1o. MVEC Franchise Agreement A -N
CITY O
CHANHASSEN
`\ _ 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900
MEMORANDUM
TO: Mayor and City Council
FROM: Don Ashworth, City Manager Ilt{)iq-
DATE: August 14, 1989
SUBJ: Proposed Franchise Agreement, Minnesota Valley Electric
Cooperative y
Minnesota Valley Electric provided electrical service to resi-
dents of Chanhassen before they were residents of Chanhassen.
Given their grandfathered position, a franchise would technically
not be required. However, such does provide additional legal
protections to the company as well as to establish the rules
under which they can operate - an advantage to the City.
Accordingly, this office has been working with representatives of
Minnesota Valley for the past year in arriving at a proposed
I franchise. [Note: I have copies of over 50 franchises
throughout the metropolitan area which were used as a basis for
preparing the attached document. The existing franchise with NSP
is included in the Council' s ordinance book. Additionally, I
have sent the proposed franchise to officials of NSP as a gesture
and to gain feedback as to whether any provisions could be seen
as more lenient than exists under their franchise. All comments
received were favorable. ]
Approval of first reading of an ordinance establishing franchise
between the City of Chanhassen and Minnesota Valley Electric
Cooperative, as attached, is recommended.
Update (8-28-89) : First reading of the attached ordinance was
approved on August 14, 1989. Approval of second and final reading
is recommended.
DWA
ORDINANCE NO. ____
CITY OF CHANHASSEN, CARVER COUNTY,
MINNESOTA
AN ORDINANCE GRANTING TO MINNESOTA VALLEY ELECTRIC
COOPERATIVE, A MINNESOTA CORPORATION, ITS SUCCESSORS
AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR
AND MAINTAIN IN THE CITY OF CHANHASSEN, MINNESOTA,
AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES,
INCLUDING NECESSARY POLES, LINES FIXTURES AND
APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY
TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE
THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR
SUCH PURPOSE.
SECTION I. DEFINITIONS
1 . 1 "City" in this Ordinance, "City" means the City of
CHANHASSEN, County of CARVER, State of MINNESOTA.
1. 2 "City Utility System" means the facilities used for
providing sewer, water, or any other public utility service owned or
operated by City or agency thereof.
1. 3 "Company" means Minnesota Valley Electric Cooperative, a
Minnesota corporation, its successors and assigns.
1 . 4 "Notice" means a writing served by any party or parties on
any other party or parties. Notice to Company shall be mailed to the
General Manager thereof at 20425 JOHNSON MEMORIAL DRIVE, P.O. Box 125,
JORDAN, MINNESOTA 55352. Notice to City shall be mailed to the CITY I I
CLERK.
1. 5 "Public Way" means any street, alley, or other public
right-of-way within the City.
1. 6 "Public Ground" means land owned by the City for park, open
space or similar purpose, which is held for use in common by the
public.
1. 7 "Electric Facilities" means electric transmission and
distribution towers , poles, lines, guys, anchors, ducts, fixtures, 1
and necessary appurtenances owned or operated by the Company for the
purpose of providing electric energy for public use.
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SECTION 2. FRANCHISE
2. 1 Grant of Franchise. City hereby grants Company, for a
period of twenty years from - , 198_, the right to transmit and
' furnish electric energy for light, heat, power and other purposes for
public and private use within and through the limits of the City as
its boundaries now exist or as they may be extended in the future.
For these purposes, Company may construct, operate, repair and
maintain Electric Facilities in, on, over, under and across the
Public Ways and Public Grounds of City subject to the provisions of
this ordinance. Company may do all reasonable things necessary or
customary to accomplish these purposes, subject, however, to zoning
ordinances, other applicable ordinances, permit procedures, and to
the further provisions of this franchise.
2. 2 Effective Dater Written Acceptance. This franchise shall
be in force and effect from and after its passage and its acceptance
by the Company, and its publication as required by law. An
' acceptance by the Company must be filed with the City Clerk within 90
days after publication.
' 2. 3 Service Rates and Area. The company will provide
adequate, efficient, and reasonable electric service and at rates which
fairly reflect the costs of doing business on its utility system. The
area within the City in which the Company may provide electric service
currently is subject to the provisions of Minnesota Statutes, Section
216B. 40.
2.4 Publication Expense. The expense of publication of this
ordinance shall be paid by the Company.
' 2. 5 Default. If either party asserts that the other party is
in default in the performance of any obligation hereunder, the
complaining party shall notify the other party of the default and the
desired remedy. The notification shall be written. If the dispute
' is not resolved within 30 days of the written notice, either party
may commence an action in District Court to interpret and enforce
this franchise of for such other relief as may be permitted by law or
' equity for breach of contract, or either party may take any other
action permitted by law.
' SECTION 3. LOCATION: OTHER REGULATIONS
3. 1 Location of Facilities. Electric Facilities shag ue
located and constructed so as not to interfere with the safety and
convenience of ordinary travel along and over Public Ways and they
shall be located on Public Grounds as determined by the City. The
Company' s construction, reconstruction, operation, repair, maintenance
' and location of Electric Facilities shall be subject to other
reasonable regulations of the City.
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3. 2 Field Locations. The Company shall provide field locations
for any of its underground Electric Facilities without cost within a II reasonable period of time on request by the City. The period of time
will be considered reasonable if it compares favorably with the
average time required by the cities in the same county to locate II municipal underground facilities for the Company.
3. 3 Street Openings. The Company shall not open or disturb the
paved surface of any Public Way or Public Ground for any purpose
without first having obtained permission from the City, for which the
City may impose a reasonable fee. Permit conditions imposed on the
Company shall not be more burdensome than those imposed on other
utilities for similar facilities or work. The Company may, however,
open and disturb the paved surface of any Public Way or Public Ground
without permission from the City where an emergency exists requiring
the immediate repair of Electric Facilities. In such event the Company
shall notify the City by telephone to the office designated by the City
before opening or disturbing a paved surface of a Public Way or Public
Ground. Not later than the second working day thereafter, the Company II
shall obtain any required permits and pay any required fees.
3. 4 Restoration. After undertaking any work requiring the II
opening of any Public Way or Public Ground, the Company shall restore
the same, including paving and its foundation, to as good condition as
formerly existed, and shall maintain the same in good condition for two I
years thereafter. The work shall be completed as promptly as weather
permits, and if the Company shall not promptly perform and complete the
work, remove all dirt, rubbish, equipment and material, and put the
Public Way or Public Ground in the said condition, the City shall have,
after demand to the Company to cure and the passage of a reasonable
period of time following the demand, but not to exceed five days, the
right to make the restoration at the expense of the Company. The ,
Company shall pay to the City the cost of such work done for or
performed by the City, including its administrative expense and
overhead, plus ten percent additional as liquidated damages. This
remedy shall be in addition to any other remedy available to the City.
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3. 5 Shared Use of Poles. The Company shall make space available
on its poles or towers for City fire, water utility, police, cable
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television, or other City facilities whenever such use will not
interfere with the use of such poles or towers by the Company, by
another electric utility, by a telephone utility, or by any cable II television company or other form of communication company. In
addition, the City shall pay for any added cost incurred by the
Company because of such use by City.
SECTION 4. RELOCATIONS II
4. 1 Relocation of Electric Facilities in Public Ways. Except as II
provided in Section 4. 3, if the City determines to vacate for a City
improvement project, or to grade, regrade, or change the line of any
Public Way, or construct or reconstruct any City Utility System in any II Public Way, it may order the Company to relocate its Electric
Facilities located therein. The Company shall relocate its, Electric
Facilities at its own expense. The City shall give the Company
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reasonable notice of plans to vacate for a City improvement project , or
to grade, regrade, or change the line of any Public Way or to construct
or reconstruct any City Utility System. If a relocation is ordered
within five years of a prior relocation of the same Electrical
' Facilities, which was made at Company expense, the City shall reimburse
Company for non-betterment expenses on a time and material basis,
provided that if a subsequent relocation is required because of the
' extension of a City Utility System to a previously unserved area,
Company may be required to make the subsequent relocation at its
expense. Nothing in this Ordinance requires Company to relocate,
remove, replace or reconnect at its own expense its facilities where
such relocation, removal, replacement or reconstruction is solely for
the convenience of the City and is not reasonably necessary for the
construction or reconstruction of a Public Way or City Utility System
or other City improvement.
4. 2 Relocation of Electric Facilities in Public Ground. Except
' as may be provided in Section 4. 3, City may require the Company to
relocate or remove its Electric Facilities from Public Ground upon a
finding by City that the Electric Facilities have become or will become
a substantial impairment of the public use to which the Public Ground
' is or will be put. The relocation or removal shall be at the Company' s
expense. The provisions of 4. 2 apply only to Electric Facilities
constructed in reliance on a franchise and the Company does not waive
' its rights under an easement or prescriptive right.
4. 3 Projects with State or Federal Funding. Relocation, removal,
or rearrangement of any Company facilities made necessary because of
the extension into or through City of a federally-aided highway project
shall be governed by the provisions of Minnesota Statutes Section
161.46 as supplemented or amended. It is understood that the right
' herein granted to Company is a valuable right. City shall not order
Company to remove, or relocate its facilities when a Public Way is
vacated, improved or realigned because of a renewal or a redevelopment
' plan which is financially subsidized in whole or in part by the Federal
Government or any agency thereof, unless the reasonable non-betterment
costs of such relocation and the loss and expense resulting therefrom
are first paid to Company, but the City need not pay those portions of
' such for which reimbursement to it is not available. "Financially
subsidized" does not include the sale of tax exempt bonds.
' 4.4 Liability. Nothing in the Ordinance relieves any person from
liability arising out of the failure to exercise reasonable care to
avoid damaging Electric Facilities while performing any activity.
' SECTION 5 TREE TRIMMING
The Company may trim all trees and shrubs in the Public Ways and
' Public Grounds of City interfering with the proper construction,
operation, repair and maintenance of any Electric Facilities installed
hereunder, provided that the Company shall save the City harmless from
' any liability arising therefrom, and subject to permit or other
reasonable regulation by the City.
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SECTION 6. INDEMNIFICATION
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6. 1 The Company shall indemnify, keep and hold the City free and
harmless from any and all liability on account of injury to persons or
damage to property occasioned by the construction, maintenance, repair,
inspection, the issuance of permits, or the operation of the Electric
Facilities located in the City. The City, shall not be indemnified
for losses or claims occasioned through its own negligence except for
losses or claims arising out of or alleging the City' s negligence as to
the issuance of permits for, or inspection of, the Company' s plans or
work. The City shall not be indemnified if the injury or damage I
results from the performance in a proper manner of acts reasonably
deemed hazardous by Company, and such performance is nevertheless
ordered or directed by City after notice of Company' s determination. II 6. 2 In the event a suit is brought against the City under
circumstances where this agreement to indemnify applies, the Company at
its sole cost and expense shall defend the City in such suit if written II
notice thereof is promptly given to the Company within a period wherein
the Company is not prejudiced by lack of such notice. If the Company
is required to indemnify and defend, it will thereafter have control of '
such litigation, but the Company may not settle such litigation without
the consent of the City, which consent shall not be unreasonably
withheld. This section is not, as to third parties, a waiver of any
defense or immunity otherwise available to the City; and the Company, I
in defending any action on behalf of the City shall be entitled to
assert in any action every defense or immunity that the City could
assert in its own behalf.
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SECTION 7. VACATION OF PUBLIC WAYS
The City shall give the Company at least two weeks' prior written I
notice of a proposed vacation of a Public Way. Except where required
for a City street or other improvement project, the vacation of any
Public Way, after the installation of Electric Facilities, shall not II
operate to deprive Company of its rights to operate and maintain such
Electrical Facilities, until the reasonable cost of relocating the same
and the loss and expense resulting from such relocation are first paid
to Company. In no case, however, shall City be liable to the Company
for failure to specifically preserve a right-of-way, under Minnesota
Statutes, Section 160. 29. I
SECTION 8. CHANGE IN FORM OF GOVERNMENT
Any change in the form of government of the City shall not affect
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the validity of this Ordinance. Any governmental unit succeeding the
City shall , without the consent of the Company, succeed to all of the
rights and obligations of the City provided in this Ordinance.
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SECTION 9. FRANCHISE FEE
' 9. 1 Separate Ordinance. During the term of the franchise hereby
granted, and in lieu of any permit or other fees being imposed on the
Company, the City may impose on the Company a franchise fee of not more
' than five percent of the Company' s gross revenues as hereinafter
defined. The franchise fee shall be imposed by a separate ordinance
duly adopted by the City Council, which ordinance shall not be adopted
until at least 60 days after written notice enclosing such proposed
' ordinance has been served upon the Company be certified mail. The fee
shall not become effective until at least 60 days after written notice
enclosing such adopted ordinance has been served upon the Company by
' certified mail. Section 2.5 shall constitute the sole remedy for
solving disputes between the Company and the City in regard to the
interpretation of, or enforcement of, the separate ordinance. No
' action by the City to implement a separate ordinance will commence
until this ordinance is effective. No pre-existing ordinance imposing
a fee shall be effective against the Company unless it is specifically
amended after the effective date of this ordinance following the
' procedures of this Section 9 for the adoption of a new separate
ordinance. A separate ordinance which does not impose a uniform
franchise fee on all revenues within the definition of gross revenues
' shall not be effective against the Company.
9. 2 Terms Defined. The term "gross revenues" means all sums,
excluding any surcharge or similar addition to the Company' s charges to
customers for the purpose of reimbursing the Company for the cost
resulting from the franchise fee, received by the Company from the sale
of electricity to its retail customers within the corporate limits of
the City.
9. 3 Collection of the Fee. The franchise fee shall be payable
not less often than quarterly, and shall be based on the gross revenues
of the Company during complete billing months during the period
for which payment is to be made. The payment shall be due the last
business day of the month following the period for which the payment
is made. The percent fee may be changed by ordinance from time to
time; however, each change shall meet the same notice requirements
and the percentage may not be changed more often than annually. Such
fee shall not exceed any amount which the company may legally charge
to its customers prior to payment to the City by imposing a surcharge
equivalent to such fee in its rates for electric service. The
Company may pay the City the fee based upon the surcharge billed
' subject to subsequent reductions to account for uncollectibles or
customer refunds. The Company agrees to make its gross revenues
records available for inspection by the City at reasonable times.
' 9. 4 Conditions on the Fee. The separate ordinance imposing the
fee shall not be effective against the Company unless it lawfully
imposes and the City quarterly or more often collects a fee or tax of
the same or greater percentage on the receipts from sales of energy
within the City by any other energy supplier , provided that,, as to
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such a supplier, the City has the authority to require a franchise
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fee or to impose a tax. The franchise fee or tax shall be applicable
to energy sales for any energy use related to heating, cooling, or
lighting, as well as to the supply of energy needed to run machinery
and appliances on premises located within or adjacent to the City, but
shall not apply to energy sales for the purpose of providing fuel for
vehicles.
SECTION 10. SEVERABILITY s '
If any portion of this franchise is found to be invalid for any
reason whatsoever, the validity of the remainder shall not be
affected.
SECTION 11. AMENDMENT
This ordinance may be amended at any time by the City passing a
subsequent ordinance declaring the provisions of the amendment, which
amendatory ordinance shall become effective upon the filing of the
Company' s written consent thereto with the City Clerk within 90 days
after the effective date of the amendatory ordinance.
SECTION 12. PREVIOUS FRANCHISES SUPERSEDED '
This franchise supersedes any previous electric franchise
granted to the Company or its predecessor.
Passed and approved
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Mayor of the City of CHANHASSEN
MINNESOTA
ATTEST: '
Clerk of the City of
CHANHASSEN, MINNESOTA
7
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I OF THE CITY COUNCIL
OF THE
CITY OF CHANHASSEN, CARVER COUNTY, MINNESOTA
I , 19__
A meeting of the City Council of the City of CHANHASSEN,
innesota, duly called, convened, and held in accordance with law, was called
o order by Mayor on the day of , 198 , at
o' clock m. at the Council Chamber of said City.
IThe following members, constituting a legal quorum were present:
ICouncilman introduced a certain Ordinance No.
entitled:
IAN ORDINANCE GRANTING TO MINNESOTA VALLEY ELECTRIC,
A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS,
PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN
I IN THE CITY OF CHANHASSEN, MINNESOTA, AN ELECTRIC DISTRIBUTION
SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES,
LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF
I ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND
OTHERS , AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS
OF THE CITY FOR SUCH PURPOSES.
Ind on motion made, seconded, and duly adopted, the above-entitled Ordinance
as read.
IThereafter a motion was made by Councilman and seconded by
ouncilman that the above-entitled Ordinance be adopted as read
and in its entirety.
IOn roll call the vote was as follows:
AYES:
I
NAYES:
The Mayor then declared said motion duly carried and the above-entitled
rdinance duly passed and adopted, and ordered the City Clerk to publish the
ame in accordance with the law in such case made and provided.
I DO HEREBY CERTIFY that I am City Clerk of the City of
CHANHASSEN, CARVER County, Minnesota and that I am custodian of its
Iecords, that the above is a true and correct copy of a part of the
nutes of the
meeting of the City Council of said City held on , 198 .
I
City Clerk
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Minnesota Valley Electric Cooperative
E tf 20425 Johnson Memorial Drive, P.O. Box 125
C
s Jordan, MN 55352 (612)492-2313
1�e
BOARD OF DIRECTORS
July 24, 1989
Thomas Graham
President
Henderson Mr. Don Ashworth '
Melvin Ische Chanhassen City Hall
Vice President 690 Coulter Drive, Box 147
Norwood Chanhassen, MN 55317 '
Edward Halloran Dear Don,
Secretary/Treasurer
Le Center We have reviewed your letter and the changes proposed by
your attorney, Roger Knutson and find them acceptable.
Myron Boegeman
Shakopee Enclosed is a revised franchise agreement incorporating
John Wagner the new language and making the necessary deletions.
New Prague
Thank you for taking care of this.
Rodney Marek
Montgomery t Sincerely,
MINNESOTA VALLEY ELECTRIC COOPERATIVE
George Stauff " \
Kilkenny
,art /
•
John Carlson Roger W. Geckler
Henderson General Manager t
Donald Frankhauser
Savage enclosures
GENERAL MANAGER.
Roger Geckler '
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JUL 24. 1989
CITY.OF CHANHASSEN"
t , .
I LAW OFFICES
GRANNIS, GRANNIS, FARRELL & KNUTSON
DAVID L. GRANNIS- 1874-1961 -PROFESSIONAL ASSOCIATION TELECOPIER.
I DAVID L. GRANNIS,JR. - 1910-1980 POST OFFICE Box 57 (612)455-2359
VANCE B. GRANNIS 403 NOR WEST BANK BUILDING ELLIOTT B.KNETSCH
MICHAEL J. MAYER
VANCE B. GRANNIS,JR. 161 NORTH CONCORD EXCHANGE TIMOTHY J.BERG
I PATRICK A.FARRELL
DAVID L.GRANNIS,III SOUTH ST PAUL, MINNESOTA 55a75
ROGER N. KNUTSON TELEPHONE(612)455-1661
DAVID L. HARMEYER
1 November 1 1 , 1988
I Mr. Don Ashworth
Chanhassen City Hall
690 Coulter Drive, Box 147
IChanhassen, Minnesota 55317
RE: Franchise Agreement -
IMinnesota Valley Electric Cooperative
Dear Don:
I have reviewed the Franchise Agreement with Minnesota
Valley Electric Cooperative and approve it as to form with the
following suggested changes:
IParagraph 2.2 , Page 2 - delete (and the City Charter) .
I Paragraph 3 .2, Page 3 - the first sentence should read:
The company shall provide field locations for any of its
underground Electric Facilities without cost within a
reasonable period of time on request by the City.
IParagraph 3 . 5, Page 3 - the first sentence should read:
The Company shall make space available on its poles or
I f towers for City fire, water utility, police, cable
television, or other City facilities .
Paragraph 4.3 , Page 4 - The following language should be
I added at the end of the paragraph: "Financially subsidized"
does not include the sale of tax exempt bonds.
IWry truly . rs,
I GRAN IS, GR IS, FARR LL
•-i.S N, p.Aim_
BY: lV'
I so•- N. Knutson
RNK: srn
Nov 1 1988
I CI TI ,.r
La JAINhcASSEN