City of Durango | City Code

APPENDIX A FRANCHISES

Art. I. La Plata Electric Association, Inc., §§ 1--47

Art. II. Southern Union Gas Company, §§ I--XI

Art. III. Tele-Communications, Inc., §§ 1--32

ARTICLE I. LA PLATA ELECTRIC ASSOCIATION, INC.*

*Editor's note--The franchise granted by Ord. No. 1991-2, adopted Feb. 19, 1991, to La Plata Electric Association, Inc., has been included herein as App. A, Art. I, superseding the provisions of former Art. I, which contained the twenty-year franchise granted to Western Colorado Power Company by Ord. No. 1115, adopted June 2, 1970.

AMENDED

ORDINANCE NO. O-1991-2

AN ORDINANCE GRANTING A FRANCHISE BY THE CITY OF DURANGO, COLORADO, TO LA PLATA ELECTRIC ASSOCIATION, INC., ITS SUCCESSORS AND ASSIGNS, PROVIDING THE RIGHT TO FURNISH, SELL AND DISTRIBUTE ELECTRICITY TO THE CITY AND TO ALL PERSONS, BUSINESSES AND INDUSTRY WITHIN THE CITY; GRANTING THE RIGHT TO ACQUIRE, CONSTRUCT, INSTALL, LOCATE, MAINTAIN, OPERATE AND EXTEND INTO, WITHIN AND THROUGH SAID CITY ALL FACILITIES REASONABLY NECESSARY TO FURNISH, SELL AND DISTRIBUTE ELECTRICITY WITHIN THE CITY; GRANTING A NON-EXCLUSIVE RIGHT TO MAKE REASONABLE USE OF ALL STREETS AND OTHER PUBLIC PLACES AS HEREIN DEFINED, AS MAY BE NECESSARY TO THE EXERCISE OF SAID RIGHT; FIXING THE TERMS AND CONDITIONS THEREOF; AND DECLARING AN EFFECTIVE DATE.

WHEREAS, the city has requested an expression of interest from companies desiring to own and operate electric utilities within the City of Durango and, in response thereto, has negotiated a proposed franchise with the party responding to such request, La Plata Electric Association, Inc.; and

WHEREAS, the negotiated franchise has been reviewed and evaluated by the city staff and the staff has recommended to the Durango City Council that the proposed franchise be approved, subject to approval of the electorate as required pursuant to Article IX, Section 1 of the Charter of the City of Durango, Colorado; and

WHEREAS, the City of Durango has reviewed the legal, character, financial and technical qualifications of the proposed Franchisee, La Plata Electric Association, Inc., in full proceedings providing due process, and is desirous of awarding a franchise for electric service to said applicant;

NOW, THEREFORE, THE CITY OF DURANGO HEREBY ORDAINS:

Sec. 1. Grant of franchise.

The City of Durango hereby grants to La Plata Electric Association, Inc. (hereinafter "franchisee"), for the period specified herein, and subject to the conditions, terms and provisions contained in this ordinance, the exclusive right to furnish, sell and distribute electricity within the City of Durango (hereinafter "city"), to the city and to all residents of the city. Subject to the conditions, terms and provisions contained in this ordinance, the city also hereby grants to the franchisee the exclusive right to acquire, construct, install, locate, maintain, operate and extend into, within and through the city all facilities reasonably necessary to furnish, sell and distribute electricity within the city and a non-exclusive right to make reasonable use of the streets and other public places as may be necessary to carry out the terms of this ordinance subject to the city's prior right of usage for municipal purposes and subject to zoning, subdivision, permit and building code requirements. These rights shall extend to all areas of the city as it is now constituted, and to additional areas as the city may increase in size by annexation or otherwise. The city and the franchisee do not waive any of their rights under the statutes and constitutions of the State of Colorado and the United States except as otherwise specifically set forth herein.

Sec. 2. Definitions.

For the purpose of this franchise, the following words and phrases shall have the meaning given in this section. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" or "will" are mandatory and the word "may" is permissive. Words not defined in this section shall be given their common and ordinary meaning.

(a) City shall mean the City of Durango, Colorado and all of the territory within its present and future corporate boundaries.

(b) City council or council shall mean the City Council of the City of Durango, Colorado.

(c) Distribution facilities means that portion of the franchisee's electric system which delivers electric energy from the distribution substation breakers to the point of delivery to the customer, including all franchisee's devices connected to that system.

(d) Facilities means all physical components of the franchisee which are reasonably necessary to provide electricity into, within and through the city for distribution and sale within the city, and include, but are not limited to, plants, works, systems, transmission and distribution structures, lines, street lighting fixtures, equipment, pipes, mains, conduit, meters, transformers, underground lines, wires and cables.

(e) Franchise shall mean the licensure and grant of rights and obligations under this franchise to the franchisee pursuant to this ordinance.

(f) Franchise area shall mean that area within the corporate limits of the City of Durango.

(g) Franchisee shall mean La Plata Electric Association, Inc., its lawful successors and assigns, subject specifically to the conditions of transfer as more fully hereinafter set forth.

(h) Gross revenue shall mean all cash, payments or credits of any kind or nature received, either directly or indirectly, by the franchisee, its affiliates, subsidiaries, parent and any other person or entity in which the franchisee has a financial interest or which has a financial interest in the franchisee, arising from the sale of electric service to franchisee's customers within the City of Durango. The term gross revenue shall not include revenues accruing to the franchisee from any use of its facilities within the city by other entities or capital credits received by franchisee from generation and transmission cooperatives or other cooperatives.

(i) Official city representative or city manager means the city manager, his successor in office, or any officer designated by the city Charter as the chief executive officer for the city, and any employees of the City designated to act as the official city representative by the city manager, his successors, or said Charter officer, each of whom shall be authorized to act on behalf of the city under the terms of this franchise.

(j) Park or park land means a recreation area within the city owned and maintained as a park or park land by the city, whether or not officially so designated.

(k) Person shall mean any person, firm, partnership, association, corporation, company or organization of any kind.

(l) Public utilities commission or PUC means the Public Utilities Commission of the State of Colorado, or other authority succeeding to the regulatory powers of the Public Utilities Commission of the State of Colorado.

(m) Residents means all persons, businesses, industry, governmental agencies, and any other entity whatsoever, presently located or to be hereinafter located, in whole or in part, within the territorial boundaries of the city.

(n) Pubic way shall mean and refer to the surface of and the space above and below any public street, highway, freeway, bridge, land path, alley, court, boulevard, sidewalk, parkway, way, lane, public way, drive, circle, or other public right-of-way or public easement, including, but not limited to, public utility easements, dedicated utility strips, or rights-of-way dedicated for compatible uses and any temporary or permanent fixtures or improvements located thereon now or hereafter held by the city which shall entitle the city and the franchisee to the use thereof for the purpose of installing, operating, repairing and maintaining an electric transmission and distribution system. Public way shall also mean any easement now or hereafter held by the city within the city for the purpose of public travel, or for utility or public service use dedicated for compatible uses, and shall include other easements or rights-of-way as shall within their proper use and meaning entitle the city and the franchisee to the use thereof for the purposes of installing, transmitting or distributing franchisee's electric service or other service over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, compliances, attachments and other properties ordinarily necessary and pertinent to the electric distribution system. This definition does not include any of franchisee's private rights-of-way.

Sec. 3. Term of franchise.

The term of this franchise shall be twenty (20) years from the effective date hereof. Any renewals of this franchise shall comply with the provisions and requirements of applicable federal, state or local law and the Charter of the City of Durango, Colorado.

Notwithstanding the stated term of this franchise, this franchise shall be terminable by the City for cause, as more specifically hereinafter provided.

Sec. 4. Exclusion from franchise.

(a) This franchise does not grant to the franchisee the right, privilege or authority to engage in the community antenna (or cable) television business, although nothing herein contained shall preclude the franchisee (1) from permitting those lawfully engaged in such business to utilize the franchisee's facilities within the city for such purposes, or (2) from providing such service if appropriate authority is obtained.

(b) The right to use and/or occupy public ways and public places for the purposes set forth herein shall be exclusive to the franchisee; provided, however, the city reserves the right to itself to generate and distribute electric power and the use of public ways and other public places for such purposes.

(c) This ordinance does not grant to the franchisee the right, privilege or authority to use or occupy any parks or park land of the city currently used or so designated or as in the future may be so used or designated except to the extent that the franchisee is currently using or occupying said parks or park land and as otherwise authorized in writing by the city. Franchisee shall not expand its use or occupancy of said parks or park land except by specific written authorization of the city; provided, however, that nothing herein contained shall limit or restrict the franchisee's right to maintain, renovate, repair or replace any of franchisee's facilities currently occupying said parks or park land.

(d) The city retains the following rights with regard to this franchise:

(1) Except as otherwise specifically provided herein, to use, control and regulate, through the exercise of its police power, the use of public ways and other public places.

(2) To impose such other regulations, by ordinance, resolution or charter amendment, as may be determined by the city council to be necessary in the exercise of its police power to protect the health, safety and welfare of the public; provided, however, franchisee shall not be subject to nor required to comply with any ordinance directed solely at franchisee or which fails to place similar burdens upon persons or entities similarly situated. Nothing herein contained shall limit or restrict the franchisee's right to challenge the validity of any such regulations.

Sec. 5. Effective date.

This ordinance shall become effective upon May 1, 1991, conditioned upon the approval by the city council and execution by the mayor of the city and approval of the electorate concerning the issuance of a franchise to franchisee as required pursuant to Section 1 of Article IX of the Charter of the City of Durango, Colorado. As of May 1, 1991, the provisions of this franchise shall supersede all of the conditions of the existing franchise created by Ordinance No. 1115 except that the franchisee shall discharge and pay on or before June 30, 1991 all obligations and sums that shall have accrued under the provisions of the franchise being terminated.

Sec. 6. Franchise fee.

In consideration for the grant of this franchise, the franchisee shall pay the city a sum equal to four and sixty-seven hundredths percent (4.67%) of all gross revenues, as hereinabove defined, received from the sale and distribution of electricity to customers within the city. Payment of the franchise fee shall not exempt the franchisee from any lawful taxation upon its property or from sales and use taxes and from fees and taxes that are uniform and of general applicability within the City of Durango. All amounts paid to the franchisee by the city or any of its departments for electric service shall be excluded from computation of the franchise fee.

The franchise fee shall be paid to the city monthly within twenty (20) days of the close of each month. At the time payment of the franchisee fee is made from franchisee to the city, franchisee shall also provide to the city a monthly report of gross revenues, as herein defined, during the preceding month which substantiates the accompanying payment. The city reserves the right to require evidence of certified financial statements to support the franchise fee paid by the franchisee, and to otherwise audit the books and records of the franchisee as is deemed necessary by the city. In the event that any such audit shows that franchisee has underpaid the franchise fee, franchisee shall reimburse the city for the underpayment, together with any applicable interest. Should the audit reflect an underpayment of five thousand dollars ($5,000.00) or more, franchisee shall pay to the city the costs of the audit. Failure to pay franchise fees within thirty (30) days of the date due shall result in a one percent (1%) per month penalty for each month, or portion thereof, until the delinquent franchise fee has been paid to the city. Failure to pay franchise fees for a period of ninety (90) days or more shall be grounds for termination of this franchise as more specifically hereinafter provided.

Sec. 7. Payment of fee refundable.

In the event the franchisee is required or allowed by an appropriate authority having jurisdiction in the premises to make a refund or other adjustment in its rates to its customers, the franchise fee payments shall be similarly adjusted consistent with the order of refund or other adjustment. The franchisee shall also be allowed to adjust the franchise fee payments to reflect the net write-off of uncollectible accounts. Except as otherwise provided herein, in the event that the franchisee overpays the franchise fee in an amount less than or equal to five thousand dollars ($5,000.00), credit for the overpayment shall be taken by the franchisee against the next franchise fee payment. If the franchisee overpays the franchise fee in an amount greater than $5,000.00 but less than $25,000.00, the city shall be allowed up to three (3) years within which to refund the overpayment. If the overpayment is in an amount greater than $25,000.00, the city shall be allowed up to five (5) years within which to refund any such overpayment. All refunds shall take the form of a credit against the amounts otherwise owing by the franchisee to the city as franchise fees. In no event shall the city be required to refund any overpayment made as a result of an error by the franchisee which occurred more than three (3) years prior to the discovery of the franchisee's error. Upon discovery by the franchisee of any such error by the franchisee, the franchisee shall promptly notify the city of the discovery.

Sec. 8. Contract obligation.

This franchise ordinance constitutes a valid and binding contract between the city and the franchisee. In the event that the franchise fee specified in this ordinance is declared illegal, unconstitutional or void for any reason by any court or other proper authority, the franchisee shall be contractually bound to pay to the city a monthly occupation tax or fee in an aggregate amount that would be, as nearly as practical, equivalent to the amount which would have been paid by the franchisee as a franchise fee hereunder.

Sec. 9. Supervision by city manager.

The city manager, or official city representative, is hereby designated the official of the city having full power and authority to take appropriate action for and on behalf of the city and its inhabitants to enforce the provisions of this franchise and to investigate any alleged violations or failures of the franchisee to comply with the provisions hereof or to adequately and fully discharge its responsibilities and obligations hereunder. The failure or omission of said official city representative to so act shall not constitute any waiver or estoppel nor limit independent action by other city officials.

In order to facilitate such duties of the said official city representative, the franchisee agrees:

(a) To allow said official city representative reasonable access to any part of the franchisee's plant, works and systems, and that said city official may observe and require tests to determine the quality of the electric service supplied to the customers of the franchisee, with particular reference to the standards of service provided herein and as may be prescribed by the rules and regulations and tariffs of the franchisee approved by the Rural Electrification Administration ("REA") or the public utilities commission from time to time, if any.

(b) That the official city representative may investigate and convey to the franchisee any complaint of any customer of the franchisee within the city with respect to the quality and price of electric service and the appropriate standards thereof.

(c) Upon request to submit to said official city representative copies of all filings which the franchisee makes with the REA or the public utilities commission, including, but not limited to, its annual report, all advice letters, and applications, together with existing transcribed supporting testimony and exhibits. In addition, irrespective of whether the city intervenes in a proceeding before the public utilities commission, the franchisee, upon the city's reasonable notice, not to exceed three (3) business days, will provide the city access to all non-confidential documents provided other parties in connection with any such proceeding.

(d) To grant said official city representative reasonable access to the books and records of the franchisee insofar as they relate to any matters covered by this franchise and to provide said city official with such reasonable and necessary reports containing or based upon information readily obtainable from the franchisee's books and records as the city may from time to time request with respect to the electric service supplied under this franchise.

Sec. 10. Adequate supply at lowest reasonable cost.

The franchisee shall at all times take all reasonable and necessary steps to assure an adequate supply of electricity to its customers at the lowest reasonable cost consistent with long-term reliable supply. Should electric power be made available to the franchisee, from whatever source, including any agency or instrumentality of the United States of America, at less total cost than the total cost which would be incurred by the franchisee to supply such electric power from its own systems and under circumstances which will not adversely affect the franchisee or its operations, the franchisee will attempt to purchase such lower cost electric power and to pass on to its customers any savings resulting from the purchase. If the supply of electricity to its customers should be interrupted, the franchisee shall take all necessary and reasonable actions to restore such supply at the earliest practicable time.

Sec. 11. City review of construction design.

Except in emergency circumstances, prior to construction of any significant electric facilities (i.e. substations and transmission lines), or of a building or similar structure within the city, the franchisee shall furnish to the city a description of the type and proposed location thereof, unless the city has previously notified the franchisee, in writing, that such notice is unnecessary. In addition, upon request, the franchisee shall assess and report on the impact of its proposed construction upon the city's environment. Such plans and reports may be reviewed by the city to assure, at a minimum:

(a) That all applicable laws including building and zoning codes and air and water pollution regulations are complied with; and

(b) That city standards pertaining to landscaping are complied with.

The franchisee shall comply with all regulatory requirements of the city and shall incorporate all other reasonable changes requested by the city consistent with prudent engineering practice.

Sec. 12. Compliance with city requirements.

The franchisee will comply with all city requirements regarding curb and pavement cuts, excavation, digging and related construction activities as well as any reasonable direction provided by the city regarding placement of poles and other similar facilities within the city. In no event shall such city direction interfere with prudent engineering practices of the franchisee.

The company and the city shall exchange copies of their reports regarding annual and long-term planning for capital improvement projects with descriptions of construction activities including, to the extent known, the timing and method of construction. Such reports shall be exchanged within thirty (30) days after the issuance thereof. Except for emergencies, all installations shall be coordinated with the city's municipal planning and street improvement programs.

Sec. 13. Installation and maintenance of facilities.

(a) All structures, lines and equipment erected by franchisee within the city shall be so located as to cause minimum interference, as determined by the city, consistent with prudent engineering practice, with the proper use of public ways and public places, and so as to cause minimum interference with the rights or reasonable convenience of property owners. The franchisee shall submit to the city plans for construction of any transmission line extension within the city for approval of location prior to the commencement of construction. Any plans submitted for such approval shall be approved or denied within fifteen (15) business days of submittal. Failure to approve or deny within said fifteen (15) day period shall be deemed approval of the submitted plans. Approval of location shall not be unreasonably withheld by the city. Any construction in streets, alleys or public ways shall comply with sections 21-66 and 21-68 of the City Code and the franchisee or its contractor shall also submit, prior to construction, a traffic control plan consistent with Policy 84-3 of the city, a copy of which has been furnished to the franchisee. Where poles, conduits or other wire-holding structures of any public utility are available for use by franchisee, the franchisee shall use such poles, conduits and structures if the permission and consent of such public utility can be obtained by franchisee and such use is consistent with prudent engineering practice.

(b) In cases of franchisee's disturbance of any public way or public place, franchisee shall, at its own cost and expense, and in a manner approved by the city, replace and restore such public way or public place in as good a condition as existed before the work involving such disturbance was commenced, such reasonable determination to be made by the city in accordance with applicable street standards as adopted by the city. All franchisee's structures, lines, equipment and connections in, over, under and upon all streets shall be kept and maintained by the franchisee in a safe and suitable condition, and in good order and repair as determined by the city in accordance with prudent engineering practice. In the event that the city incurs any out of pocket expenses paid to third-parties who are not employees of the city to obtain compliance with the franchisee's use of any public way or public place, franchisee shall reimburse the city for such expenses reasonably incurred.

(c) Upon receipt of reasonable advance notice, not to be less than five (5) business days, the franchisee shall, at its own expense, protect, support, temporarily disconnect, temporarily relocate in the public way, or temporarily remove from the public way, any property of the franchisee when lawfully required by the city by reason of traffic conditions, public safety, freeway and street construction, change or establishment of street grade, installation of sewers, drains, gas or water pipes, or any other type of public structures or improvements by the city; provided, however, franchisee shall in all cases have the right of abandonment of its property. If public funds are separately available to any utility using such public way for the purpose of defraying the cost of such disconnection, temporary relocation or temporary removal, such funds shall also be made available to the franchisee.

(d) Any fixtures placed in any public way by franchisee shall be placed in such a manner as not to interfere with the usual travel on such public way as determined by the city.

(e) Franchisee shall, upon request of any person holding a special transport permit issued by the city, temporarily raise or lower its wires to permit the moving of buildings. The expense of such temporary removal or raising or lowering of wires shall be paid by the person requesting the same, and the franchisee shall have the authority to require such payment, in advance. Franchisee shall be given not less than forty-eight (48) hours advance notice to arrange for such temporary wire relocation.

(f) Upon forty-eight (48) hours advance notice to the city, franchisee shall have the authority to trim trees that are overhanging public ways and public places of the franchise area, so as to prevent the branches of such trees from coming in contact with the wires of franchisee. Notice shall not be required of franchisee in cases of emergency. At the option of the city, such trimming may be done by the city or by a third-party under the city's supervision and direction at the reasonable expense of the franchisee. Should the trimming of trees by franchisee result in the destruction of any otherwise healthy trees, franchisee shall be responsible for the reasonable cost of replacement or reasonable compensation to the owner thereof. All pruning, trimming or removal of trees shall be accomplished in accordance with the requirements of sections 26-56 through 26-62 of the Durango City Code.

(g) The city shall have the right to make additional use, for any public or municipal purpose, of any conduits controlled or maintained by or for franchisee in any public way, provided such use by the city does not interfere with the present or future reasonable usage of such conduits by franchisee. In the event of such usage, the city shall indemnify and hold harmless the franchisee against and from any and all claims, demands, causes of action, cost or liabilities of every kind and nature whatsoever arising out of such use of the franchisee's conduits, inclusive of reasonable attorney's fees. The size of any conduit utilized by franchisee for extension of transmission lines or distribution lines shall be of sufficient size, as approved by the city, to allow use by other franchisees of the city or the city consistent with prudent engineering practice. Franchisee shall also have the right to make additional use of conduits controlled or maintained exclusively by the city, and shall indemnify and hold harmless the city against and from any and all claims, demands, causes of action, costs or liabilities of every kind and nature whatsoever arising out of such use of the city's conduits, inclusive of reasonable attorney's fees.

Sec. 14. Permanent relocation of franchisee's facilities.

If at any time the city requests the franchisee to permanently relocate any facilities installed or maintained in public ways pursuant to this franchise or previous franchises, in order to permit the city to make any use of public ways to construct any public improvement or to build any public project, such relocation shall be made by the franchisee at its expense and shall be completed within a reasonable time not to exceed one hundred eighty (180) days from the date on which the city requests that such relocation work commence; provided, however, that such time period may be enlarged with the approval of the city, which approval shall not be unreasonably withheld. The franchisee shall, in any event, be granted an extension of time for completion of the relocation equivalent to any delay caused by conditions not under franchisee's control. Following the relocation of franchisee's facilities, all property disturbed by said relocation shall be restored to substantially its former condition by the franchisee at its expense. Except where required to serve the city as a customer, nothing herein contained shall be construed to impose any obligation upon the city to make any payment for any relocation of franchisee's facilities. Nothing herein contained shall be construed to require relocation of franchisee's facilities within private easements or privately held property rights of the franchisee.

Sec. 15. Non-interference with public works.

The franchisee's facilities shall not interfere in any way with the city's telecommunication facilities, traffic signal lights or with water or sewer mains or other municipal uses of public ways or public places. All such facilities shall be installed on city and private property so as to cause minimal interference with such public works facilities.

Sec. 16. Restoration of service.

In the event the franchisee's electric system, or any part thereof is partially or wholly destroyed or incapacitated, the franchisee shall use due diligence to restore its system to satisfactory service within the shortest practicable time.

Sec. 17. Underground electric lines.

Franchisee shall construct, operate and maintain all new distribution facilities within the city underground within a legally established easement. Nothing contained in this section shall require franchisee to construct, operate or maintain underground any ground-mounted appurtenances, pedestals or other related equipment.

When undertaking a project of undergrounding, either as a matter of franchisee's convenience or when required pursuant to this section, the city and the franchisee shall work with other utilities or companies which have their lines overhead to attempt to have all lines undergrounded as part of the same project. The franchisee shall not be required to pay the cost of any other utility or company in connection with work under this section.

Sec. 18. Compliance with air and water pollution laws.

In continued compliance with air and water pollution laws the franchisee shall use its best efforts to take measures which will result in its facilities and operations meeting the standards required by applicable city, county, state and federal air and water pollution laws and laws regulating the transportation of hazardous substances and wastes. Upon the city's request, the franchisee will provide the city with a status report of such measures.

Sec. 19. Technological improvements.

The franchisee shall generally introduce and install, as soon as practicable, technological advances in its equipment and service within the city when such advances are technically and economically feasible, and are safe and beneficial to the city and its residents. Upon request by the city, the franchisee shall review and promptly report advances which have occurred in the electric utility industry that have been incorporated into the franchisee's operations in the city during the previous year or will be so incorporated within the six (6) months following completion of said report.

Sec. 20. Service to new areas.

If, during the term of this franchise, the boundaries of the city are expanded, the franchisee shall extend service to residents of the newly incorporated areas in accordance with the franchisee's extension policy at the earliest practicable time. Service to annexed areas shall be in accordance with the terms of this franchise ordinance, including payment of franchise fees.

Sec. 21. Reports on operations of franchisee.

The franchisee shall submit reasonable financial and other necessary reports containing or based on information from the franchisee's books and records as the city may from time to time request with respect to the operations of the franchisee under this franchise, provided that such information can be provided at a reasonable cost. Such reports may be changed from time to time as may be mutually agreeable between the city and the franchisee. Initially, the city requests the following reports, on or before May 1 of each year commencing May 1, 1992:

(a) On an annual basis the return earned by the franchisee on operations and the rate base used for calculation of such return as is currently provided or as may in the future be provided to the public utilities commission in conjunction with various adjustment clause provisions.

(b) A list of all real property and leasehold interests in real property owned by the franchisee within the municipal boundaries of Durango as the same may be changed from time to time, excepting public and other easements. Upon request by the city, such listing shall include the legal description and land area of each listed property and shall be accompanied by a map showing the location of each listed property.

(c) Short term (less than two (2) years) and long-range (over two (2) years) plans for all capital improvements, construction and excavation within the city or affecting service to the city and its residents.

Sec. 22. Bills.

On request the franchisee shall provide the city with a complete listing of all the accounts for which the city is the customer, inclusive of location address.

Sec. 23. Joint use.

The franchisee shall permit use of its facilities by the city or other franchisees of the city so long as such grantees are not in competition with the franchisee and so long as such grantees obtain the permission of the city and pay to the franchisee the appropriate fees, if any; provided, such joint use shall not unreasonably interfere with the franchisee's use of these facilities, and provided also that said use does not create a safety hazard nor result in any additional expense or the assumption of any additional liability by the franchisee.

Sec. 24. Annexation to the city.

When any property owned by the franchisee is or becomes eligible for voluntary annexation to the city and is not simultaneously eligible for voluntary annexation to another municipal corporation, the franchisee shall petition to annex the same to the city upon request made by the city; provided, no condition of such annexation shall impair the franchisee's ownership or then existing use of its property and water or water rights for public utility purposes. Except as herein provided, the franchisee agrees to meet all terms and conditions imposed upon the annexation by the city that are no more stringent than those imposed generally upon property owners seeking annexation of their land to the city. The franchisee shall be exempt from a public donation of land, money or water rights arising from such mandatory annexation under this section to the extent that the land being annexed is committed, dedicated and being fully utilized by facilities related to generation, transmission or distribution of electric service under this ordinance, and provided further that said exemption from public donation shall not extend to any unimproved land or land not so directly committed, dedicated and currently used.

Sec. 25. City held harmless.

The franchisee shall construct, maintain and operate its facilities in a manner which provides reasonable protection against injury or damage to persons or property; provided, however, said obligation of the franchisee hereunder shall not increase or decrease its liability on third-party claims; and provided further that the franchisee's obligation to the city hereunder shall not be diminished by said exception. The franchisee shall hold the city harmless and indemnify the city from and against all lawsuits, liability, damage, claims, demands, judgment and losses whatsoever in nature, and reimburse the city for all its reasonable expenses arising out of the operations of the franchisee within the city and the securing of and the exercise by the franchisee of the franchise rights granted in this ordinance, including any third-party claims, administrative hearings and litigation. None of the city expenses reimbursed by the franchisee under this section shall be surcharged. Nothing herein contained shall obligate the franchisee to hold the city harmless and indemnify the city to the extent any lawsuits, liability, damage, claims, demands, judgments and losses shall have been found to have arisen out of or in connection with any negligent act, failure to act or intentional wrongdoing of the city or of its officers, agents or employees, by final decision of a court of competent jurisdiction in an action where the city is a party.

Sec. 26. Financial responsibility.

At the time of the execution of this ordinance, and from time to time at the city's request, not more frequently than annually, the franchisee shall submit to the city as a confidential document, proof of its ability to meet its obligation to indemnify the city as required by Section 25 of this ordinance. This proof may take the form of insurance coverage, adequate funding of self-insurance, or the provision of a bond. The city may require, from time to time, and the franchisee agrees to provide, additional reasonable funding of the franchisee's indemnification obligations in the event such obligations are self-insured. Nothing herein contained shall create any right in any third-party or cause the city to be liable to any party for a failure to so act.

Sec. 27. Payment of expenses incurred by city in relation to franchise ordinance.

At the city's option, the franchisee shall pay in advance or reimburse the city for expenses incurred in publication of notices, publication and codification of ordinances, and photocopying of documents arising from the negotiation and adoption of this franchise ordinance. None of the city's expenses reimbursed by the franchisee under this section shall be surcharged against Durango rate payers. Nothing contained in this section shall limit the franchisee's indemnification obligation to the city under Section 25 of this ordinance.

Sec. 28. Breach of contract.

In the event the franchisee fails to fulfill a substantial obligation under this ordinance after notice of default and a reasonable period within which to cure said default, the city shall have a breach of contract claim against the franchisee, in addition to any other remedy provided by law or elsewhere in this franchise ordinance.

Sec. 29. Consent of city required.

The franchisee shall not sell, transfer or assign this franchise or any rights under this franchise to another, by stock exchange or otherwise, excluding only corporate reorganizations of the franchisee not involving a third-party, unless the city shall approve in writing of such sale, transfer or assignment of the rights herein created. Approval of the sale, transfer or assignment shall not be unreasonably withheld.

Sec. 30. City's right to purchase or condemn.

The right of the city to construct, purchase or condemn any public utility works or ways, and the rights of the franchisee in connection therewith, as provided by the Colorado Constitution and Colorado statutes, are hereby expressly reserved.

Sec. 31. Negotiated purchase price or condemnation award.

Upon the exercise of the city's option to purchase franchisee's facilities, the parties shall negotiate in good faith to determine a mutually acceptable purchase price. No value shall be given to this franchise or to public rights-of-way. If the city and the franchisee cannot reach agreement as to the purchase price or acceptable payment terms within one hundred eighty (180) days after commencement of negotiations, the city may commence condemnation proceedings, and each party shall have the rights provided by law relating to condemnation; provided, however, no award shall be made for the value of this franchise or public rights-of-way.

Sec. 32. Continued cooperation by franchisee.

In the event the city exercises its option to purchase or condemn franchisee's facilities, the franchisee agrees that it will continue to supply any service it supplies under this ordinance, in whole or in part, at the city's request. The franchisee's facilities shall be available for continued service until nine (9) months after a final order is entered in a condemnation proceeding or the effective date of a purchase agreement between the parties; provided, however, said obligation to maintain the franchisee's facilities shall not exceed a twenty-four (24) month period after the termination of this franchise. The franchisee shall continue to provide service pursuant to the terms of this ordinance for said twenty-four (24) months until the city has either purchased or condemned the franchisee's facilities or alternative arrangements have been made to supply electricity to the city and its residents, whichever date shall earlier occur. If franchisee continues to provide service at the city's request after such purchase or condemnation, no franchise fees shall be payable to the city and the city shall bear the expense of maintaining and repairing the facilities necessary for the provision of electric service to the city.

The franchisee shall cooperate with the city by making available then existing pertinent records which are not privileged to enable the city to evaluate the feasibility of acquisition by the city of the franchisee's facilities. The franchisee shall not be obligated to conduct studies or accrue data without reimbursement by the city, but will make such studies if reimbursed its costs for the same. The franchisee shall take no action which could inhibit the city's ability to effectively or efficiently use the acquired facilities. At the city's request, the franchisee shall supply electricity for use by the city in the city-owned system at a rate and pursuant to terms and conditions determined by the parties through good-faith negotiations.

Sec. 33. Limitations on franchisee's removal.

If at the time of termination of the franchise granted under this ordinance no renewal has been negotiated between the city and the franchisee, the franchisee shall not be required nor shall it have a right to remove its facilities immediately from the public ways and public places. At the city's request and within a reasonable time not to exceed nine (9) months, the franchisee shall remove from the public ways and public places, at the franchisee's expense, all facilities belonging to the franchisee located above the surface of the ground which are not purchased by the city at the termination of the franchise. Further, the franchisee, at the request of the city, shall remove, at the franchisee's expense, all underground facilities which are not purchased by the city within nine (9) months after the receipt by the franchisee of written notice from the official city representative that said underground facilities constitute a hazardous condition or interfere with the municipal use of the subsurface of said public ways and public places. After said removal all public property shall be restored by the franchisee to its condition just prior to removal. The franchisee need not remove any property from said public ways and public places which it shall continue to use and maintain pursuant to contractual arrangements with the city. The parties agree to negotiate in good faith all necessary terms and conditions regarding usage and/or removal of facilities.

Sec. 34. Forfeiture.

If the franchisee fails to perform any of the terms or conditions of this franchise and such failure is not the result of a condition of force majeure, the city, acting by and through its council, may determine, after notice to the franchisee and hearing, that such failure is of a substantial nature. Upon receiving notice of such determination, the franchisee shall have a reasonable time, not to exceed six (6) months within which to remedy the violations unless the parties otherwise agree in writing. If after such reasonable time, corrective actions have not been successfully taken, the city, acting by and through its council, shall determine whether any or all of the rights and privileges granted the franchisee under this franchise shall be forfeited. Such determination shall be made by the council after a hearing with notice to the franchisee and an opportunity to be heard. For the purposes of this section, the terms force majeure shall mean acts of God, strikes, lockouts, acts of public enemies, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, civil disturbances, explosions, inability with reasonable diligence to obtain materials, and any other causes not within the control of the party claiming a suspension, which by the exercise of due diligence, such party shall not have been able to avoid or overcome.

Any such declaration of forfeiture shall be subject to judicial review as provided by law. Nothing herein contained shall limit or restrict any legal rights that the city or the franchisee may possess arising from any violation of this franchise.

Upon forfeiture, the franchisee shall continue to provide service to the city and its residents consistent with the obligations set forth in Section 32 of this franchise ordinance. If the franchisee fails to provide such service, it shall be liable for damages to the city and its residents.

Sec. 35. Right of first refusal.

In the event the franchisee at any time during the term of this franchise proposes to sell or dispose of any of its real property located within the city or any of franchisee's facilities, it shall grant to the city the right of first refusal with respect to the purchase of such property. The franchisee shall obtain a qualified appraisal on any such property and the city shall have sixty (60) days within which to exercise the right of first refusal by giving written notice to the franchisee. Should the city not provide the required written notice, the franchisee may proceed to negotiate with others for the sale of such property provided that the franchisee may not sell such property for an amount less than ninety-five percent (95%) of the appraised value without first providing the city an opportunity to purchase such property at such lesser price, in which event the city must notify the franchisee in writing within thirty (30) days if it wishes to purchase such property. It is understood that nothing in this paragraph shall preclude the franchisee from transferring real property or facilities to a subsidiary, affiliate, or corporate entity resulting from the merger, consolidation or reorganization of franchisee, without first according the city the rights referred to above, provided that if the transferee or successor proposes to sell or dispose of such property, it shall not do so without first affording the city such rights.

Sec. 36. Changing conditions.

Should the franchisee, during the term of this franchise, accept or enter into a franchise with any other Colorado municipality which contains terms, conditions or provisions different from those of this franchise, the franchisee shall offer the city such different terms, conditions, or provisions, which may be accepted by the city and become effective and binding upon the parties once submitted to and approved by a vote of the registered electors of the city at the next municipal election.

Sec. 37. Amendment to franchise.

At any time during the term of this franchise, the city through its city council, or the franchisee may propose amendments to this franchise by giving thirty (30) days written notice to the other of the proposed amendment or amendments desired, and both parties thereafter, through their designated representatives, will, within a reasonable time, negotiate in good faith in an effort to agree upon mutually satisfactory amendments.

No amendment or amendments to this franchise shall be effective until mutually agreed upon by the city and the franchisee and thereafter submitted to and approved by a vote of the registered electors of the city, if required under applicable law. Such election shall be at the expense of the respective party proposing such amendments.

Sec. 38. No waiver.

Neither the city nor the franchisee shall be excused from complying with any of the terms and conditions of this franchise by any failure of the other, or any of its officers, employees or agents, upon any one or more occasions to insist upon or to seek compliance with any such terms and conditions.

Sec. 39. Successors and assigns.

The rights, privileges, franchises and obligations granted and contained in this ordinance shall inure to the benefit of and be binding upon the franchisee, its successors and assigns as the same may succeed to the rights of the franchisee pursuant to Section 29 of this ordinance.

Sec. 40. Representatives.

Both parties shall designate from time to time, in writing, representatives who will be the persons to whom notices shall be sent regarding any action to be taken under this ordinance. Notice shall be in writing and forwarded by certified mail or hand delivery to the persons designated at the addresses hereinafter stated, unless the names and addresses are changed at the written request of either party, delivered in person, or by certified mail. Until any such change shall hereafter be made, notices shall be sent to the city manager and the franchisee's general manager. Currently, the addresses for the respective parties are as follows:

FRANCHISEE:
General Manager
P.O. Drawer H
Durango, Colorado 81302

CITY:
City Manager
949 East 2nd Avenue
Durango, Colorado 81301

Sec. 41. Reimbursement of costs.

In the event either party institutes litigation against the other for a breach of this ordinance or for an interpretation of this ordinance, the prevailing party shall be entitled to recover in conjunction with such litigation all costs related thereto, inclusive of reasonable attorney's fees.

Sec. 42. Severability.

Should any one or more of the provisions of this ordinance be determined to be illegal, invalid, or unenforceable, all other provisions nevertheless shall remain effective; provided, however, the parties shall forthwith enter into good faith negotiations and proceed with due diligence to draft replacement provisions that will achieve the original intent of the parties hereunder with respect to any provision which is held illegal, invalid, or unenforceable.

Sec. 43. Entire agreement.

This ordinance constitutes the entire agreement of the parties. There have been no representations made other than those contained herein.

Sec. 44. Third-parties.

Nothing herein contained shall be construed to provide rights to third-parties.

Sec. 45. City approval.

This grant of franchise shall not become effective unless and until approved by a majority vote of the city council and approved by a vote of the registered electors of the city.

Sec. 46. Franchisee approval.

The franchisee shall, within fifteen (15) days after approval of this franchise by a vote of the registered electors of the city, verify its written approval of this franchise and all of the terms and provisions set forth herein through execution by the franchisee's president or other authorized officer of the statement of acceptance as hereinafter set forth. At the time of such execution, the franchisee shall also deliver to the city a duly certified copy of a resolution adopted by the franchisee's board of directors approving the terms and provisions of this franchise and authorizing the corporate officer to execute the same on behalf of the franchisee. If the franchisee shall fail to timely accept the terms and provisions of this franchise or to furnish the certified copy of the board resolution as hereinabove required, this franchise shall, at the election of the city, become null and void.

Sec. 47. Ratification of prior franchise extension.

The city, through the approval of this ordinance, and the franchisee through the execution of the statement of acceptance, do hereby ratify the prior extension of the franchise agreement previously granted to Western Colorado Power Company under Ordinance No. 1115 from its date of expiration to the effective date of this franchise.

Approved and adopted this 15th day of January, 1991.

CITY OF DURANGO,
COLORADO

Leonel B. Silva

____________________
Mayor

Linda D. Yeager

____________________
City Clerk

STATEMENT OF ACCEPTANCE

The foregoing franchise is accepted and approved this 23rd day of April, 1991 with the express agreement that the City of Durango shall be held harmless from any and all liability, loss or damage arising out of the exercise by La Plata Electric Association, Inc., its successor and assigns, of any of the rights hereby conferred.

LA PLATA ELECTRIC

ASSOCIATION, INC.

Attest:

J.R. Le Platt

____________________
President

Lawrence R. Huntington

____________________
Secretary

STATE OF COLORADO	)
	) ss.
COUNTY OF LA PLATA	)

I, Linda Yeager, City Clerk of the City of Durango, La Plata County, Colorado, do hereby certify that Ordinance No. O-1991-2 was regularly introduced and read at a regular meeting of the City Council of the City of Durango, Colorado on the 15th day of January, 1991 and was ordered published in accordance with the terms and conditions of the statutes in such cases made and provided, in the Durango Herald, a newspaper of general circulation, from the 3rd day of February, 1991 through the 18th day of February, 1991, inclusive, excluding, however, February 9th and February 16th, 1991, prior to its final consideration by the City Council.

Linda D. Yeager

____________________
City Clerk

I further certify that Amended Ordinance No. O-1991-2 was duly adopted by the Durango City Council on the 19th day of February, 1991, and that in accordance with instructions received from the Durango City Council, said ordinance was published in the Durango Herald on the 3rd day of March, 1991.

Linda D. Yeager

____________________
City Clerk

ARTICLE II. SOUTHERN UNION GAS COMPANY*

*Editor's note--Printed herein is the franchise with Southern Union Gas Company adopted by ordinance number 1135 dated September 7, 1971.

----------

ORDINANCE NO. 1135

AN ORDINANCE GRANTING TO SOUTHERN UNION GAS COMPANY, A CORPORATION, ITS SUCCESSORS AND ASSIGNS, COMPANY HEREIN, FRANCHISE RIGHTS AND PRIVILEGES TO CONSTRUCT, OPERATE AND MAINTAIN IN THE CITY OF DURANGO, COLORADO, AS NOW OR HEREAFTER CONSTITUTED, WORKS, SYSTEMS AND FACILITIES FOR THE TRANSPORTING, HANDLING, STORING, SALE AND DISTRIBUTION OF NATURAL GAS INTO, OUT OF AND THROUGH SAID CITY FOR ALL PURPOSES; AND TO USE THE STREETS, AVENUES, EASEMENTS, ALLEYS, HIGHWAYS, SIDEWALKS, BRIDGES AND OTHER STRUCTURES AND PUBLIC PLACES AND GROUNDS OF SAID CITY FOR A PERIOD OF TWENTY (20) YEARS; PRESCRIBING IN CONNECTION THEREWITH CERTAIN RIGHTS, DUTIES, TERMS AND CONDITIONS HEREIN MENTIONED; PROVIDING FOR THE PAYMENT TO SAID CITY OF A PERCENTAGE OF CERTAIN REVENUES OF THE COMPANY FROM ITS OPERATIONS THEREIN; PROVIDING A RIGHT IN SAID CITY TO PURCHASE THE LOCAL GAS DISTRIBUTION SYSTEM AND RELATED PROPERTY; PROVIDING A MEANS OF DETERMINING SUCH VALUE; PROVIDING FOR CERTAIN OTHER MATTERS; CONTAINING A SEPARABILITY CLAUSE; PROVIDING FOR THE ACCEPTANCE HEREOF BY THE COMPANY; AND REPEALING CONFLICTING ORDINANCES.

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DURANGO, COLORADO:

Sec. I. [Grant of franchise.]

The City of Durango, Colorado (herein called the "city"), hereby grants to and vests in Southern Union Gas Company, a corporation authorized to transact and transacting business within this state (herein called the "company"), a franchise with the right to operate a gas plant, system, pipelines and works in the city, as now or hereafter constituted, and the authority, license, power and privilege to maintain, construct, build, equip, conduct, or otherwise establish and operate in said city, works, systems, plants and facilities (including those now in service) to use, sell, store, distribute, convey or otherwise conduct, serve, supply and furnish the inhabitants of said city and others, and to the city, whenever it may desire to contract therefor, natural gas for light, fuel, power, heat and any and all other useful purposes, and the company is hereby granted passage, right-of-way in, under, along and across, and the right to occupy and use in any lawful way during the life of this franchise every and any and all streets, avenues, easements, alleys, highways, sidewalks, bridges and other structures and public places and grounds of said city, both above and beneath the surface thereof, as same now exist, or may be hereafter constituted, for every and any such service, use, effect and lawful purpose as herein mentioned.

Sec. II. [Authority, responsibilities generally.]

The company is hereby authorized, licensed and empowered to do any and all things necessary or appropriate to be done in exercising the aforesaid franchise rights and privileges, provided such exercise does not conflict with water pipes, sewers or other authorized preexisting installations and that all work done in said streets, ways, places and grounds by the company shall be done with diligence and without unnecessary inconvenience to the public or individuals, and the company shall, within a reasonable time, restore all places excavated by it to their original condition as nearly as practicable.

Sec. III. [Transferability.]

The company shall have the right and privilege of transferring this franchise and all rights and privileges granted herein, and whenever the word "company" appears herein, it shall be construed as including its successors and assigns.

Sec. IV. [Franchise fee; books subject to inspection.]

The company, for and in consideration of the granting of this franchise and as rentals and compensation for its occupation of and use or easement over, upon and beneath the streets, avenues, easements, alleys, highways, sidewalks, bridges and public places and grounds in the city shall pay to the city each year during all the time this provision shall remain in force and effect a total aggregate sum equal to three and one-half (3 1/2) percent of the company's gross receipts during such year (exclusive of collections of privilege, sales, use or gross receipts taxes), for gas sold within the city under the company's rates in effect at the time, excepting therefrom, with city's approval however, the gross receipts for gas sold to industrial consumers under special contract and the gross receipts for gas sold to the city for its own use. The company shall make such payments monthly on or before the last day of each month for the preceding month while this provision shall remain in force and effect, each such payment to be based upon its gross receipts during the previous month. For the purpose of determining such gross receipts, the books of the company shall at all times be subject to inspection by duly authorized city representatives. Said payments shall be in lieu of any and all other rentals or compensation or franchise, license, privilege, instrument, occupation, excise or revenue taxes and any and all other fees, charges or exactions (except general ad valorem taxes, special assessments for local improvements, and sales or use tax imposed by the city upon the company and collected by the company from its customers) upon all or any portion of the business, revenue, property or activities of the company located or conducted within the city during the term of this franchise. Anything herein to the contrary notwithstanding, said payments shall continue only so long as the company is not prohibited from making the same by any lawful authority having jurisdiction in the premises. If the city shall levy or collect any such other franchise, license, privilege, instrument, occupation, excise or revenue taxes or any such other fees, charges or exactions, the amounts payable by the company to the city as provided in this section IV shall be reduced by the full amount thereof.

Sec. V. [Right of city to purchase system at fair market value.]

The city may at any time exercise its right and option, reserved to it by law, to purchase and acquire complete, upon payment to the company of the fair value thereof, the local plant and property of the company in Colorado used or useful exclusively for the delivery of natural gas to the company's customers in the city and its environs (herein called the "system"), including all the company's distribution, transmission and gathering pipelines and all facilities, rights-of-way, easements and appurtenances related thereto, but excluding all oil or gas leases, leasehold estates, interests therein and in the gas produced therefrom, gas wells and wellhead equipment and any and all appurtenances and other facilities related thereto. If the city and the company are unable to agree upon the fair value of the system, such value shall be fixed by three (3) competent, disinterested persons acting as appraisers, one to be appointed by the city, another to be appointed by the company within thirty (30) days after receiving notice of the city's said appointment, and the third to be appointed by the two (2) first selected within thirty (30) days after the company makes its appointment. Should the company fail to appoint its appraiser, or should the two (2) appraisers first selected by the company and the city, respectively, fail to select the third appraiser, within the time provided, then the company's appraiser and the third appraiser or the third appraiser only, as the case may be, shall be appointed upon application of either the city or the company by the person then acting as judge of the United States District Court for the district in which Durango, Colorado, is then located. The three (3) appraisers so selected shall proceed with due diligence to appraise and determine the fair value of the system, giving due consideration to pertinent data presented by the company and the city and to any and all other facts pertinent to such fair value (excluding any elements of value attributable to the company's franchise rights hereunder or pertaining to other contracts of the company). The joint determination of said three (3) appraisers as to such fair value, or a majority of them if all are unable to agree, shall be delivered in writing to the city and the company and shall be binding upon each for purposes of this section; provided, that the fair value of the system, and the appraisal thereof, shall in no event be less than the reproduction cost new, less observed depreciation, of the system at that time.

After said appraisal shall have been made, the city council shall as soon as may be submit the question of the purchase of the system, at the fair value as fixed by such appraisal, and the plan of acquisition of the system by the city as required by law, to popular vote; and if a majority of the qualified electors of the city shall vote in favor of the purchase of the system at such value and in favor of said plan of acquisition, the city may exercise its right to purchase the system by paying to the company, within ninety (90) days after such election, such fair value in cash, in consideration for which the company shall convey and transfer to the city by proper instruments in writing, and deliver up to the city, all of the system and shall surrender this franchise and any other franchise rights in the city then held by the company. Incident to such transfer the city shall assume and agree to perform all of the company's service obligations and the company shall be relieved therefrom.

The company shall not be chargeable with any of the expenses of the appraisal or election or related transactions, whether the vote is affirmative or negative.

Sec. VI. [Acceptance of franchise.]

This franchise shall be accepted by the company in writing, which acceptance shall be filed on or before the taking effect of this ordinance, and when so accepted and effective, this ordinance shall be a contract duly executed by and between the city and the company.

Sec. VII. [Effective date.]

This franchise and ordinance shall become effective upon its signature by the president of the city council and attestation by the city clerk after its adoption by the city council in the manner provided by law and favorable vote of the qualified electors.

Sec. VIII. [Right of city to make regulations.]

The grant of this franchise, and all rights, licenses and privileges herein, shall be subject to the right of the city, acting by and through its city council, to make all regulations which shall be necessary to secure, in the most ample manner, the safety, welfare and accommodation of the public, and to protect the public from danger or inconvenience in the operation of the works and business authorized herein. It is hereby declared that the public convenience and necessity of the City of Durango, and of its inhabitants, require the operation of the works and business herein authorized and, accordingly, it shall not be necessary for the company to obtain from the city any certificate of public convenience and necessity or other permit or approval, other than that contained in this franchise and ordinance, with respect to the acquisition, construction, maintenance or operation of facilities necessary or appropriate to the natural gas service herein authorized.

Sec. IX. [Severability.]

If any section, paragraph, subdivision, clause, phrase or provision hereof shall be adjudged unenforceable invalid or unconstitutional, the same shall not affect the validity hereof as a whole, or any part or provision other than the part so decided to be unenforceable, invalid or unconstitutional.

Sec. X. [Duration.]

This franchise shall continue in full force and effect for a period of twenty (20) years from its effective date.

Sec. XI. [Effect on prior ordinances.]

Upon the effective date of this ordinance, all rights and privileges heretofore granted by the city in and by its ordinance or ordinances granting gas franchise rights to the company or its predecessors in interest and/or supplementing the same, including (without being limited to) Ordinance No. 790, passed on April 5, 1949, shall be superseded by this ordinance and shall then be of no further force and effect, and all other ordinances or parts of ordinances in conflict hereto are hereby repealed.

Charles Self
___________________
President of the City Council

ATTEST:

Robert W. Rank

____________________
City Clerk Act.

ARTICLE III. TELE-COMMUNICATIONS, INC.*

*Editor's note--The franchise granted by Ord. No. 1991-1, adopted Feb. 19, 1991, to Tele-Communications, Inc., has been included herein as App. A, Art. III, superseding the provisions of former Art. III, which contained the fifteen-year franchise granted to Cable TV of Durango, Inc., by Ord. No. 1196, adopted Nov. 4, 1975.

AMENDED

ORDINANCE NO. O-1991-1

AN ORDINANCE GRANTING A NON-EXCLUSIVE FRANCHISE IN THE CITY OF DURANGO, COLORADO TO TELE-COMMUNICATIONS, INC. FOR THE OPERATION AND MAINTENANCE OF A CABLE TELEVISION SYSTEM, SETTING FORTH THE CONDITIONS ACCOMPANYING THE GRANT OF SAID FRANCHISE, PROVIDING FOR CITY REGULATION AND USE OF THE CABLE TELEVISION SYSTEM, AND DECLARING AN EFFECTIVE DATE.

WHEREAS, the city has requested an expression of interest from companies desiring to own and operate cable communication systems within the City of Durango and, in response thereto, has negotiated a proposed renewal franchise with Tele-Communications, Inc. through informal proceedings which do not constitute a waiver of rights by Tele-Communications, Inc. under Section 626 of the Cable Act; and

WHEREAS, the City of Durango has reviewed the legal, character, financial and technical qualifications of the proposed franchisee, Tele-Communications, Inc., in full proceedings providing due process, and is desirous of awarding a franchise for a cable communications system to said applicant; and

WHEREAS, public hearing has heretofore been held before the City Council of the City of Durango and the council has determined, subsequent to said public hearing, that the granting of the proposed franchise, subject to approval of the electorate, would be in the best interests of the citizens of the City of Durango;

NOW, THEREFORE, THE CITY OF DURANGO HEREBY ORDAINS:

Sec. 1. Grant of franchise.

The City of Durango hereby grants to Tele-Communications, Inc. (hereinafter "franchisee") the non-exclusive franchise and right and privilege to erect, construct, operate and maintain a cable television system in, upon, along, across, above, over and under the rights-of-way within the city and all such extensions thereto and additions thereto in the city, to-wit: Streets, alleys, non-specific easements for public or private utilities, and public ways. This grant shall allow wires, cables, underground conduit, manholes and other television conductors and fixtures necessary for the maintenance and operation of the cable television system for the interception, sale, transmission and distribution of television programs, video programming, audio programming, telecommunications, data transmissions, and other audio-visual and electrical signals and the right to transmit the same to and from the inhabitants of the city, all in strict accordance with the laws, ordinances and regulations of the United States of America, the State of Colorado, and the City of Durango, as now existing or hereafter adopted or amended and applicable interpretations thereof. It shall be the responsibility of the franchisee to determine the location and existence of all property and rights-of-way within the City of Durango.

Franchisee hereby accepts the franchise and warrants and represents that it has examined all of the provisions herein set forth, and accepts and agrees to all of said provisions, subject to applicable Federal, state and local law.

Sec. 2. Definitions.

For the purpose of this ordinance, the following terms, phrases, words, abbreviations and their derivation shall have the meaning herein given. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number.

Any terms that are defined in the Cable Act or in the Rules and Regulations of the Federal Communications Commission (FCC), but are not included in this ordinance, shall be incorporated herein by reference and shall be defined as the same appear in the Cable Act or in the Rules and Regulations of the FCC, as applicable.

(a) Affiliate means an entity which owns or controls, is owned or controlled by, or is under common ownership with the franchisee.

(b) Basic service is the package of programming service regularly provided to all subscribers that includes the re-transmission of local broadcast television signals.

(d) Cable communications system, cable television system, cable system, CATV or system shall mean a system of coaxial cables or other electrical or lightwave conductors and equipment used or to be used to originate or receive television or radio signals directly or indirectly off the air and to transmit them by way of cable to subscribers for a fixed or variable fee, including the origination, receipt, transmission, and distribution of voices, sound signals, pictures, visual images, digital signals, telemetry, or any other type of closed circuit transmission by means of electrical impulses, whether or not directed to originating signals or receiving signals off the air.

(e) City shall mean the City of Durango, Colorado and all the territory within its present and future boundaries.

(f) City council or council shall mean the City Council of the City of Durango, Colorado.

(g) Expanded service is a package of programming provided to certain subscribers which includes programming in addition to basic service as hereinabove defined.

(h) FCC means Federal Communications Commission, or a successor governmental entity thereto.

(i) Franchise shall mean the licensure and grant of rights and obligations under this franchise to the franchisee pursuant to this ordinance.

(j) Franchise area shall mean that area within the corporate limits of the City of Durango.

(k) Franchisee shall mean any person or group of persons who provide cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system.

(l) Gross revenue shall mean all cash, credits, property of any kind or nature or other consideration received from the Durango Cable System directly or indirectly by franchisee, as hereinafter defined, arising from or attributable to the operation of a cable system within the City of Durango, including, but not limited to:

(1) Revenue from all charges for services provided to subscribers of entertainment and nonentertainment services (including leased access fees);

(2) Revenue from all charges for the insertion of commercial advertisements upon the cable system;

(3) Revenue from all charges for the leased use of studios;

(4) Revenue, received from subscribers, from all charges for the installation, connection and reinstatement of equipment necessary for the utilization of the cable television system and the provision of subscriber and other services, regardless of whether such installation, connection, or reinstatement is undertaken by the franchisee or any third party;

(5) Revenue from the sale, exchange or use of any programming developed for community use or institutional users; and

(6) Revenue from any provider of programming to the franchisee.

Gross revenues shall include, valued at retail price levels, the value of any goods, services, or other remuneration in non-monetary form, received by the franchisee, in consideration for the provision of any advertising or other service in connection with the cable television system.

(m) Pay per view means an arrangement under which a charge is made to a subscriber for receiving a particular television program.

(n) Pay TV means an arrangement under which a charge is made to a subscriber for receiving a particular cable television network.

(o) Public, educational and governmental (PEG) access channels shall mean those channels, which, by the terms of this franchise, are required to be kept available by the franchisee for partial or total dedication to local public, educational and governmental access programming that is supported by the franchisee but is not subject to editorial control by franchisee.

(p) Person shall mean any person, firm, partnership, association, corporation, company or organization of any kind.

(q) Property of franchisee shall mean all property owned, installed or used by franchisee in the conduct of cable television system within the City of Durango.

(r) Public way shall mean the surface of and the space above and below any public street, highway, freeway, bridge, land path, alley, court, boulevard, sidewalk, parkway, way, lane, public way, drive, circle, or other public right-of-way, including, but not limited to, public utility easements, dedicated utility strips, or rights-of-way dedicated for compatible uses and any temporary or permanent fixtures or improvements located thereon now or hereafter held by the city which shall entitle the city and the franchisee to the use thereof for the purpose of installing, operating, repairing and maintaining the cable system. Public way shall also mean any easement now or hereafter held by the city within the city for the purpose of installing, operating, repairing and maintaining the cable system. Public way shall also mean any easement now or hereafter held by the city within the city for the purpose of public travel, or for utility or public service use dedicated for compatible uses, and shall include other easements or rights-of-way as shall within their proper use and meaning entitle the city and the franchisee to the use thereof for the purposes of installing or transmitting franchisee's cable service or other service over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, compliances, attachments, and other property as may be ordinarily necessary and pertinent to the cable system.

(s) Subscriber shall mean any person or entity lawfully receiving for any purpose the cable television services of the franchisee herein.

Sec. 3. Term of franchise.

The term of this franchise shall be fifteen (15) years from the effective date hereof. Any renewals of this franchise shall comply with the provisions and requirements of applicable federal, state or local law and the Charter of the City of Durango, Colorado.

Notwithstanding the stated term of this franchise, this franchise shall be terminable by the city for cause, as more specifically hereinafter provided.

That the franchise between Bresnan and the city is hereby extended from its expiration date of April 30, 2006, for a period of six (6) months, to expire on October 30, 2006. The franchise shall remain in effect, pursuant to the terms and conditions contained therein, until the new expiration date, or until a new agreement is entered into between the parties, or until the franchise is terminated pursuant to its terms.

(Ord. No. O-2006-8, § 1, 4-18-06)

Sec. 4. Franchise area.

The franchisee is authorized to operate throughout all of the territory within the existing and future territorial corporate limits of the City of Durango, which is coterminous with the franchise area.

Sec. 5. Effective date.

This agreement shall become effective on May 1, 1991, conditional upon execution by the mayor of the City of Durango and, subject to applicable law, approval of the electorate concerning the issue of the granting of the franchise to the franchisee as required pursuant to Section 1 of Article IX of the Charter of the City of Durango, Colorado.

Sec. 6. Non-exclusive franchise.

The rights herein granted for the purposes herein set forth shall be non-exclusive, and the City of Durango reserves the right to grant a similar use of said streets, alleys, easements, public ways and places to any person at any time during the period of this franchise; provided, however, that nothing contained herein shall be deemed to require the granting of additional cable television franchises, if, in the opinion of the city council, it is in the public interest to restrict such franchises to one or more.

Sec. 7. Police power.

In accepting this franchise, franchisee acknowledges that its rights hereunder are subject to the lawful police power of the City of Durango to adopt and enforce ordinances of general applicability necessary for the safety and welfare of the public; provided, however, franchisee shall not be subject to nor required to comply with any ordinance directed solely at franchisee or which fails to place similar burdens upon persons or entities similarly situated. Franchisee agrees to comply with such general laws and ordinances enacted by the City of Durango pursuant to such power.

Sec. 8. Construction and maintenance.

(a) All structures, lines and equipment erected by franchisee within the city shall be so located as to cause minimum interference, as determined by the city, with the proper use of streets, alleys, easements and other public ways and places, and so as to cause minimum interference with the rights or reasonable convenience of property owners. The franchisee shall submit plans for construction of any trunk line extension to the city for approval of location prior to the commencement of construction. Any plans submitted for such approval shall be approved or denied within five (5) business days of submittal. Failure to approve or deny within said five (5) day period shall be deemed approval of the submitted plans. Approval of location shall not be unreasonably withheld by the city. Any construction in streets, alleys or public ways shall comply with sections 21-66 and 21-68 of the City Code and the franchisee or its contractor shall also submit, prior to construction, a traffic control plan consistent with Policy 84-3 of the City of Durango, a copy of which has been furnished to the franchisee. Where poles, conduits or other wire-holding structures of any public utility are available for use by franchisee, the franchisee shall use such poles, conduits and structures if the permission and consent of such public utility can be obtained by franchisee.

(b) In cases of disturbance of any street, public way or paved area, franchisee shall, at its own cost and expense, and in a manner approved by the city, replace and restore such street, public way or paved area in as good a condition as existed before the work involving such disturbance was commenced, such reasonable determination to be made by the city in accordance with applicable street standards as adopted by the city. All structures, lines, equipment and connections in, over, under and upon all streets shall be kept and maintained by the franchisee in a safe and suitable condition, and in good order and repair as determined by the city. In the event that the city incurs any out of pocket expenses paid to third-parties who are not employees of the city to obtain compliance with the franchisee's use of any street, easement, public way or paved area, franchisee shall reimburse the city for such expenses reasonably incurred.

(c) Upon receipt of reasonable advance notice, not to be less than five (5) business days, the franchisee shall, at its own expense, protect, support, temporarily disconnect, relocate in the public way, or remove from the public way, any property of the franchisee when lawfully required by the city by reason of traffic conditions, public safety, street abandonment, freeway and street construction, change or establishment of street grade, installation of sewers, drains, gas or water pipes, or any other type of structures or improvements by the city; provided, however, franchisee shall in all cases have the right of abandonment of its property. If public funds are separately available to any utility using such street, easement or right-of-way for the purpose of defraying the cost of such disconnection, relocation or removal, such funds shall also be made available to the franchisee.

(d) Any fixtures placed in any public way by franchisee shall be placed in such manner as not to interfere with the usual travel on such public way as determined by the city.

(f) Upon forty-eight (48) hours advance notice to the city, franchisee shall have the authority to trim trees that are overhanging streets and public ways and places of the franchise area, so as to prevent the branches of such trees from coming in contact with the wires and cables of franchisee. At the option of the city, such trimming may be done by the city or under the city's supervision and direction at the reasonable expense of the franchisee. Should the trimming of trees by franchisee result in the destruction of any otherwise healthy trees, franchisee shall be responsible for the reasonable cost of replacement or reasonable compensation to the owner thereof. All pruning, trimming or removal of trees shall be accomplished in accordance with the requirements of sections 26-56 through 26-62 of the Durango City Code.

(g) The city shall have the right to make additional use, for any public or municipal purpose, of any conduits controlled or maintained by or for franchisee in any street, provided such use by the city does not interfere with the present or future reasonable usage of such conduits by franchisee. In the event of such usage, the city shall indemnify and hold harmless the franchisee against and from any and all claims, demands, causes of action, costs or liabilities of every kind and nature whatsoever arising out of such use of the franchisee's conduits, inclusive of reasonable attorney's fees. The size of any conduit utilized by franchisee for extension of trunk lines or distribution cables shall be of sufficient size, as approved by the city, to allow use by other franchisees or the city. Franchisee shall also have the right to make additional use of conduits controlled or maintained exclusively by the city, and shall indemnify and hold harmless the city against and from any and all claims, demands, causes of action, costs or liabilities of every kind and nature whatsoever arising out of such use of the city's conduits, inclusive of reasonable attorney's fees.

(h) In those areas of the franchise area where all of the transmission or distribution facilities of respective public utilities providing telephone communications and electrical services are underground, franchisee shall likewise construct, operate and maintain all of its transmission and distribution facilities underground. In those areas of the franchise area where the transmission or distribution facilities of the respective public utilities providing telephone communications and electrical services are both aerial and underground, franchisee shall have no obligation to convert existing aerial transmission lines to underground installations, but shall be obligated to construct, operate and maintain any new transmission or distribution facilities underground, unless expressly waived by the city in writing. Nothing contained in this section shall require franchisee to construct, operate or maintain underground any ground-mounted appurtenances such as subscriber taps, line extenders, system passive devices (splitters, directional couplers), amplifiers, power supplies, pedestals or other related equipment.

In the event that, during the term of this franchise, all of the transmission or distribution facilities of the respective public utilities providing telephone communications and electrical service are converted to underground installation within all or a portion of the franchise area, franchisee shall be provided written notice from the city of such conversion and, subsequent thereto, shall be required to construct, operate and maintain all of its transmission and distribution facilities underground within the franchise area or such portion thereof as may be designated in the written notice from the city.

Sec. 9. Safety requirements.

(a) Franchisee shall at all times employ due care and shall install and maintain in use, commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries or nuisances to the public.

(b) Any damage caused to any private property, including trees and other landscaping, by the franchisee shall be repaired or restored fully by the franchisee in a timely manner.

(c) All structures and all lines, equipment, and connections or other property of the franchisee in, over, under and upon the streets, sidewalks, alleys and public ways or places of the franchise area, wherever situated or located, shall at all times be kept and maintained in a safe and suitable condition, and in good order and repair as reasonably determined by the city.

Sec. 10. System service and extension.

(a) Franchisee shall proceed with due diligence to extend its energized trunk and distribution cables capable of providing cable service to all households within the franchise area not presently served, if any.

(b) No person, firm or corporation in franchisee's service area shall be arbitrarily refused service. In recognition of the capital costs involved, where the density is less than eight (8) households per one thousand (1,000) feet of distribution cable length or where the service drop cable is in excess of one hundred fifty (150) feet, an installation surcharge shall be allowed.

(c) The cable system shall initially be capable of carrying no less than thirty-six (36) television channels. Franchisee covenants and agrees that the channel capacity of the cable system will be increased to at least fifty-four (54) television channels within three (3) years of the effective date of this franchise.

(d) Set-top converters to receive existing channel capacity or additional channel capacity shall be provided by franchisee to each subscriber. Franchisee may continue to collect a monthly rental charge for such converters.

(e) The system shall have a two-way capability.

Sec. 11. System design.

(a) The system provided by franchisee shall be a one-way addressable, two-way capable 450 MHz design providing a subscriber network. All cable installed under streets, sidewalks, driveways, bike paths and other paved areas and paved public rights-of-way after the effective date of this ordinance shall be buried in conduit.

(b) To minimize service outage, standby power supply shall be installed such that the system will be unaffected by power outages of less than four (4) hours duration. All amplifiers and power supplies shall be monitored by a preventive maintenance program.

(c) The franchisee shall furnish an emergency alert system for the purpose of permitting designated city officials to provide emergency information and warnings to cable subscribers. This system shall provide a full audio signal emergency alert override of all channels of the subscriber network. Access to the emergency alert control shall be capable of being made by telephone transmission from City Hall. An access code will be developed which will limit access to authorized individuals. In the event the emergency alert system is utilized by the city, the city shall indemnify and hold harmless the franchisee against and from any and all claims, demands, causes of action, costs or liabilities of every kind and nature whatsoever arising out of such usage by the city, inclusive of reasonable attorney's fees.

(d) Parental control devices shall be made available to all subscribers, upon request, for a one-time fee equal to franchisee's cost.

(e) Upon request of the city, personal identification numbers (PIN) or other acceptable security mechanism will be provided with regard to the pay per view service.

Sec. 12. Operational standards.

(a) In addition to the minimum requirements prescribed in this ordinance, franchisee shall operate and maintain its cable television system in full compliance with the operational and technical standards set forth by the Federal Communications Commission, as applicable, and such additional and further standards as may be prescribed in this franchise.

(b) Copies of all petitions, applications, reports and communications submitted by franchisee to the Federal Communications Commission or any state regulatory commission or agency having jurisdiction with respect to any matters affecting cable television operations authorized pursuant to this ordinance, shall be submitted to the City of Durango (Attention City Manager), 949 East 2nd Avenue, Durango, Colorado 81301, within thirty (30) days of its filing.

(c) The franchisee shall diligently apply for all necessary permits and authorizations required in the conduct of its business, and shall diligently pursue the acquisition thereof, including necessary authorization from the Federal Aviation Agency to construct such receiving antenna towers as may be required, and any necessary authorizations or waivers from the Federal Communications Commission. When any such permit, authorization, contract or waiver is obtained, a copy thereof shall be promptly filed by the franchisee with the city.

(d) Franchisee shall file with the city copies of all rules, regulations, terms and conditions which it has adopted for the conduct of its business in the City of Durango.

(e) The operations and facilities of franchisee shall be conducted and maintained in a manner which shall not interfere with the radio and television reception obtained through any method other than franchisee's facilities and will not in any manner interfere with the communications facilities owned and operated by the city.

(f) The city may waive its right to receipt of the filings provided for in this section upon written notification to the franchisee.

Sec. 13. Technological advances/state of the art.

(a) Franchisee shall upgrade its facilities, equipment and service so that its system is as advanced as the current state of technology will allow, if economically feasible. If franchisee believes that technological upgrades are not economically feasible, it shall notify the city manager of the potential upgrade and shall further advise the city of the reason or reasons why such an upgrade is, in the opinion of the franchisee, not economically feasible. The city may require further documentation and information from franchisee for purposes of determining the economic feasibility of such an upgrade.

(b) Franchisee's cable system shall, at all times, be no less advanced than any other system operated by franchisee in cities of comparable size to the City of Durango; provided, however, should an upgrade of the Durango cable system be required pursuant to the terms of this paragraph, franchisee shall have the right to meet, confer and negotiate with the city concerning the economic practicality of such an upgrade, giving due consideration to the remaining term of this franchise. Should the parties determine that an upgrade of the type required is not economically practical due to the remaining duration of this franchise, the city, in such event, shall either waive the necessity of the upgrade which otherwise would be required or, alternatively, shall negotiate an extension of this franchise with franchisee sufficient to enable franchisee to reasonably amortize the demonstrated cost of the upgrade. Any extension of this franchise negotiated pursuant to the terms of this section shall be subject to approval of the electorate, if required under applicable law. The city shall have the authority to order franchisee to comply with this section in case of specific violations, which the city may investigate upon complaint or upon its own motion. Failure or refusal of the franchisee to upgrade the cable system consistently with the requirements of this section shall constitute grounds for termination of this franchise as more specifically hereinafter set forth.

(c) Any grant of rights similar to those granted to franchisee herein, whether by franchise, permit or license, to any other cable television operator shall conform to the provisions of this franchise with respect to the rights, benefits and obligations of the franchisee. Failure of the city to include such provisions in other franchises or grants shall excuse franchisee from performance of such duties and obligations which are not contained in subsequent grants or franchises; provided, however, the city may grant waivers to said provisions for incidental use of the public rights-of-way.

Sec. 14. Free distribution services.

Franchisee shall install, operate, and maintain, free of charge, for reception of its basic and expanded basic television distribution services an outlet at each of the following at such time as the cable passes by the property:

(a) At each public, parochial, elementary and secondary school within the city;

(b) At Fort Lewis College and any other public or private accredited college within the city;

(c) At city Hall, the Durango Police Department and the Durango Fire Station, and any city-owned indoor recreational facilities located within the corporate limits of the City of Durango;

(d) At the Durango Public Library; and

(e) At the Fifty-Five Plus Center and any other publicly-funded senior citizen center within the City of Durango.