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Item 8ACity of Southlake, Texas MEMORANDUM September 26, 2006 TO: Shana Yelverton, City Manager PROM: Sharen Jackson, Finance Director SUBJECT: Ordinance No. 903, An Ordinance Amending Existing Franchise Ordinance Between The City Of Southlake And TXU Electric Delivery Company, A Texas Corporation, Its Successors And Assigns, To Provide For A Different Payment Schedule; Providing An Extension. Of The Franchise Term; Providing For TXU Electric Delivery Acceptance Action Requested: Approval of Ordinance No. 903 Background Information: In accordance with the Agreement to Resolve Outstanding Franchise Issues dated January 27, 2006 between TXU and the TXU Steering Committee, TXU was required to amend the existing franchise ordinance, between TXU and the Cities. The purpose of this franchise amendment is to convert to quarterly, instead of annual, payment of franchise fees. A by- product of that conversion is a 5 -year extension of the franchise until October 31, 2011. Financial Considerations: Ordinance No. 903 would increase the frequency of franchise revenue received which could potentially increase interest earning. Citizen Input/ Board Review: Public hearing scheduled for October 17, 2006 Legal Review: The steering committee attorney prepared the ordinance. Alternatives: Approve or deny. Supporting Documents: Ordinance No. 903 Staff Recommendation: Approve Ordinance No. 903 ORDINANCE NO. 903 AN ORDINANCE AMENDING EXISTING FRANCHISE ORDINANCE BETWEEN THE CITY OF SOUTHLAKE AND TXU ELECTRIC DELIVERY COMPANY, A TEXAS CORPORATION, ITS SUCCESSORS AND ASSIGNS, TO PROVIDE FOR A DIFFERENT PAYMENT SCHEDULE; PROVIDING AN EXTENSION OF THE FRANCHISE TERM; PROVIDING FOR TXU ELECTRIC DELIVERY ACCEPTANCE; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW. WHEREAS, TXU Electric Delivery Company, successor in interest to Oncor Electric Delivery Company (hereinafter called "Company ") is engaged in the business of providing electric utility service within the City of Southlake, Texas (hereinafter called "City ") and is using the public rights -of- -ways within the City for that purpose under the terms of a franchise ordinance heretofore duly passed by the governing body of the City and duly accepted by Company; and WHEREAS, pursuant to Agreement to Resolve Outstanding Franchise Issues dated January 27, 2006, the City has requested and Company has agreed to amend said franchise ordinance to provide for a different payment schedule and an extension of the term; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: that SECTION 1 : The franchise between the City and Company is amended as follows: A. A final annual payment will be made on or before November 1, 2006, based on each kilowatt hour of electricity delivered by Company during the twelve -month period ending August 31, 2006, to each retail customer whose consuming facility's point of delivery is located within the City's municipal boundaries. This payment is for the rights and privileges granted under the franchise for the twelve month period November 1, 2006 — October 31, 2007. Effective February 1, 2007 the annual prospective payment schedule is hereby changed to a quarterly prospective schedule as follows: Payment Due Date Basis Period Privilege Period ( Following Year Feb. 1 Sept. 1 —Nov. 3 0 Nov. 1 — Jan. 31 May 1 Dec. 1— Feb. 2$(29) Feb. I April 30 Aug. 1 Mar. 1 -- May 31 May 1 — July 31 Nov. 1 June 1 —Aug. 31 Aug. 1 — Oct. 31 The first quarterly payment will be due and payable on or before February 1, 2007, based on the period beginning September 1, 2006 and ending November 30, 2006 for the rights and privileges granted under the franchise during the period November 1, Page 1 of 2 2007 and ending January 31, 2008. Subsequent payments will be made on a quarterly basis as provided in the above schedule. The final payment under this Franchise will be made on or before November 1, 2010, based on the period beginning June 1, 2010 and ending August 31, 2010, for the rights and privileges beginning August 1, 2011 and ending October 31, 2011. After the final payment date of November 1, 2010, 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 agreement as full payment for the relevant quarterly periods; and B. The term of the franchise is hereby extended for an additional five years to expire on October 31, 2011. SECTION 2 : In all respects, except as specifically and expressly amended by this ordinance, the franchise heretofore duly passed by the governing body of the City and duly accepted by Company shall remain in full force and effect according to its terms until said franchise ordinance terminates as provided herein. SECTION 3 : This ordinance shall take effect upon its final passage and Company's acceptance. Company shall, within sixty (60) days from the passage of this ordinance, file its written acceptance of this ordinance with the Office of the City Secretary. SECTION 4 . It is hereby officially found and determined that the meeting at which this Ordinance is passed is open to the public as required by law and that public notice of the time, place and purpose of said meeting was given as required. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, this the day of , 2006. Mayor ATTEST: City Secretary Page 2 of 2