which cannot be cured by the immediate payment of money to City, Company shall have sixty (60) calendar days (or such additional time as may be agreed to by the City) from receipt of written notice from City of an occurrence of such Event of Default to cure same before City may exercise any of its rights or remedies provided for in Section 12.C. 3. If the Event of Default is not cured within the time period allowed for curing the Event of Default as provided for herein, such Event of Default shall, without additional notice, become an Uncured Event of Default, which shall entitle City to exercise the remedies provided for in Section 12.C. C. Remedies. The City shall notify the Company in writing of an alleged Uncured Event of Default as described in Section 12.13, which notice shall specify the alleged failure with reasonable particularity. The Company shall, within thirty (30) business days after receipt of such notice or such longer period of time as the City may specify in such notice, either cure such alleged failure or in a written response to the City either present facts and arguments in refuting or defending such alleged failure or state that such alleged failure will be cured and set forth the method and time schedule for accomplishing such cure. In the event that such cure is not forthcoming, City shall be entitled to exercise any and all of the following cumulative remedies: 1. The commencement of an action against Company at law for monetary damages. 2. The commencement of an action in equity seeking injunctive relief or the specific performance of any of the provisions that as a matter of equity, are specifically enforceable. 3. The commencement of proceedings to seek revocation of Company's certificate of convenience and necessity to serve any or all of Company's service area located within the City. 4. The termination of this Franchise. D. The rights and remedies of City and Company set forth in this Franchise Agreement shall be in addition to, and not in limitation of, any other rights and remedies provided by law or in equity. City and Company understand and intend that such remedies shall be cumulative to the maximum extent permitted by law and the exercise by City of any one or more of such remedies shall not preclude the exercise by City, at the same or different times, of any other such remedies for the same failure to cure. However, City shall not recover both liquidated damages and actual damages for the same violation, breach, or noncompliance. E. Termination. In accordance with the provisions of Section 12.C., this Franchise may be terminated upon thirty (30) business day's prior written notice to Company by City. City shall notify Company in writing at least fifteen (15) business days in advance of the City Council meeting at which the question of forfeiture or termination shall be considered, and Company shall have the right to appear before the City Council in person or by counsel and raise any objections or defenses Company may have that are relevant to the proposed forfeiture or termination. The final decision of the City Council may be appealed to any court or regulatory authority having jurisdiction. Upon timely appeal by Company of the City Council's decision terminating the Franchise, the effective date of such termination shall be either when such appeal is withdrawn or an order upholding the termination becomes final and unappealable. Until the termination becomes effective the provisions of this Franchise shall remain in effect for all purposes. The City recognizes Company's right and obligation to provide service in accordance with the Certificate of Convenience and Necessity authorized by the Public Utility Commission of Texas in accordance with the Texas Utilities Code. F. The failure of either party to insist in any one or more instances upon the strict performance of any one or more of the terms or provisions of this Franchise shall not be construed as a waiver or relinquishment for the future of any such term or provision, and the same shall continue in full force and effect, subject to applicable statute of limitations. No waiver or relinquishment shall be deemed to have been made by either party unless said waiver or relinquishment is in writing and signed by that party. G. This Franchise shall be construed and governed by the laws of the State of Texas. City and Company agree that any lawsuit between the City and the Company concerning this Franchise will be filed in the state of Texas. Nothing in this Franchise shall prohibit the City from filing an action related to this Franchise in Tarrant County, Texas. SECTION 13. NOTICES: Notices, reports or demands required to be given under this Franchise shall be deemed to be given when delivered in writing, personally to the person designated below, or when five days have elapsed after it is deposited in the United States Mail with registered or certified mail postage prepaid to the person designated below, or on the next business day if sent by Express Mail or overnight air courier addressed to the person designated below: If to City: If to the Company: City Manager Municipal Relations City of Southlake Oncor Electric Delivery Company LLC 1400 Main Street, Suite 460 1616 Woodall Rodgers Fwy, 6t" floor Southlake, Texas 76092 Dallas, Texas 75202-1234 SECTION 14. SEVERABILITY: The sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable. If any portion of this Ordinance is declared illegal or unconstitutional by the valid final non -appealable judgment or decree of any court of competent jurisdiction, such illegality or unconstitutionality shall not affect the legality and enforceability of any of the remaining portions of this Ordinance. SECTION 15. ASSIGNMENT: The rights granted by this Franchise Agreement inure to the benefit of the Company and any parent, subsidiary, affiliate or successor entity now or hereafter existing. The rights shall not be assignable without the express written consent, by Ordinance, of the City Council of the City, unless otherwise superseded by state laws, rules, or regulations or Public Utility Commission of Texas action, and such consent by City shall not be unreasonably withheld or delayed, except the Company may assign its rights under this Franchise Agreement to a parent, subsidiary, affiliate or successor entity without consent, so long as such parent, subsidiary, affiliate or successor entity assumes all obligations of Company hereunder, and is bound to the same extent as Company hereunder. The Company shall give the City written notice within ninety (90) days of any such assignment to a parent, subsidiary, affiliate or successor entity. PASSED AND APPROVED ON FIRST READING ON THIS 19TH DAY OF DECEMBER, 2023. John Huffman Mayor ATTEST: Amy Shelley, TRMC City Secretary APPROVED AS TO FORM AND LEGALITY: City Attorney Date: STATE OF TEXAS § COUNTY OF TARRANT § CITY OF SOUTHLAKE § I, , City Secretary of Southlake, Tarrant County, Texas, do hereby certify that the above and foregoing is a true and correct copy of an ordinance passed and approved by the City Council of Southlake, Texas, at a session, held on the day of , 2023, at a session as it appears of record in the Minutes in Book page WITNESS MY HAND AND SEAL OF SOUTHLAKE, this the day of A. D. 2023. City Secretary Southlake, Texas