ORD 2021-21 Electric Franchise Elk River Municipal 2021.10.25ORDINANCE 1'4 0.2021-21
CITY OF OTSEGO
WRIGHT COUNTY, MINNESOTA
ELECTRIC FRANCHISE ORDINANCE
AN ORDINANCE GRANTING TO ELK RIVER MUNICIPAL UTILITIES, A MINNESOTA
MUNICIPAL UTILITY OPERATING PURSUANT TO MINNESOTA STATUTES,
SECTIONS 412,321 TO 412.391, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE
FRANCHISE TO CONSTRUCT, OPERATE, REPAIR, AND MAINTAIN IN THE CITY OF
OTSEGO, WRIGHT COUNTY, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM
AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES
AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO THE
CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC WAYS AND
PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES.
THE CITY COUNCIL OF THE CITY OF OTSEGO, WRIGHT COUNTY, MINNESOTA,
ORDAINS:
SECTION 1. DEFINITIONS.
For purposes of this Ordinance, the following capitalized terms listed in alphabetical order•
shall have the following meanings:
City. The City of Otsego, County of Wright, State of Minnesota.
City Utility System. Facilities used for providing non -energy related public utility service
owned or operated by City or agency theleof, including sewer• and water service, street lighting and
traffic signals, but excluding facilities for providing heating, lighting or other forms of energy.
Company. Ells River Municipal Utilities, a Minnesota municipal utility operating under
Minnesota Statutes, Sections 412.321 to 412.391, its successors and assigns including all successors
and assigns that own or operate any part or parts of the Electric Facilities subject to this franchise.
Company Service Area. Those areas within the City to which the Company has been
assigned the right to provide electric service; as in effect on the Effective Date or as may be hereafter
revised.
Effective Date. The effective date of this Ordinance.
Electric Facilities. Electric transmission and distribution towers, poles, lines, guys, anchors,
conduits, fixtures, and necessary appurtenances owned or operated by Company for the purpose of
providing electric energy for public or private use.
Notice. A written notice served by one party on the other party referencing one or more
provisions of this Ordinance. Notice to Company shall be mailed to General Manager, Elk River
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Municipal Utilities, 13069 Orono Parkway, Elk River, MN 55330. Notice to the City shall be
mailed to the City Administrator, 13400 90th Street NE, Otsego, Minnesota 55330. Either party
may change its respective address for the purpose of this Ordinance by written notice to the other
party.
Ordinance. This electric franchise ordinance, also referred to as the Franchise.
Public Ground. Land owned by the City for park, open space or similar purpose, which is
held for use in common by the public.
Public Way. Public right -of --way within the City as defined in Minn. Stat. § 237.162, subd. 3.
SECTION 2. ADOPTION OF FRANCHISE.
2.1 Grant of Franchise. Pursuant to Minnesota Statutes Section 216B.36, City hereby
grants Company, for a period of 10 years fiom the date this Ordinance is passed and approved by the
City, the right to transmit and furnish electric energy for light, heat, power and other purposes for
public and private use within the Company Service Area. For these purposes, Company may
construct, operate, repair, and maintain Electric Facilities in, on, over, under and across the Public
Ways and Public Grounds of City, subject to the provisions of this Ordinance. Company may do all
reasonable things necessary or customary to accomplish these purposes, subject, however, to such
reasonable regulations as may be imposed by the City pursuant to separate ordinance consistent with
state law and to the further provisions of this Franchise.
2.2 Effective Date; Written Acceptance. This Franchise shall be in force and effect fiom
and after passage of this Ordinance, its acceptance by Company, and its publication as required by
law. This Ordinance shall terminate and be of no further effect if Company does not file a written
acceptance with the City within 90 days after publication.
2.3 Service and Rates. The service to be provided, the rates to be charged by Company
and the area within the City in which Company may provide electric service are subject to the
provisions of Minnesota Statutes, Section 21613.40.
2.4 Publication Expense. The expense of publication of this Ordinance will be paid by
City.
2.5 Dispute Resolution. If either party asserts that the other party is in default in the
performance of any obligation hereunder, the complaining party shall notify the other party of the
default and the desired remedy. The notification shall be written. Representatives of the parties must
promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not
resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate
further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator
is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the
selected mediator, either party may commence an action in District Court to interpret and enforce this
franchise or for such other relief as may be permitted by law or equity.
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2.6 Termination of Franchise. If the City and the Company are unable to agree on the
terms of a new franchise upon the expiration of this Franchise, this Ordinance shall terminate effective
upon the expiration of the aforementioned 10-year term and Company shall continue to furnish
electric energy within the Company Service Area as provided in Minnesota Statutes, Chapter 216B.
2.7 Assignment. This City agrees that the franchise granted under this Ordinance is
assignable by the Company to a successor company organized for purposes of delivering electric
energy and operating the Electric Facilities, subject to the City's consent, which shall not be
unreasonably withheld.
SECTION 3. LOCATION, OTHER REGULATIONS.
3.1 Location of Facilities. Electric Facilities shall be located, constructed, and maintained
so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways
and so as not to disrupt normal operation of the Public Way or any City Utility System. City
acknowledges Company's Electric Facilities, as they exist on the effective date of this Franchise, are
properly located and installed and do not interfere with City Utility System or with the safety and
convenience of ordinary travel along Public Ways. Electric Facilities shall be located on Public
Grounds as determined by the City. Company's construction, reconstruction, operation, repair,
maintenance, and location of Electric Facilities shall be subject to permits if required by separate
ordinance and to other reasonable regulations of the City to the extent not inconsistent with the terms
of this Franchise. Company may abandon underground Electric Facilities in place, provided at the
City's request, Company will remove abandoned metal or concrete encased conduit interfering with
a City project, but only to the extent such conduit is uncovered by excavation as part of the City
project.
3.2 Field Locations and Mapping. Company shall provide field locations for its
underground Electric Facilities within the City consistent with the requirements of Minnesota
Statutes, Chapter 216D and mapping information as required by federal and state law.
3.3 Street Openinfs. Company shall not open or disturb any Public Way or Public Ground
for any purpose without first having obtained a permit from the City, if required by separate ordinance,
for which the City may impose a reasonable fee, unless the City is receiving a franchise fee pursuant
to this Ordinance, in which case all permit fees will be waived. Permit conditions imposed on
Company shall not be more burdensome than those imposed on other utilities for similar facilities or
work. Company may, however, open and disturb any Public Way or Public Ground without
permission from the City where an emergency exists requiring the immediate repair of Electric
Facilities. In such event, Company shall notify the City by telephone to the office designated by the
City as soon as practicable. Not later than the second working day thereafter, Company shall obtain
any required permits and pay any required fees.
3.4 Restoration. After undertaking any work requiring the opening of any Public Way or
Public Ground, the Company shall restore the Public Ways or Public Grounds, including paving and
its foundation, in accordance with Minnesota Rules 7819.1100 and applicable City ordinances.
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3.5 Avoid Damage to Electric Facilities. Nothing in this Ordinance relieves any person
from liability arising out of the failure to exercise reasonable care to avoid damaging Electric Facilities
while performing any activity.
3.6 Notice of Improvements. The City must give Company reasonable notice of plans for
improvements to Public Ways or Public Ground where the City has reason to believe that Electric
Facilities may affect or be affected by the improvement. The notice must contain: (i) the nature and
character of the improvements; (ii) the Public Ways and Public Grounds upon which the
improvements are to be made; (iii) the extent of the improvements; (iv) the time when the City will
start the work; and (v) if more than one Public Way or Public Ground is involved, the order in which
the work is to proceed. The City shall give notice to Company a sufficient length of time in advance
of the actual commencement of the work, as reasonably possible, to permit Company to make any
necessary additions, alterations or repairs to its Electric Facilities.
3.7 Shared Use of Poles. Company shall make space available on its poles or towers for
City fire, water utility, police or other City facilities whenever such use will not interfere with the use
of such poles or towers by Company, by another electric utility, by a telephone utility, or by any cable
television company or other form of communication company. In addition, the City shall pay for any
added cost incurred by Company because of such use by City. Any facilities which the City attaches
to Company facilities shall be installed and maintained in accordance with the National Electrical
Safety Code (NESC).
SECTION 4. RELOCATIONS.
4.1 Relocation of Electric Facilities in Public Ways. In accordance with Minnesota
statutes and administrative rules, Company shall promptly and at its own expense, with due regard
for seasonal working conditions, permanently remove and relocate its facilities in the right-of-way
when it is necessary to prevent interference, and not merely for convenience of the local
government unit, in connection with: (1) a present or future local government use of the right-of-
way for a public project; (2) the public health or safety, or (3) the safety and convenience of travel
over the right-of-way. In the event the City requests the relocation, removal, replacement, or
reconstruction of Company's Electric Facilities for the convenience of the City, City shall
promptly reimburse Company for all of Company's costs and expenses related thereto.
4.2 Relocation of Electric Facilities in Public Ground. City may require Company, at
Company's expense, to relocate or remove its Electric Facilities from Public Ground upon a finding
by City that the Electric Facilities have become or will become a substantial impairment to the existing
or proposed public use of the Public Ground.
4.3 Projects with Federal Funding. Relocation, removal, or rearrangement of any
Company Electric Facilities made necessary because of the extension into or through City of a
federally aided highway project shall be governed by the provisions of Minnesota Statutes Sections
161.45 and 161.46 if funds for these purposes are available.
4.4 No Waiver. The provisions of this Franchise apply only to facilities constructed in
reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained
by Company for installations within a Company right-of-way acquired by easement or prescriptive
2i7967va 4
right before the applicable Public Way or Public Ground was established, or Company's rights under
state or county permit.
SECTION 5. TREE TRIMMING.
Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to
the extent Company finds necessary to avoid interference with the proper construction, operation,
repair, and maintenance of any Electric Facilities installed hereunder, subject to permit or other
reasonable regulation by the City, provided that Company shall save the City harmless from any
liability arising therefrom, except if said liability arises from the City's gross negligence or willful
misconduct.
SECTION 6. INSURANCE AND INDEMNIFICATION.
6.1. Insurance. The Company shall maintain insurance consistent with state law.
6.2 Indemnity of City. Company shall indemnify, keep, and hold the City free and
harmless from any and all liability on account of injury to persons or damage to property occasioned
by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the
Electric Facilities located in the Public Ways and Public Grounds. The City shall not be indemnified
for losses or claims occasioned through its own negligence except for losses or claims arising out of
or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans
or work. The City shall not be indemnified if the injury or damage results from the performance in a
proper manner of acts reasonably deemed hazardous by Company, and such performance is
nevertheless ordered or directed by City after notice of Company's determination.
6.3 Defense of City. In the event a suit is brought against the City under circumstances
where this agreement to indemnify applies, Company at its sole cost and expense shall defend the
City in such suit if written notice thereof is promptly given to Company within a period wherein
Company is not prejudiced by lack of such notice. If Company is required to indemnify and defend,
it will thereafter have control of such litigation, but Company may not settle such litigation without
the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to
third parties, a waiver of any defense or immunity otherwise available to the City; and Company, in
defending any action on behalf of the City, shall be entitled to assert in any action every defense or
immunity that the City could assert in its own behalf.
6.4 No Waiver. This Franchise shall not be interpreted to constitute a waiver by the City
or Company of any of their defenses of immunity or limitations on liability under Minnesota law,
including Minnesota Statutes, Chapter 466.
SECTION 7. VACATION OF PUBLIC WAYS.
The City shall give Company at least four (4) weeks prior written notice of a proposed
vacation of a Public Way. Except where required for a City improvement project, the vacation of any
Public Way, after the installation of Electric Facilities, shall not operate to deprive Company of its
rights to operate and maintain such Electric Facilities, until the reasonable cost of relocating the same
and the loss and expense resulting from such relocation is first paid to Company. In no case, however,
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shall City be liable to Company for failure to specifically preserve a right -of --way under Minnesota
Statutes, Section 160.29, as may be supplemented or amended from time to time. In accordance with
Minnesota Rules, Part 7819.3200, if the City's order directing vacation of the Public Way does not
require relocation of the Company's Electric Facilities, the vacation proceeding shall not be deemed
to deprive the Company of its right to continue to use the right-of-way of the former Public Way for
its Electric Facilities installed prior to such order of vacation, unless it would not be in the public
interest as contemplated by Minnesota Rules, Part 7819.3200.
SECTION 8. CHANGE INFORM OF GOVERNMENT.
Any change in the form of government of the City shall not affect the validity of this
Ordinance. Any governmental unit succeeding the City shall, without the consent of Company,
succeed to all of the rights and obligations of the City provided in this Ordinance.
SECTION 9. FRANCHISE FEE.
9.1 Fee Schedule. During the term of the franchise hereby granted, and in lieu of any
permit or other fees being imposed on Company, the City may impose on Company a franchise
fee by collecting the amounts indicated in a Fee Schedule set forth in a separate ordinance from
each customer within the Company Service Area in the designated Company Customer Class. The
parties have agreed that the franchise fee collected by the Company and paid to the City in
accordance with this Section 9 shall not exceed the following amounts.
Class
Residential
in C & I — Non-Dem
in C & I — Demand
LargeC&I
Public Street Ltg
Muni Pumping N/D
Muni Pumping — Dem
Fee Per Premise Per Month
9.2 Separate Ordinance. The franchise fee shall be imposed by a separate ordinance
duly adopted by the City Council, which ordinance shall not be adopted until at least 90 days after
written notice enclosing such ordinance has been served upon Company by certified mail. The fee
shall not become effective until the beginning of a Company billing month at least 90 days after
written notice enclosing such adopted ordinance has been served upon Company by certified mail.
Section 2.5 shall constitute the sole remedy for solving disputes between Company and the City
in regard to the interpretation of, or enforcement of, the separate ordinance. No action by the City
to implement a separate ordinance will commence until this Ordinance is effective.
93
Terms Defined. For the purpose of this Section 9, the following definiti
ons apply:
9.3.1 "Customer Class" shall refer to the classes listed on the Fee Schedule and
as defined or determined in Company's electric tariffs.
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9.3.2 "Fee Schedule" refers to the schedule in Section 9.1 setting forth the various
customer classes from which a franchise fee would be collected if a separate ordinance were
implemented immediately after the effective date of this Franchise. The Fee Schedule in the
separate ordinance may include new Customer Class added by Company to its electric tariffs after
the effective date of this Franchise.
9.3.3 "Gross Revenue" means all sums, excluding any surcharge or similar
addition to the Company's charges to customers for the purpose of reimbursing the Company for
the cost resulting from the franchise fee, received by the Company from the sale of electricity to
its customers in the Company Service Area.
9.4 Collection of the Fee. The franchise fee shall be payable quarterly and shall be
based on the amount collected by Company during the period for which payment is to be made by
imposing a surcharge equal to the designated franchise fee beginning on the agreed effective date
for the applicable customer classification in all customer billings for electric service in each class.
The payment shall be due the last business day of the month following the period for which the
payment is made. The franchise fee may be changed by ordinance from time to time, however,
each change shall meet the same notice requirements and not occur more often than annually and
no change shall require a collection from any customer for electric service in excess of the amounts
specifically permitted by this Section 9. The time and manner of collecting the franchise fee may
be subject to the approval of the Commission. No franchise fee shall be payable by Company if
Company is legally unable to first collect an amount equal to the franchise fee from its customers
in each applicable class of customers by imposing a surcharge in Company's applicable rates for
electric service. Company may pay the City the fee based upon the surcharge billed subject to
subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings.
Company agrees to disclose to the City (1) the total number of members in the City limits, (2) the
rate classification totals; and (3) the total amount collected. The Company shall not be required to
disclose identifiable customer or customer information or any other information regarding identified
customers. The Company agrees to provide at the time of each payment a statement summarizing
how the franchise fee payment was determined, including information showing any adjustments
to the total surcharge billed in the period for which the payment is being made to account for any
uncollectibles, refunds or error corrections.
9.5 Equivalent Fee Requirement. The separate ordinance imposing the fee shall not be
effective against Company unless it lawfully imposes and the City quarterly or more often collects
a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within
the City by any other energy supplier. The "same or greater equivalent amount" shall be measured,
if practicable, by comparing amounts collected as a franchise fee from each similar customer, or
by comparing, as to similar customers the percentage of the annual bill represented by the amount
collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales
for any energy use related to heating, cooling or lighting, or to run machinery and appliances. If
the Company specifically consents in writing to a franchise or separate ordinance collecting or
failing to collect a fee from another energy supplier in contravention of this Section 9.5, the
foregoing conditions will be waived to the extent of such written consent.
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SECTION 10. PROVISIONS OF ORDINANCE.
10.1 Severability. Every section, provision, or part of this Ordinance is declared separate
from every other section, provision, or part; and if any section, provision, or part shall be held
invalid, it shall not affect any other section, provision, or part. Where a provision of any other
City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance
shall prevail.
10.2 Limitation on Applicability. This Ordinance constitutes a franchise agreement
between the City and Company as the only parties, and no provision of this Franchise shall in any
way inure to the benefit of any third person (including the public at large) so as to constitute any
such person as a third party beneficiary of the agreement or of any one or more of the terms hereof,
or otherwise give rise to any cause of action in any person not a party hereto.
SECTION 11. AMENDMENT PROCEDURE.
Either party to this fianchise agreement may at any time propose that the agreement be
amended to address a subject of concern, and the other party will consider whether it agrees that the
amendment is mutually appropriate. If an amendment is agreed upon by both City and Company,
this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring
the provisions of the amendment, which amendatory ordinance shall become effective upon the
I
ling of Company's written consent thereto with the City Cleric within 90 days after the date of
I
inal passage by the City of the amendatory ordinance.
SECTION 12. PREVIOUS FRANCHISES SUPERSEDED.
This Franchise supersedes any previous electric fianchise granted by City to Company or its
predecessor.
ADOPTED this 25th day of October, 2021 by the City Council of the City of Otsego,
Minnesota.
Attest:
� 9
Audra Etzel, City Cleric
Date Published:
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Elk River
Municipal Utilities
December 15, 2021
City Administrator
City of Otsego
13400 901h Street NE
Otsego, MN 55330
RE: Electric Franchise Ordinance 2021-21
LtiIt UUL�Ip
oDEC 2 0 2021 L
C=�J
We received your Franchise Ordinance per mail October 27, 2021 and published in the October 30, 2021
edition of the Star News, The Elk River Municipal Utilities Commission met on December 14, 2021 and
passed a motion to accept the Otsego Electric Franchise Ordinance. Please consider this letter written
acceptance of this ordinance.
Per our email of November 17, 2021, we will await notice from you of adoption of a Franchise Fee
Ordinance and the proposed date for implementation of the Fee Ordinance by the three electric
providers in Otsego.
Regards,
I �x lvo� � / I 2
Theresa Slominski
General Manager