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HomeMy WebLinkAbout2025-10-20 H02 Gas Utility Sale_Franchise Ordinance_INTRO, 1ST READAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: October 20, 2025 AGENDA ITEM:Consideration of approval of an ordinance granting MidAmerican Energy Company, its successors and assigns, the right and franchise to acquire, construct, erect, maintain and operate in the City of Waukee, Iowa, natural gas system facilities and to furnish and sell natural gas to the City and its inhabitants for a period of 25 years pursuant to Iowa Code Section 364.2 (2025) [introduction; first reading] FORMAT:Ordinance SYNOPSIS INCLUDING PRO & CON: FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: RECOMMENDATION: Introduce the ordinance and approve the first reading in title only. ATTACHMENTS: I. Proposed Ordinance PREPARED BY:Becky Schuett REVIEWED BY: H2 ORDINANCE NO. AN ORDINANCE GRANTING TO MIDAMERICAN ENERGY COMPANY, ITS SUCCESSORS AND ASSIGNS, THE RIGHT AND FRANCHISE TO ACQUIRE, CONSTRUCT, ERECT, MAINTAIN AND OPERATE IN THE CITY OF WAUKEE, IOWA AN NATURAL GAS SYSTEM AND FACILITIES AND TO FURNISH AND SELL NATURAL GAS TO THE CITY AND ITS INHABITANTS FOR A PERIOD OF 25 YEARS. BE IT ORDAINED by the City Council of the City of Waukee, Iowa: Section 1. There is hereby granted to MidAmerican Energy Company, an Iowa corporation, and to its successors and assigns, hereinafter called “Company”, the right and franchise to acquire, construct, erect, maintain and operate in the City of Waukee, Iowa, hereinafter called the “City,” a system for the transmission and distribution of natural gas along, under and upon the streets, avenues, alleys and public places to serve customers within the City, and to furnish and sell natural gas to the City and its inhabitants. This franchise shall be effective for a twenty- five (25) year period from and after the effective date of this ordinance, provided however, the City may reevaluate the franchise ordinance every five years, commencing with the 10th year, by providing Company written notice at least 120 days prior to 10, 15, and 20th anniversaries of the ordinance. If such a request to re-evaluate or amend the ordinance is made by the City and the parties are unable to agree to amend the ordinance within 90 days or by a mutually agreed upon date, then the City may elect to terminate or continue this franchise upon the expiration of the re- evaluation period. If the City does not seek such re-evaluation by means of a written notice to the Company at least 120 days prior to the expiration of year 10, 15, or 20th anniversaries, as provided herein, this franchise will continue without change. Section 2. The rights and privileges hereby granted are subject to the restrictions and limitations of Chapter 364 of the Code of Iowa 2023. Section 3.The Company shall furnish reasonable, adequate and efficient natural gas service to the residents of the City and shall maintain its systems in reasonable repair and working order and provide adequate facilities for such maintenance. The Company’s equipment, including all distribution facilities, shall be installed in accordance with good engineering practices and shall be located, erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in accordance with the rules and regulations of the Iowa Utilities Board, Commission, or its successor, and any other governmental regulatory body with jurisdiction, so as not to endanger or interfere with the lives of persons, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic to public ways, places and structures. The erection, installation, construction, replacement, removal, repair, maintenance, and operation of the natural gas system shall be in accordance with all applicable laws, regulations and codes of the State and all applicable ordinances, regulations and codes of the City. Section 4. The Company shall have the right to erect, install and maintain all necessary distribution facilities, gas mains, service lines, pipes and equipment for the distribution of natural gas in, on, over or under any public right of way, easement, street or alley in the City, but all said equipment and facilities shall be placed as not to interfere with the construction of any water pipes, drains or sewers, or the flow of water therefrom, or streets, sidewalks or other public infrastructure which have been or may hereafter be located by authority of the City, and further providing the same shall be placed in accordance with this franchise and any regulations the City may from time to time adopt or amend regarding the placement of facilities or structures of utilities, and other right-of-way users facilities or structures, in the right-of-way. Section 5. This franchise shall not be exclusive and shall not restrict in any manner the right of the City Council or any other governing body of the City, in the exercise of any regulatory power which it may now have, or hereafter be authorized or permitted, by the laws of the State of Iowa. Section 6. Annually, and more frequently if necessary at the request of either party, the City and the Company shall meet to review and plan for the next 12 months of infrastructure construction, replacement, enhancements or maintenance within the City. Where possible, following the procedures and standards applicable to the growth and development of the City, the parties will develop plans to facilitate the placing of gas facilities in conjunction with City projects in the public right of ways. Section 7. The Company shall, at its cost and expense, locate and relocate its installations in, on, over or under any public right of way, easement, street or alley in the City as the City may at any time reasonably require for the purposes of facilitating the expansion, construction, reconstruction, maintenance or repair of a street, road or alley, or any other public improvement. The Company shall not be required to relocate its facilities at Company expense if said relocation is for the sole benefit of a non-government entity if the City has not required the public improvement to be performed or installed by said non-governmental entity. The relocation required hereunder shall be completed by the Company no later than ninety (90) days following written notice by the City to the Company of the construction start date for any such expansion, construction, reconstruction, maintenance or repair of a street, road or alley, or any other public improvement. The Company shall not be required to permanently relocate, at its cost and expense, Company facilities in the public right of way that have been previously relocated at Company expense at the direction of the City for a street or alley expansion at any time during the previous five (5) years. The City may prohibit Company’s expansion of use of the right-of-way if there is insufficient space to accommodate the expanded use and the City has provided a reasonable alternative location to the Company. Section 8. In making excavations in any streets, avenues, alleys and public places for the excavation of conduits or the for the installation, maintenance or repair of gas pipes, conduits, or apparatus, the Company shall not unreasonably obstruct the use of the streets, and shall replace the surface, restoring the original condition as nearly as practicable and provided such other requirements imposed by the City’s ordinances or regulations existing now or in the future. Section 9. Upon reasonable request the Company shall provide the City, on a project specific basis, information indicating the horizontal location, relative to boundaries of the right of way, of all equipment which it owns or over which it has control that is located in City right of way, including documents, maps and other information in paper or electronic or other forms (“Information”). At the request of the Company, any information requested with respect to the location or type of equipment which the Company maintains or plans to install in the right-of-way, which qualifies as trade-secret Information under Iowa Code Section 550.1 et seq., shall be treated as a trade-secret Information in accordance with Iowa Code Section 22.1 et seq., pertaining to examination of public records, or which qualifies to be kept confidential under any provision of Iowa Code Section 22.1 et seq. The Company and City recognize that some or all of the Information provided may, under current Iowa law, constitute public records, but that nonetheless, some Information provided may be considered to be confidential under state or federal law or both. Therefore, the City shall not release any Information with respect to the facilities which the Company owns or controls in the right of way which may constitute a trade secret or which may otherwise be protected from public disclosure by state or federal law. The City shall provide the Company written notice of a request to release Information to allow the Company to determine if the Information sought is confidential. The Company shall respond to the City within 10 business days of receiving the City’s written notice request. If requested by the Company, the City shall not release any such data except by court order, provided, however, the City reserves the right to disagree with the Company determination that the information is confidential, in which case the Company shall be given notice in order that the Company may seek injunctive relief. In the event the City agrees the information is confidential, or that a court determination is required to determine if the Information is confidential, the City shall defend or bring necessary court actions, provided, however, that in the event the City refuses to release records, or the City itself brings an action to determine if records are confidential, the City may tender the defense or prosecution of such legal actions to the Company and the Company shall accept such tender. Section 10. 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. Section 11. The Company shall indemnify and save harmless the City from any and all claims, suits, losses, damages, costs or expenses, on account of injury or damage to any person or property, caused or occasioned in whole or in part, by the Company’s negligence in construction, reconstruction, excavation, operation or maintenance of the gas facilities authorized by this franchise; provided, however, that the Company shall not be obligated to defend, indemnify and save harmless the City for any costs or damages arising from the negligence of the City, its officers, employees or agents. Section 12. The Company shall construct, operate and maintain its facilities in accordance with the applicable regulations of the Iowa Utilities Board or its successors, and any and all other applicable Federal, State and Local laws or regulations. Section 13. During the term of this franchise, the Company shall furnish natural gas in the quantity and quality consistent with applicable Iowa laws and regulations. Section 14. In consideration of the right to construct and maintain such gas facilities and equipment along, upon, across and under the streets, highways, avenues, alleys, bridges and public places of the City the City reserves the right to impose upon the Company and, by its acceptance of this franchise, it agrees that there shall be collected from Company's customers within the corporate limits of the City and remitted by the Company to the City, a franchise fee in an amount equal to a percentage of the gross receipts derived by the Company from the transmission or distribution of natural gas to customers within the corporate limits of the City (excluding, however, the sale of natural gas to the City), or assessed or charged in any other manner the City deems appropriate and consistent with applicable laws as may be changed from time to time, as may be established by the City by separate ordinance imposing such a Franchise Fee duly enacted by the City in the manner required by applicable Iowa Law. The City shall give the Company 90 days written notice of the effective date of any franchise fee imposed by the City on the customers of the Company located with in the corporate limits of the City. In the event that a Franchise Fee is imposed by the City: A. The franchise fee shall be remitted by the Company to the City on or before the last business day of the month following the close of the calendar quarter in which the franchise fee is charged. B. The Company will use its best efforts to commence collection of franchise fees on or before the first Company billing cycle of the first calendar month following ninety (90) days of receipt of Information required of the City to implement the franchise fee, including the City’s documentation of customer classes subject to or exempted from City-imposed franchise fee, if any. C. City shall be solely responsible for identifying customer classes subject to or exempt from paying the City imposed franchise fee. D. The Company shall have no obligation to collect franchise fees from customers in annexed areas until and unless such ordinances have been provided to the Company by certified mail. The Company will use its best efforts to commence collecting franchise fees in the annexed areas no later than sixty (60) days after receiving annexation ordinances from the City. E. Company shall not, under any circumstances be required to return or refund any franchise fees that have been collected from customers and remitted to the City. F. With respect to the distribution or transportation by the Company of natural gas sold to the customer by a third-party supplier of the commodity, the percentage of gross receipts shall be applied to the customer’s full cost of gas delivered within the City, including all costs of acquisition, ownership, and transportation whereof, wherever incurred. In determining the amount of the fee, the Company may presume that the customer’s commodity cost of gas is the same as if the gas were sold by the Company, unless a different cost is provided by Customer to Company. Section 15. The Company shall have the power to condemn private property for the purpose of providing natural gas pursuant to this franchise to the extent necessary to serve a public use and in a reasonable relationship to an overall plan of distributing natural gas pursuant to this franchise in the public interest upon approval of the City Council. The Company must establish the necessity for each taking of private property, and when so established, the City Council may approve the condemnation of the private property by resolution. Any such exercise of the eminent domain powers shall be conducted in accordance with the Waukee Municipal Code and Iowa Law. In the exercise of eminent domain powers pursuant to this provision, the Company shall be responsible for any amounts awarded. In the event the City incurs expenses related to the Company’s exercise of the eminent domain power granted in this ordinance, in addition to the normal costs of internal processing of its request to receive and its exercise of eminent domain powers, the Company will reimburse the City for its reasonable extra expenses. Section 16. Before finalizing plans for any construction, expansion, modification or relocation of its facilities, the Company shall submit copies of the plan to the City. Said plans shall comply with federal state and local laws and ordinances and applicable design standards. The Company shall not use any method of construction in connection with any work undertaken by Company which may result in the cutting of any pavement unless the method is first approved in writing by the City Engineer. Plans submitted upon and after the effective date of this franchise shall identify Company Facilities proposed to be located in the right of way and those that would be located on property owned in fee by the Company or on private easements. In the event of an emergency situation, the Company is authorized to proceed with excavation and repair prior to submitting plans to the City and receiving City approval, however, any such excavation or repair must be completed in accordance with all applicable standards and policies of the City applicable to such work and all property, pavement and appurtenances effected by said work restored as near as practicable to it original condition. The Company shall notify the City as soon as possible either during or after the repair has been completed. Nothing herein shall be construed to effect or otherwise modify the Company’s relocation responsibilities as provided herein. Section 17. This Franchise is for the purpose specified herein and for no other purpose. This Franchise does not authorize Company to utilize its facilities in the provision of communication, data, media or any other purpose not specified herein within the Rights of Way. In the event that Company desires to utilize its facilities for another purpose or purposes, Company agrees that it must obtain authorization from the City under this franchise prior to such use. Section 18. This franchise shall apply to and bind the City and the Company, their successors and assigns; provided that any assignment by the Company or successor to the Company, shall be subject to the approval of the City Council by resolution, which shall not be unreasonably withheld. The City shall have 60 days from the effective date of the assignment, or designation of successor in interest, to adopt the resolution. If the City fails to adopt a resolution affirming or rejecting the assignment during the 60 day period the assignment or successor in interest shall be deemed approved. Section 19. This franchise is limited to natural gas service. No other services shall be provided to the public by the Company pursuant to this franchise. Section 20. If any section, provision, or part of this ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the ordinance as a whole or any section, provision, or part thereof not adjudged invalid or unconstitutional. Section 21. This ordinance and the rights and privileges herein granted shall become effective and binding upon Company’s commencement of gas service pursuant to the Asset Purchase Agreement by and between the Company and the City which shall be the date on which the last of the following occurs, whichever is later: 1) approval and publication of this ordinance in accordance with Iowa law and acceptance by the Company; 2) Iowa Utility Board approval of discontinuation and transfer of service by the City to Company, and 3) satisfaction of all contingencies set forth in the Asset Purchase Agreement dated April 21, 2025. PASSED AND APPROVED BY THE COUNCIL this ____ day of ______________, 2025. CITY OF WAUKEE, IOWA By: ____________________________ Courtney Clarke, Mayor ATTEST: __________________________________ Rebecca D. Schuett, City Clerk I, Rebecca D. Schuett, City Clerk of the City of Waukee, Iowa, hereby certify that the above and foregoing is a true copy of Ordinance No. __________, passed by the City Council at a meeting held _______________, 2025, and signed by the Mayor ______________, 2025, and published as provided by law on _______________, 2025. _____________________________ (OFFICIAL SEAL) Rebecca D. Schuett, City Clerk