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Adopting the geothermal energy franchise by The Heights Community Energy, Inc.
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Sec. 1. Grant of Franchise.
The Heights Community Energy, Inc., a nonprofit Minnesota corporation, through its board of directors, hereinafter designated as “company,” will own and operate the geothermal system under the direction of District Energy St. Paul, a long-standing nonprofit utility partner to the City of Saint Paul, with participation from: 1) the Saint Paul Port Authority, owner and master developer of The Heights; 2) District Energy St. Paul, a long-standing nonprofit utility partner to the City of Saint Paul; 3) the City of Saint Paul; and 4) system customers or as otherwise provided in the company’s organizational documents. The company is hereby granted a nonexclusive franchise to use the streets and public property to construct, maintain and operate a district geothermal energy system at The Heights development on the East Side of the City of Saint Paul for a term extending from the Effective Date of this ordinance as provided in Section 29 to September 30, 2045. City expressly reserves the right to grant licenses, permits, franchises, privileges, or other rights, if necessary, under applicable law, to any other individual, corporation, partnership, limited liability company, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other entity of any nature whatsoever to use all streets and public property for similar or different purposes allowed company under this franchise. Said franchise may not be sold, transferred, assigned, pledged, mortgaged or in any way disposed of or encumbered without the consent of the city by ordinance, any of the foregoing to be treated as a modification of this franchise.
Sec. 2. Use of Right-of-Way.
This franchise does not grant or convey any property interest. The franchise granted herein shall extend to the company’s use of all streets and public property now being used by the company in connection with such service and of such other streets and public property as may from time to time be designated by the city council. Such franchise to use the streets and public property located in the city shall include such use for the purpose of constructing, maintaining, and operating a system of pipes, subways, and manholes with all other necessary appurtenances for carrying on the business of conveying hot and chilled water for the purpose of providing heating, cooling, domestic hot water, and related energy services to consumers. This franchise does not authorize company to use any public property or city property other than as agreed herein. Company’s use of any other public property or city property, including poles and conduits, will be governed under a separate agreement regarding that use. After undertaking any work requiring the opening of any right-of-way, the company shall restore the right-of-way in accordance with Minnesota Rules, part 7819.1100 and the city code. The company must promptly provide complete and accurate mapping information for any of its facilities in accordance with the requirements of Minnesota Rules parts 7819.4000 and 7819.4100.
Sec. 3. Location of Facilities.
This franchise is subject and subordinate to city’s prior and continuing right to use all streets and public property, including, but not limited to, constructing, installing, operating, maintaining, repairing, or removing sewers, water pipes, storm drains, gas pipes, utility poles, overhead and underground electric lines and related facilities, and other public utility and municipal uses. City’s grant of authority under this franchise is subject to all valid pre-existing easements, restrictions, conditions, covenants, encumbrances, claims of title or other property interests that may affect the streets and public property. Company will obtain at its own cost and expense any permission or rights as may be necessary to accommodate such pre-existing property interests. In locating its energy system facilities, the company shall in no way unreasonably interfere with the safety and convenience of ordinary travel along and over said streets and public property nor interfere with other uses to which such places may be put by the city. In the event it shall become necessary during the term of this franchise to remove or relocate the physical property of the company located within or upon any of the streets or public property in the city, because of such interference or use by the city, or as a result of any public improvement undertaken by the city, the company shall, when so advised by the council, remove and relocate said facilities without cost to the city, and shall place the streets or public property in the same condition as they were prior to said removal or relocation. All restorations within the right-of-way shall conform to the “City of Saint Paul, Minnesota, Department of Public Works, Standard Specifications for Street Openings,” as amended and Minnesota Rules, part 7819.3100. Any relocation or removal of the company’s facilities made necessary because of the extension through or into the city of a federally aided trunk highway, included within the National System of Interstate Highways, shall be governed by the provisions of the Minnesota Statutes 2003, Section 161.46; provided, that the city shall not bear any cost or expense as a result of the application by the company and for assistance under said section, and the streets and public property shall be restored as required even though federal or state assistance is not available for any reason under said section.
Sec. 4. Installation, Maintenance and Operation, Contractors Subject to Franchise.
The company in the installation, maintenance and operation of its facilities shall be subject to such reasonable regulations as may be provided by the city council, and no pipe or pipes or other appurtenances shall hereafter be installed or laid by the company upon the streets and public property of the city, except upon application to the department of public works or other persons designated by the city council, and written permission granted by said department or person. Company will obtain city’s approval of required individual encroachment, construction, and other necessary permits as required by the City Code before placing any new facilities in the streets and public property. The company may be required by the city to also post a construction performance bond consistent with the provisions of Minnesota Rules, parts 7819.3000 and 7819.0100, subpart 6. Company will provide to city any information lawfully required by city. Company will pay all lawful processing, field marking, engineering, inspection fees and any other fees required by applicable law and the City Code before city issues individual permits. Company will exercise reasonable care when performing work and will use commonly accepted practices and equipment to minimize the risks of personal injury, property damage, soil erosion, and pollution of surface or groundwater. The company may enter into contracts and agreements to provide for the installation, construction, reconstruction, maintenance, and operation of the energy systems. Existing and future contracts for the operation and management of the utility (1) shall be subject to the terms and conditions of this franchise; (2) shall be for a term not to exceed ten (10) years, and shall be subject to revision or renewal at the expiration of the term, with a copy of such revision or renewal to be provided to the city within thirty (30) days; (3) shall require any contractor to comply with all terms and conditions of the franchise, including without limitation reporting requirements and rate regulation, as if said contractor were the company; and (4) shall not relieve or be construed to relieve the company from its obligations under this franchise. In all cases contractors and subcontractors shall at all times comply with the terms of this franchise and the City Code.
Sec. 5. Franchise Fee.
5.1 Pursuant to Section 16.06 of the City Charter, the company shall be required to pay into the treasury of the city, a franchise fee of five (5.0) percent based on the energy system’s gross earnings as defined in Section 5.2 herein. The franchise fee payment shall be paid in monthly installments to be received on or before the twenty-fifth day of each month. The first franchise payment shall be due twenty-four months following the month when company first receives revenue from the geothermal energy system and payments shall continue each month thereafter through the term of this franchise and any such renewal term or extension of this franchise. The payment will be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the city to determine the accuracy of the payment. City may examine the business records of company during reasonable times and following no less than thirty (30) days’ prior written notice, to the extent reasonably necessary to ensure compliance with this Section 5. Company will keep all business records reflecting its franchise fee for at least six (6) years. City may, in the event of a dispute concerning compensation under this Section 5, bring an action in a court of competent jurisdiction. Company and city acknowledge and agree that the franchise fee provides fair and reasonable compensation for company’s use and occupancy all streets and public property.
5.2 The amount of the franchise fee shall be allowed as an operating expense to the company attributable solely to the company’s operations within the city, and in calculating such amount, “gross earnings” shall be held to mean and include all sums receivable by the company from the sale of hot and chilled water distributed and used within the city limits of the city. In no event shall the company be required to pay a franchise fee in excess of the amount which it can legally collect from its customers in the city by means of a surcharge on its rate schedules for the purpose of collecting the franchise fee. The term “sale of hot and chilled water” includes the heating or cooling therefrom.
Sec. 6. Rates and Regulation.
6.1 All rates made, demanded, or received by the company shall be just and reasonable. Rates shall not be unreasonably preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable and consistent in application to a class of consumers. Rates shall generate sufficient revenue to allow the company to recover its reasonable operating costs and expenses; to provide for the timely and orderly payment of costs and expenses; to provide for the timely and orderly retirement of debt; and to provide for improvements, enlargements, and extensions necessary to adequately service the territory of the city authorized herein or later designated by the city pursuant to Section 2.
6.2 The rates contained in Schedule A, incorporated herein by reference, shall remain, and continue in force until amended or changed as provided herein.
6.3 The company shall not directly or indirectly charge, demand, collect or receive from any consumer or person in greater or less compensation for any service rendered or to be rendered by it than that prescribed in Schedule A; nor shall any person knowingly receive or accept any service from the company for compensation greater or less than that prescribed in Schedule A. The company shall not, as to rates or service, make or grant any unreasonable preference or advantage to any person or subject any person to any unreasonable prejudice or disadvantage.
6.4 The company shall keep and render its books, accounts, papers, and records accurately and faithfully in the manner and form prescribed by the city and shall comply with all directions of the city relating to these books, accounts, papers, and records, including furnishing of such information or compilations and permitting an audit of the books, accounts, papers and records, as may be requested by the city.
6.5 The company may, with the approval and concurrence of its governing board and after sixty (60) days’ notice to the city, file in the office of the city clerk a new or amended Schedule A, containing new or amended rates, rules or regulations. Such notice shall include statements or facts, substantiating documents and exhibits supporting the changes requested, and further shall state the changes proposed to be made in the rates then in force, and the time when the changes will go into effect. Such new or amended rates shall be effective and may be charged on the tenth day (or such later date that the company shall designate on its filing) after the filing of the new or amended Schedule A in the office of the city clerk, and shall continue in effect for a period not to exceed four (4) years until approved or denied by city council resolution, or until deemed approved, pursuant to the terms of this ordinance and the Charter, which Charter requires a public hearing after proper notice.
6.6 The city shall be required to take into account the operation of the terms and conditions of the customers’ Thermal Energy Service Agreement, which is the uniform contract entered into by the company and its customers providing for a detailed method of charges for capacity and commodity related costs. The customers’ Thermal Energy Service Agreement shall be filed in the office of the city clerk at the same time as the written acceptance required by Section 14 herein. Amendments to the customers’ Thermal Energy Service Agreement shall be filed with the city clerk and office of financial services at least thirty (30) days prior to the Effective Date of such an amendment or amendments; provided, however, that no amendment to parts 4, 5 and 10 of said agreement, pertaining to thermal energy capacity and rate changes, shall be effective unless and until approved by the city council by resolution. Any amendment to other sections of the customers’ Thermal Energy Agreement shall be effective sixty (60) days after filing in the absence of a resolution by the city council disapproving such amendment.
6.7 At the request of the company and, in order to assist in determining whether the proposed changes in Schedule A shall be approved or denied, the city may require a public hearing before a hearing examiner who shall be selected by mutual agreement of city and the company within ten (10) days of the company’s request. The hearing examiner shall hold a hearing as a contested case and make recommendations to the city. Upon receipt of such recommendations, the city shall by resolution approve or deny the proposed changes in Schedule A. If no such action is taken by the city within thirty (30) days after receipt of the hearing examiner’s recommendations, such proposed changes are deemed approved.
6.8 Proposed changes to Schedule A can only be approved, approved in part if severable, or denied; and cannot be modified or amended. The city may notwithstanding require the company to refund or credit to its customers any increase in rates which are in excess of the lawful and reasonable rates as finally determined.
Sec. 7. Appointment of City Staff.
For the purpose of assisting the council in the regulation of the activities and rates of the company as provided in this franchise, the office of financial services shall provide sufficient staff resources for the regulatory effort and the office of the city attorney shall designate an individual on its staff to serve to perform the duties that such regulation necessitates.
Sec. 8. Company to Pay Regulation Costs.
8.1 Commencing on July 1, 2028, the company shall pay the city five thousand dollars ($5,000.00) per year throughout the remaining franchise term. This fee shall be payable annually on July 1 and shall be used solely to pay the cost of regulation, which is not limited to, but may include, that part of the salary and expenses of the individual appointed by the financial services director and the city attorney, their assistant or assistants, clerical help and office expenses, outside accountants, attorneys, advisors and consultants’ fees reasonably related to the regulation of the company, its rate schedules and other matters and operations under this franchise. The amount of such payment or payments shall be allowed as a budgeted operating expense of the company. Such sum shall be adjusted each year by a dollar amount expressed in percentages equal to the percentage increase or decrease in the Consumer Price Index for All Urban Consumers in the Minneapolis/St. Paul area (or its successor index) for the latest twelve-month period, the adjustments to be cumulative and based on the amount of the latest adjustment plus the previous year’s payment.
8.2 The obligations set forth below in Section 8.1 above shall be deferred until July 1, 2030. On or before July 1, 2030, Company shall remit to the city a total payment of $15,000 plus interest calculated annually by the Consumer Price Index for All Urban Consumers in the Minneapolis/St. Paul area (or its successor index) for the applicable 12-month period (CPI).
• July 1, 2027 - July 1, 2028 $5,000 (plus CPI)
• July 1, 2028 - July 1, 2029 $5,000 (plus CPI)
• July 1, 2029 - July 1, 2030 $5,000 (plus CPI)
Effective July 1, 2031 and for the remainder of the term of the franchise, as may be extended or renewed, the company shall remit annual payments to the city of $5,000. The city grants this initial deferral through July 1, 2030 to the company due to company’s proposed geothermal energy system which will have a significantly lower carbon footprint compared to fossil fuels, produce less carbon dioxide when generating electricity, reduce carbon emissions, and further the city’s objective to achieve a net zero-carbon community.
Sec. 9. Reports to be Filed.
9.1 In additional to the monthly report required by Section 5.1 herein, on or before December 31st of each fiscal year after the commencement of commercial operations, the company shall file with the director of the office of financial services for the city, a report containing such information as may be directed by the director including, but not limited to, the number of customers, sales and revenues by classes of service for the preceding year based upon its utility operations within the city, and energy usage, a comparison of actual and projected revenues. Such information shall also be provided by the company at any time during a given year, upon 30 days advance written notice by the City.
9.2 The director or his or her designee shall have the right, at all reasonable times and upon reasonable notice, to examine the books of account, records, vouchers, disbursements, rates, revenues, contracts, purchases, sale, and other transactions bearing on and relevant to the rates the company charges and the service it provides to its customers in the city.
Sec. 10. Costs; Publication; Adoption of Ordinance.
10.1 Company shall reimburse the city for all fees and expenses incurred by the city including but not limited to costs for outside legal counsel to grant a franchise pursuant to this ordinance. Such payment shall be made to the city within thirty (30) days after the date a bill of costs is sent to the company.
10.2 Before this ordinance shall be finally adopted by the council, a public hearing shall be held upon ten (10) days’ published notice in the official newspaper and after said hearing the council may pass this ordinance, revise, or amend the same. The company shall bear the costs of publication of this ordinance and shall make a sufficient deposit with the city clerk to guarantee publication before the ordinance is passed.
Sec. 11. Indemnification.
11.1 Company shall, at its sole cost and expense, fully indemnify, defend, and hold harmless the City, its elected officials, officers, boards (including the Board of Water Commissioners), commissions and employees against any and all claims, suits, actions, liability, and judgments for damages (including, but not limited to, reasonable expenses for outside legal fees and disbursements and liabilities assumed by the City in connection therewith) arising from or in connection with any of the following:
11.1.1 any breach or contravention of any law by company or any other third party acting on behalf of company;
11.1.2 company has breached company’s obligations, representations or warranties under this Franchise;
11.1.3 death or personal injury caused by a wrongful, willful or negligent act or omission of company or any other third party acting on behalf of company;
11.1.4 loss of or damage to real or tangible personal property caused by the negligence or willful misconduct of company or any other third party acting on behalf of company;
11.1.5 any liability assessment, including penalties and interest, imposed against city by any local, state, federal or foreign taxing authority, arising from or relating to or any other third party acting on behalf of company’s failure to properly pay any taxes that are the responsibility of company or any other third party acting on behalf of company under this Agreement; or
11.1.6 any claim or action by, on behalf of, or related to, any company employees, including claims arising under the occupational health and safety, worker’s compensation, ERISA, or other applicable federal, state, or local laws or regulations, the events leading to which are not caused by the acts or omissions of city.
11.2 In the event that the City awards any additional geothermal franchise in any future franchise process to a firm other than Company, then Company agrees that it will not bring, nor cause to be brought, any action, suit or other proceeding claiming damages, or seeking any other relief against City, its officials, officers, boards (including the Board of Water Commissioners), commissions, employees or agents, for any award of a franchise made in conformity with applicable state and federal law.
11.3 The cost and expense covered by the indemnities shall include, but not be limited to, fees for outside attorneys and special consultants.
11.4 The City shall give Company reasonable notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the provisions of this section. The Company shall cooperate with the City in the defense of any such action, suit, or other proceeding at the request of the City; however, in the absence of such request, nothing herein shall be deemed to prevent the Company from cooperating with the City and participating in the defense of any litigation by its own counsel at the Company's cost and expense.
11.5 It is the purpose of this section to provide maximum indemnification to the City under the terms set out herein and, in the event of a dispute as to this section, it shall be construed to the greatest extent permitted by law to provide for the indemnification of the City by Company.
11.6 To the extent permitted by law, Company shall have no monetary recourse whatsoever against City for any loss, costs, expenses, or damages arising out of any provision or requirement of this franchise, because of the enforcement of this franchise, or any action taken pursuant thereto, including damages that may be caused by movement or removal of the geothermal system during emergencies or in the course of any other activity of the City in the public streets or on public property, except in cases where the damage is the result of the City's gross negligence or willful misconduct. In no event shall the City be liable to the Company for any losses resulting from the interruption of its business, or for any other consequential damages, punitive damages, or exemplary damages. The rights of City under this Section are in addition to, and shall not be read to limit, any immunities the City may have under federal or state law or other provisions of this franchise.
Sec. 12. Insurance.
12.1 Company and its Contractors. Company and its contractors must carry insurance of the kind and in the amounts shown below for the life of the Agreement. Certificates for General Liability Insurance must state that the City of Saint Paul, its officials, employees, agents, and representatives are Additional Insureds. Company and its contractors must submit the corresponding “additional insured” endorsement outlining policy coverage for the City. The policy must include an “all services, products, or completed operation endorsement as a sublimit to the General Liability Policy. Errors and omissions coverage must be included if the Company or its contractors will be providing services for the City as a sublimit of the General Liability policy. Agent must state on the certificate if company carries errors and omissions coverage.
12.2 Subcontractors and/or Independent Companies. If the City gives written approval for the Company or its contractors to utilize subcontractors or other independent contractors to fulfill the terms and conditions of this Agreement, each subcontractor or independent contractor is required to have and secure for the duration of this Agreement and any extension periods (or the period of time during which said contractor is working on this Agreement) to have and maintain their own general liability, auto liability and workers compensation insurances that provide coverage for their own employees. If requested by the City, subcontractors and independent contractors must certify that they are not entitled to receive employee benefits of any type because their contractual relationship with the City is of that of a subcontractor or independent contractor, not a City employee.
12.3 Insurance Limits. The Company shall maintain, and by its acceptance of the franchise specifically agrees that it will maintain throughout the term of the franchise, liability insurance insuring the City and the Company and its contractors in the minimum amount of the liability limits imposed on the City under Minnesota Statute Chapter 466.04 or as amended, or the following, whichever is higher:
12.3.1 General or Business Liability Insurance
$1,500,000 per occurrence
$2,000,000 aggregate per project
$2,000,000 products/completed operations total limit
$1,500,000 personal injury and advertising
Errors and Omissions
$1,000,000 per occurrence
$1,000,000 aggregate
12.3.2 Automobile Insurance.
Commercial Vehicles. When commercial vehicles will be used in connection with the Agreement, these minimum coverage amounts are required:
Bodily Injury:
$750,000 per person
$1,000,000 per accident
Property Damage:
Not less than $50,000 per accident
Coverage must include: hired, non-owned and owned auto
Personal Vehicles. When personal vehicles are used in connection with the Agreement, the City is not required to be named as Additional Insureds, but proof of insurance is required prior to commencement of activities. Company must provide the City with Endorsements from insurance company.
Bodily Injury
$30,000 per person
$60,000 per accident
Property Damage
$20,000 per accident
Rental Vehicles. When rental vehicles are used in connection with the Agreement, the Company or its contractors must either purchase insurance from the rental agency or provide the City with proof of insurance as stated above.
12.3.3 Worker’s Compensation and Employer’s Liability. Worker’s Compensation coverage is required per Minnesota Statutes. Employer’s Liability must have a minimum of:
$500,000 per accident
$500,000 per employee;
$500,000 per disease policy limit.
Companies with 10 or fewer employees. Companies with 10 or fewer employees who do not have Worker's Compensation coverage are required to provide the City with a completed “Certificate of Compliance” (State of Minnesota form MN LIC 04) verifying their number of employees and the reason for their exemption.
12.3.4 Professional Services Coverage. Professional Liability Insurance is required when the Agreement is for service for which professional liability insurance is available for purchase. Professional Liability must have minimum liability limits of:
$1,000,000 per occurrence
$1,000,000 aggregate
12.3.5 Work Scope Specific Insurance. If required by the type of services being provided, the following minimum insurance limits apply for: Pollution Liability or Hazardous Waste, Builder’s Risk, or other specialty insurance:
Pollution Liability / Hazardous Waste
$1,000,000 per occurrence
$1,000,000 aggregate
Builder’s Risk Insurance:
Required for the cost of the project.
12.4 General Insurance Requirements
12.4.1 All policies must be written on an occurrence basis or as acceptable to the City of Saint Paul. Certificates of insurance must indicate that the policy is issued on an occurrence basis.
12.4.2 The Company may not commence any work until the Certificate(s) of Insurance include all required insurance coverage for the project is approved, and the Project manager has issued a notice to proceed. Contract must carry valid insurance for the duration of the original Agreement and any extension periods.
12.4.3 The City reserves the right to review Company's insurance policies at any time, with reasonable notice provided, to verify that City requirements have been met.
12.4.4 Nothing precludes the City from requiring Company to purchase and provide evidence of additional insurance if the scope of services changes, if the amount of the Agreement is significantly increased, or if the exposure to the City or its citizens is deemed to have increased.
12.4.5 Satisfaction of policy limits required above for General Liability and Automobile Liability Insurance, may be met with the purchase of an umbrella or excess policy. Any excess or umbrella policy must be written on an occurrence basis, and if such policy is not written by the same insurance carrier, the proof of underlying policies (endorsement) will be provided with any certificate of insurance.
Sec. 13. Severability Clause.
Every section, provision or part of this ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision or part.
Sec. 14. Police Power Reserved.
The company shall have the right to promulgate, from time to time, such rules, regulations, terms, and conditions governing the conduct of its business, not in conflict with this ordinance, as shall be reasonably necessary to enable the company to exercise its rights and perform its obligations under this ordinance, and to assure safe, adequate and continuous service to its customers. Nothing herein shall be construed as a limitation upon, or as a bar to the future exercise of, proper and lawful action in the exercise of the city’s police or any other legitimate municipal legislative or administrative powers.
Sec. 15. Passage; Effect of Ordinance.
The company shall, within thirty (30) days after the passage, approval and publication of this ordinance, file with the city clerk of said city its written acceptance thereof in form to be approved by the city attorney, and therein shall agree to abide by, keep and perform all of the terms, limitations, conditions and provisions of this ordinance.
Sec. 16. Franchise not Exclusive.
This franchise herein granted shall not be exclusive nor irrevocable but may be terminated and forfeited after notice and hearing for any breach or failure by company to comply with the terms, limitations or conditions hereof.
Sec. 17. Company Charges to Customer.
17.1 Types of Charges. Company charges shall be established in Schedule A and adopted by the city in the form of a resolution, which shall be subject to a public hearing before the city council. Charges shall be limited to the following:
17.1.1 Fixed customer charge: That part of the charge that is a flat fee charged to customers for access to The Heights Community Energy’s service.
17.1.2 Capacity charge: That part of the rate schedule to be paid by customers which relates to the maximum amount of energy in BTUs added to or removed during a one-hour period from the Company’s system in the form of hot and chilled water. The capacity charge is equal to the following expenses and costs divided by the projected energy production, as measured in BTUs produced hourly to meet the obligations of the company to its customers under the Hot and Chilled Water Service Agreements (i.e. the total contract heating capacity and contract cooling capacity or capacity revenue). The capacity charge shall exclude energy, chemicals, and water treatment costs.
17.1.3 Budgeted operating expenses, and
17.1.4 All debt service costs and amounts required to meet minimum financial coverage requirements.
17.1.5 Commodity charge: That part of the rate schedule to be paid by customers which relates to the amount of energy used to produce hot and chilled water. Commodity charges are intended to cover the cost of energy to operate the system, chemicals, and water treatment.
17.1.6 Commodity adjustment charge: That part of the rate based on the variation of the estimated commodity revenues developed in an annual projection and actual commodity related costs incurred by the company. The commodity adjustment charge is intended to be used from time to time for revenue shortfalls or surpluses, typically attributable to higher than anticipated fuel costs.
17.1.7 Late fee: The company may charge a late payment penalty of five (5) percent of the total amount due which may be added to bills which are not paid within twenty-one (21) days of the billing date.
17.1.8 Surcharge: That part of the charge used to cover company costs associated with the franchise fee, state and local taxes.
Sec. 18. Amendment or Changes to Agreement.
18.1 Any alterations, amendments, deletions, or waivers of the provisions of this Agreement are valid only when reduced to writing and duly signed by the Parties.
18.2 Amendments, modifications, or additional schedules may not be construed to adversely affect vested rights or causes of action which have accrued prior to the effective date of such amendment, modification, or supplement. The term “this Agreement” as used herein is deemed to include any future amendments, modifications, and additional schedules made in accordance herewith.
Sec. 19. Notices.
Except as otherwise stated in this Agreement, any notice or demand to be given under this Agreement must be delivered in person, deposited in United States Certified Mail, or via electronic mail with Return Receipt Requested. Any notices or other communications should be addressed to the individuals and addresses listed below:
To the City:
To the Company:
The Heights Community Energy, Inc.
Attention: General Counsel
305 St. Peter St., Saint Paul, MN 55102
Michael.auger@ever-greenenergy.com
Sec. 20. Survival of Obligations.
20.1 The respective obligations of the City and Company under these terms and conditions-which by their nature, would continue beyond the termination, cancellation, or expiration of the Agreement-will survive such termination, cancellation, or expiration.
20.2 If a court or governmental agency with proper jurisdiction determines that this Agreement, or a provision herein, is unlawful, this Agreement or that provision, will terminate. If a provision is so terminated but the Parties legally, commercially, and practicably can continue this Agreement without the terminated provision, the remainder of this Agreement will continue in effect.
Sec. 21. Human Rights/Affirmative Action/Economic Opportunity Requirements and Specifications.
Company must comply with the City of Saint Paul's Affirmative Action Requirements in Employment pursuant to Section 183.04 of the Saint Paul Legislative Code, the Rules Governing Affirmative Requirements in Employment, and Chapter A-12 of the Saint Paul Administrative Code governing workplace conduct. The Company agrees to comply with all federal, state and local laws, resolutions, ordinances, rules, regulations and executive orders pertaining to unlawful discrimination on account of race, creed, religion, color, sex, sexual or affectional orientation, national origin, ancestry, familial status, age, disability, marital status, or status with regard to public assistance and will take affirmative steps to ensure that applicants are employed and employees are treated during employment without regard to the same.
Sec. 22. Sale or transfer of the franchise; sale or transfer of stock.
22.1 The franchise shall not be assigned or transferred or leased, sublet or mortgaged in any manner whether by sale or lease of assets or transfer of control of the Company or its parents, or otherwise, either in whole or in part, nor shall title thereto, either legal or equitable or any right, interest or property therein, pass to or vest in any Person without the prior written consent of the City Council, which consent shall not be unreasonably withheld. No authorization of the Council shall be required for any mortgage, pledge or other encumbrance of this franchise ordinance or the geothermal system as security for financing purposes, so long as:
22.1.1 the mortgage, pledge or other encumbrance may not allow any Person to succeed to the Company's interest in the franchise or the system without the prior approval of the City; and
22.1.2 the terms and conditions of the mortgage, pledge or other encumbrance must be subordinate to the terms and conditions of this franchise.
22.2 The Company shall promptly notify the City of any actual or proposed change in, or transfer of, or acquisition by any other party, of control of the Company, or any other event constituting a transfer of the franchise, and shall file a request for approval of the transfer containing such information as requested by the city. The word "control," as used herein, is not limited to major stockholders, general partners, and limited partners, but includes actual working control in whatever manner exercised. Without limiting the foregoing, a ten percent (10%) change or more in the ownership of Company shall be presumed to be a change in control. Every change, transfer or acquisition of control of the Company shall make the franchise subject to cancellation unless and until the Council shall have consented thereto, which consent will not be unreasonably withheld.
22.3 The acts described in 22.1 - 22.2 are collectively referred to as "transfers," and the entity or entities to whom transfer is to be made is referred to below as the "transferee."
22.4 For the purpose of determining whether it shall consent to a transfer, the City may inquire into the qualifications of the prospective transferee, and the Company shall assist the Council in any such inquiry. The proposed transferee must show financial responsibility as determined by the City and must agree to comply with all provisions of the franchise. A request for a transfer will not be granted unless the Council determines that:
22.4.1 there will be no adverse effect on the public interest, or the City's interest;
22.4.2 the transferee will agree to be bound by all the conditions of the franchise and to assume all the obligations of its predecessor; and
22.4.3 any outstanding compliance and compensation issues have been resolved or are preserved to the satisfaction of the City.
22.5 The consent or approval of the Council to any transfer shall not constitute a waiver or release of the rights of the City, and any transfer shall, by its terms, be expressly subordinate to the terms and conditions of the franchise and any amendments or agreements related thereto.
22.6 In no event shall any transfer be approved without transferee becoming a signatory to the franchise, and any amendments or agreements related thereto and reimbursing the city all reasonable costs and expenses related to the transfer review.
22.7 The company and city acknowledge and agree that if this franchise is sold or transferred pursuant to this Section 22, or if the Company should acquire another utility provider authorized to provide gas, electric or geothermal service, the franchise fee obligations set forth in Section 5 and the regulatory fee obligations set forth in Section 8 shall no longer be subject to any deferral and shall instead commence on the closing date of said transfer or acquisition (“Commencement Date”) . Upon the Commencement Date the company shall remit payment to the city, together with appliable interest, for all deferred fees that have accrued from the Effective Date of the ordinance under Sections 5 and 8 herein.
Sec. 23. Termination and forfeiture.
23.1 In addition to all other rights and powers retained by the City under the franchise, the city code, or otherwise, the City reserves the right to forfeit and terminate the franchise and all rights and privileges of the Company hereunder in the event of a substantial breach of its terms and conditions. A substantial breach by Company shall include, but shall not be limited to, the following:
23.1.1 Violation of any provision of the franchise or any rule, order, regulation, or determination of the City made pursuant to the franchise;
23.1.2 Engaging in a course of conduct intentionally designed to practice any fraud or deceit upon the City, any resident, or any other user of the system;
23.1.3 Attempting to evade the provisions of the franchise;
23.1.4 Failure to provide the types or quality of service as required herein;
23.1.5 Any material misrepresentation of fact in application for or negotiation of the franchise;
23.1.6 Failure to maintain required bonds and/or insurance.
23.2 A breach listed in Section23.1 will not qualify as a major breach if the violation occurs as a result of circumstances beyond Company's reasonable control.
23.2.1 Forces beyond the Company's reasonable control, include, but are not limited to: Natural disasters, civil disturbances, power outages and severe or unusual weather conditions.
23.2.2 Events within the control of the Company include, but are not limited to: Delays caused by the Company’s own act or failure to timely act or plan for action.
23.2.3 The Company will not be excused by mere economic hardship nor by misfeasance or malfeasance of its directors, officers, or employees.
23.3 If the City determines that the Company substantially violated any provision of the franchise, any rule or regulation promulgated pursuant to this Agreement or franchise, or any applicable federal, state, or local law, the City shall make a written demand to remedy the violation. The City’s written demand will be made by registered mail-return receipt requested-upon the Company. The demand will require the Company to remedy the violation and will warn the Company that continued violation may be cause for termination. The City will give the Company thirty (30) days after service of this written demand to correct the violation.
23.3.1 Within that thirty-(30) day period, the Company must either,
(a) cure the violation, or
(b) provide satisfactory written proof that a cure cannot be completed within the thirty (30) day period, but that the cure is being actively and expeditiously pursued and will be completed within a time certain.
23.3.2 If the violation, breach, failure, refusal or neglect is not fully cured within that thirty (30) day period following written demand; or if there is not written proof satisfactory to the City that corrective action has been taken or is being actively and expeditiously pursued so that the cure will be completed by a time satisfactory to the City; or if the City provides the Company additional time to cure and the Company fails to cure within a time satisfactory to the City; the City may place the issue of termination of the franchise before the City council.
23.4 If the City chooses to place the issue of termination before the City Council, a public hearing shall be held, and the Company will be given an opportunity to be heard at that hearing. The City will provide the Company with written notice of that hearing to the Company of the cause for termination, the intent to terminate, and the time and place of the public hearing.
23.4.1 The City Council will comply with all relevant federal, state, and local laws when conducting any termination-hearing. The City Council will also comply with any local rules or procedures adopted or regularly practiced by the Council when conducting public hearings.
23.4.2 The City Council will determine, in its discretion, whether or not any violation by the Company has occurred. If the Council determines that the violation by the Company was within its control, and that the Company has failed to completely cure the violation, the Council may, by resolution, declare that the Company's franchise be forfeited and terminated.
23.4.3 Nothing in this franchise prevents the City from providing the Company with additional opportunities to cure. The City Council may not give Company any opportunity to comply where fraud and/or misrepresentation has been alleged and proved to the Council's satisfaction.
Sec. 24. Labor policies.
24.1 The wages and benefits paid to the occupational groups utilized by the Company or its contractors or subcontractors in the construction, operation, or maintenance of the geothermal system shall not be less than the wages or fringe benefits paid to comparable positions in the classified civil service system.
24.2 Company shall recognize the right of its employees to bargain collectively through representatives of their own choosing in accordance with applicable laws and shall deal with representatives duly elected by a majority of its employees for the purpose of collective bargaining with respect to compensation, hours of employment or any other terms, conditions, or privileges of employment.
Sec. 25. Safety and infrastructure reporting.
The company and the city shall meet annually at a mutually convenient time to discuss items of concern or interest relating to the company’s safety and service reliability in the previous year, infrastructure plans, if any, for the coming year and other matters raised by the city or the company. Upon request, the Company shall provide data that identifies aging infrastructure within the city that may need replacement and the company’s plans for replacement.
Sec. 26. Abandoned facilities.
The company shall comply with city ordinances, Minnesota Statutes, Sections 216D.01 et seq. and Minnesota Rules, part 7819.3300, as they may be amended from time to time. The company shall maintain records describing the exact location of all abandoned and retired facilities within the city, produce such records at the city’s request and comply with the location requirements of Section 216D.04 with respect to all facilities, including abandoned and retired facilities.
Sec. 27. Service of process and consent to jurisdiction.
The Company shall designate an agent within the City who will accept service of process against the Company from the City or any other party in enforcing this franchise or in asserting any other right or claim. The Company consents to, and submits to, the laws, jurisdiction of the Ramsey County Minnesota District Court. For any matters appropriate to federal court jurisdiction, the Company consents to jurisdiction in the United States District Court for the District of Minnesota.
Sec. 28. Entire Agreement.
Specifications and other solicitation materials specifically referenced and incorporated into this Agreement and these General Terms and Conditions constitute the entire Agreement between the parties and supersede all prior oral or written negotiations.
Sec. 29. Effective Date.
This franchise shall take effect and be in force thirty (30) days from and after its passage, approval, and publication by the City under the procedures in Section 6.05 of the City’s Charter (“Effective Date”).