07-1109� ��
AMENDED 12/OS/2007
Council File # 07-1109
Green Sheet # 3046332
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
Presented by
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An ordinance ganting the District Cooling Franchise, held by the
District Cooling St. Paul, Inc. for a Period of Twenty Years, Ending in 2027
Tf� COUNCIL OF TF� CITY OF SAINT PAUL DOES ORDAIN:
Secrion 1.
That the Saint Paul Legislative Code be amended by repealing Appendix K.
Section 2.
That the Saint Paul Legislarive Code be amended by adding thereto a new
Appendix K to read as follows:
'�U�L1Sy��
JAN 2.� 1008
APPENDIX K. DISTRICT COOLING FRANCHIS�DISTRICT COOLING ST. PAUL, INC.
Cross reference(s)--General franchise requirements, Charter Chapter 16.
Secfion 1. Franchise granted.
District Cooling St. Paul, Inc., (f/k/a District Energy Services, Inc.) a nonprofit Minnesota corporation, hereinafter
referred to as "District Cooling," is hereby granted a franchise to use and occupy the streets and other public
properiy within the CiTy of Saint Paul for the purpose of constructing, maintaining and operating a system of pipes,
subways and manholes with all other necessary appurtenances only for carrying on a district cooling system
providing thermal energy to customers within said city and for provision of a fiber opric network for District
Cooling and governmental use by the CiTy of Saint Paul, the State of Minnesota, the County of Ramsey, and by
other govemment enriries as may hereafter be approved by ciTy council resolution. Said franchise may not be sold,
transferred, assigned, pledged, mortgaged or in any way disposed of or encumbered without the consent of the ciTy
except as provided in Section 16.
Secfion 2. Definifions.
For the purpose of this chapter the following terms, phrases, words and their derivations shall have the meaning
given herein. When not inconsistent with the context, words used in the present tense include the fuhue, words in
the plural number include the singulaz number, and words in the singulaz number include the plural number. The
words "shall" and "will" aze mandatory and "may" is permissive. Words not defined shall be given theu common
and ordinary meaning.
A. Capitalization cost shall mean the total cost incurred by District Cooling for the tangible assets of
the district cooling system, exclusive of intangible assets such as goodwill or value of the
franchise; provided that capitalization cost shall in no event be less than the amount required to
Appendix K, District Cooling Franchise Agreement, Page 2 of 14
t fully pay and dischazge all debts of the company incurred in connection with the district cooling
2 system. D�� ��0 .(�
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a B. Ciry shall mean the City of Saint Paul, Minnesota, a home-mle municipal corporation.
6 C. Distribution facilities shall mean all District Cooling piping, tunnels, conduits, vaults, chambers,
� cable or any other appurtenance or structure located in the streets and necessary or used for the
8 delivery of thermal energy or a fiber optic network for government use.
10 D. District cooling service agreement shall mean the standazd form of the uniform contract for service
11 entered into by District Cooling and its customers.
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13 E. District cooling system or system shall mean the distriburion faciliries together with the chillers,
14 cooling towers, pumps, and other District Cooling equipment used to provide chilled water.
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16 F. District energy services, District Cooling or company shall mean District Cooling St. Paul, Inc., a
17 subsidiary of District Heating Development Company, d.b.a. District Energy Saint Paul, Inc.,
is District Cooling's subsidiazies, successors and assigns.
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20 G. Dish^ict Energy Saint Paul, Inc., District Energy or District Heating Development Comparry shall
21 mean District Heating Development Company, d.b.a. Dish�ict Energy Saint Paul, Inc., its
22 subsidiaries, successors and assigns, excluding District Cooling.
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24 H. Financial services director shall mean the d'uector of the office of fmancial services for the City of
25 Saint Paul or his or her designee, or any successor to his or her functions.
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27 I. Gross earnings sha11 mean all sums received or receivable by the company in demand and energy
z8 charges from the sale of thermal energy to customers of District Cooling and all sums collected by
29 District Cooling for routine maintenance or use of the fiber optic network serving the State of
3o Minnesota, the County of Ramsey, and other government entiries as approved by the City. For
31 purposes of this franchise and the district heating franchise, District Energy shall not be deemed a
32 customer of District Cooling nor shall District Cooling be deemed a customer of District Energy.
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3a J. Public works director shall mean the director of the department of public works for the CiTy of
35 Saint Paul or his or her designee, or any successor to his or her functions.
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37 K. Street shall mean the surface, and the spaces above and below, any public street, boulevard, road,
38 highway, freeway, lane, alley, court, sidewalk, pazkway, river, skyway or skyway bridge, or any
39 other public place or area under control of the city, now or hereafter existing.
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az Section 3. Application aud service of notice.
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44 The Office of Financial Services of the CiTy of Saint Paul is the department that is primazily responsible for the
45 city's administrarion of this franchise. Except as otherwise specifically provided herein, any applications and
notices required or permitted to be given under this ordinance shall be deemed properly given when deposited with
the United States Postal Service, postage paid, addressed to the parry to receive same at the address set forth below,
or at such other address of which the parry to receive the notice shall have designated in the franchise. The fmance
director shall develop all forms necessary to administer this chapter.
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Notices to the city shall be addressed to the following:
Director of Financial Services
Room 700 City Hall
15 West Kellogg Boulevard
St. Paul, MN 55102
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Appendix K, District Cooling Franchise Agreement, Page 3 of 14
1 Norices to District Cooling shall be addressed to the following: 6 ��/ /O �
2 (
3 President
4 District Cooling St. Paul, Inc.
5 76 West Kellogg Boulevard
6 St. Paul, MN 55102-1611
9 Section 4. Term of franchise.
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1 I This franchise shall be in full force and effect for a term and period of twenty (20) yeazs, beginning on the effecrive
1z date ofthis ordinance.
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15 Section 5. Nonexclusive franchise.
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17 This franchise for the operation of a district cooling system shall be a nonexclusive franchise. The franchise granted
18 shall be subject to the limitations imposed by this ordinance and reasonable regularions designed to protect the
�9 health, safeTy and welfaze of the populace. District Cooling must specify to the public works director the locations
20 of all faciliries placed in the streets and shall strive to notify the public works d'uector not less than ninety (90) days
21 prior to any additions to these faciliries. District Cooling may request that any information provided pursuant to this
zz franchise be deemed nonpublic data as defined in Minnesota Statutes 1337 et seq., and the city shall treat the
23 information as nonpublic in accordance with the terms of that statute and any other applicable ordinances, rules or
z4 regulations.
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Section 6. Interpretation.
Unless otherwise specifically prescribed herein, the following provisions shall govern the interpretation and
construction ofthe franchise granted underthis ordinance:
A. District Cooling shall not be relieved of its obligation to promptly comply`with any provision of
this franchise by any failure of the city to enforce prompt compliance with the same or any other
provision.
B. Any right or power conferred or duly imposed upon any ofFicer, employee, department, or board of
the city is subject to transfer by operation of law to any other officer, employee, department or
boazd of the ciTy.
C.
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Unless otherwise directly or indirectly provided herein, this franchise shall not relieve District
Cooling of any requirement of the city Charter or provision of the I,egislative or Administrative
codes of the city.
The granting of this franchise ar any of the provisions contained herein shall not be construed to
prevent the city from granting a snnilar franchise to any other person or corporation.
E. This franchise is granted pursuant to applicable state and federal law and District Cooling shall at
all times comply with all applicable present and future laws, rules and regularions. By acceptance
of this franchise District Cooling does not waive its rights under such laws, nxles and regularions.
Furthermore, District Cooling shall obtain all necessary permits, franchises and authority required
pursuant to city, state and federal rules, regulafions and laws.
Section 7. Limitations upon franchise.
A. No privilege or exemprion is granted or conferred by this franchise except those specifically
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Appendix K, District Cooling Franchise Agreement, Page 4 of 14
1 prescribed herein.
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3 B. Any privilege claimed under this franchise by District Cooling in any street shall be subordinate to
4 any prior recorded easement.
7 Section 8. Rights reserved to city.
9 The city reserves every right and power which is required to be reserved by any provision of the city Charter or any
lo statute, rule or regularion. Except as otherwise provided herein, neither the granting of this franchise nor any
11 provisions thereof shall constitute a waiver or bar to the exercise of any governmental right or power of the city.
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14 Secfion 9. Duties and responsibiliries.
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16 The fmance director, or his or her duly authorized representative, is the principal city official responsible for the
1� adminish�ation of this franchise, and all questions regazding interpretation or application of this franchise shall be
IS raised initially with that designated official.
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2o Failure or refusal by the fmance d'uector to respond to any question other than quesrions related to Section 23
21 herein within thirry (30) days of the date he/she receives it in written form, or District Cooling's receipt of a written
zz response from the finance director to any quesfion submitted in written form, shall be deemed e�austion by
23 District Cooling of its administrative remedies under this ordinance.
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26 Section 10. Technical standards.
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28 The franchise granted herein shall extend to the construction, operation and maintenance of the district cooling
z9 system by District Cooling in the City of Saint Paul and the fiber optic network installed for District Cooling and
30 governmental use.
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32 District Cooling shall perform all work and make all installafions in conformiTy with the standards for instailafion
33 established by the public works d'uector, which standards shall be consistent with those administered for all snnilaz
3a work by other parties. District Cooling shall, prior to commencement of any construction or usage of the public
35 streets or other public property within the CiTy of Saint Paul, file with the public works d'uector a detailed routing
36 map showing the placement of all facilities and other details of such construcrion or usage. Upon completion of
3� construcrion District Cooling shall provide the public works director with a set of "as built" drawings.
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District Cooling, in the installation, maintenance and operation of its distribution facilities, shall be subject to such
reasonable regulations as may lawfully be provided by the city, and no equipment shail be installed or laid by
District Cooling within the streets, except upon application to the public works d'uector or other persons designated
by the city council, and after written permission is granted by said director or person. District Cooling and the city
shall make reasonable good faith efforts to advise each other of plans and programs, both long and short range, for
the construction of improvements and facilities in public streets and other public property which might affect the
other parry or require its coordination. District Cooling shall not excavate or make installation in any public way
without having obtained a permit to do so as required by Chapters 116 and 135 of the Saint Paul Legislative Code,
and shall give the public works director at least foriy-eight (48) hours' notice prior to any excavation or installation
that requires a permit except in cases of emergency.
Section 11. Rates and regulation.
With respect to the setting of rates charged to customers the following shall apply:
A. All rates made, demanded or received by District Cooling shall be just and reasonable. Rates shall
not be unreasonably preferential, unreasonably prejudicial or discriminatory, but shall be
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Appendix K, District Cooling Franchise Agreement, Page 5 of 14
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1 sufFicient, equitable and consistent in application to each class of customers. Rates shall generate
2 sufficient revenue to allow District Cooling to recover its reasonable operating cost and expenses;
3 to provide for the timely and orderly payment of costs and expenses; to provide for the rimely and
4 orderly retirement of debt including, but not limited to, the bonds issued by the HRA and other
s public issuers and the HRA subordinate loans issued for financing the system; to provide coverage
6 on such bonds and the debt service on HRA subordinate loans; and to provide for improvements,
7 enlazgements and extensions necessary to adequately service the territory of the city, including the
8 principal and interest to become due on obligarions issued or to be issued.
lo B. The rates contained in Schedule A, attached to this ordinance incorporated herein by reference,
1 t shall remain in force unril amended or changed.
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13 C. District Cooling shall not d"uectiy or indirectly chazge, demand, coliect or receive from any
la customer or person a greater or less compensation for any service rendered or to be rendered by it
15 than that prescribed in Schedule A; nor shall any person knowingly receive or accept any service
16 from Dish�ict Cooling for a compensation greater or less than that prescribed in Schedule A.
1� District Cooling shall not, as to rates or service, make or gant any unreasonable preference or
18 advantage to any person or subject any person to any unreasonable prejudice or disadvantage.
19 Nothing contained in this ordinance shall be construed to impair the tas-exempt status of bonds
2o issued to finance the system. "Service," as used herein, does not include customer connection
21 chazges or other schedule of chazges for specific services to individual customers.
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D. District Cooling 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 ail d'uections of the
ciry relating to these books, accounts, papers and records, including fiunishing of such information
or compilafions and permitting an audit of the books, accounts, papers and records, as may be
requested by the city. Such books, accounts, papers and records shall include a detailed tracking of
all expenses directly related to the operarion of the system and any other subsidiary operations of
District Cooling or District Energy, and an allocation of those expenses by business and customer
classes.
E. After thirty (30) days' notice to the ciTy, District Cooling may file pursuant to Section 23 a new or
amended Schedule A, containing new or amended rates, fees and/or chazges, together with rules
and regularions not inconsistent with the district cooling service agreement. Such changes aze
jurisdicrional to changes in Schedule A. Such new or amended rates shall be effective and may be
charged on the tenth day after the filing of the new or amended Schedule A in the office of the city
clerk, and shall continue in effect until approved or denied by the city council by resolution, or
unril deemed approved pursuant to Section 23.
4o F. The proposed changes shall be approved by a ciTy council resolution if they are just, reasonable
41 and nondiscriminatory. The city shall be required to take into account the requirements of
42 subsection 11.A. above in reviewing the proposed new or amended Schedule A. The city shall alsc
43 be required to take into account the operation of the terms and conditions of the district cooling
44 service ageement, including Articles VI, VII and XXI thereof, which is the uniform contract
45 entered into by District Cooling and its customers providing for a detailed method of charges for
a6 demand and energy related costs. The district cooling service agreement shall be filed in the office
47 of the city clerk at the same time as the written acceptance required by Secrion 26 herein.
a8 Amendments to the district cooling service ageement shall be filed with the ciTy clerk at least
a9 thirry (30) days prior to the effective date of such an amendment or amendments; provided,
5o however, that no amendment to Articles VI, VII and XXI of said agreement shall be effective
51 unless and until approved by a city council by resolurion. Any amendment to other sections of the
52 district cooling service agreement shall be effecfive thiriy (30) days after filing in the absence of a
53 resolution by the city council disapproving such amendment.
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55 G. Proposed changes to Schedule A shall by ciry council resolution be approved, approved in part if
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Appendix K, District Cooling Franchise Agreement, Page 6 of 14
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1 severable, or denied, and cannot be modified or amended. The city shall require District Cooling to
2 refund or credit to its customers any increases in rates which are in excess of the lawful and
3 reasonable rates as fmally determined.
6 Secrion 12. Regulatory effort—Staffmg and process.
8 For the purpose of assisting the city in the regularion of the acfivities and rates of District Cooling as provided in
9 this franchise, the finance director shall provide sufficient staff resowces for the regulatory effort and the ciTy
to attorney shall appoint an assistant city attorney or other attomey to perform the legal work that such regulation
11 necessitates.
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13 District Cooling shall pay the ciTy during the term hereof an annual regulatory fee equivalent to the annual
la regulatory fee paid by Dish Heating Development Company, d.b.a. District Energy St. Paul, Inc., pursuant to the
ts franchise granted said company. This fee shall be payable annually on July l, beginning July 1, 2008, and shall be
16 used solely to pay the cost of regulafion, which is not limited to but may include that part of the salary and expenses
t7 of the individuals appointed by the fmance director and the city attomey, their assistant or assistants, clerical help
t8 and office expenses, outside accountants, attorneys, advisors and consultants' fees reasonably related to the
t9 regulation of District Cooling, its rate schedules, and other matters and operations under this franchise. The amount
20 of such payment or payments shall be allowed as an operating expense of District Cooling in the City of Saint Paul.
2t Such sum shall be adjusted each yeaz by a dollar amount expressed in percentages equal to the percentage increase
22 or decrease in the U.S. All-Ciries Consumer Price Index for All Urban Consumers (or its successor index) for the
23 latest twelve-month period, the adjushnents to be cumulative and based on the amount of the latest adjushnent plus
2a the previous yeaz's payment.
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27 Section 13. Reports to be t"iled.
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29 District Cooling shall file not later than the twenty-fifth day of each month with the finance director, a report of the
30 number of customers, sales and revenues by classes of service for the preceding month based upon its utiliTy
31 operations within the CiTy of Saint Paul.
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33 District Cooling shall also file with the fmance director, within three (3) months after October 1 of each yeaz, in a
34 format to be approved by the finance director, an audited fmancial statement and any other information requested
35 by the fmance director, covering the utiliTy operarions within the CiTy of Saint Paul for the preceding yeaz,
36 including all revenues, expenses and plant investment, together with such breakdown and analysis of operating
3� statements as the said person may request. The city shall haue the right to require additional informarion concerning
38 operations under this ordinance from time to time in such form as may be prescribed.
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4o The ciTy shall have the right, at a11 reasonable times and upon reasonable notice, to examine the books of accounts,
al records, vouchers, disbursements, rates, revenues, contracts, purchases, sales and other transactions beazing on and
42 relevant to the rates District Cooling chazges and the service it provides to its customers in the CiTy of Saint Paul.
a3 The provisions of this Section 13 are subject to the regularions of the last sentence in Secrion 5 hereof.
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a6 Section 14. Relocation.
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48 In locating its distribution facilities, District Cooling shall in no way unreasonably interfere with the safery and
49 convenience of ord'mary travel along and over the streets nor interfere with other uses to which such places aze put
5o by the City of Saint Paul, any of its redevelopment agencies, the Housing and Redevelopment Authority (HRA) of
sl the City of Saint Paul, or the Saint Paul Port Authority (Port Authority) and the Boazd of Water Commissioners of
52 the City of Saint Paul. In the event it shall become necessary during the term of this franchise to remove or relocate
53 the physical property of District Cooling located within or upon any of the streets or public properry in the city
54 because of such interference or use required by the city, fIRA or Port AuthoriTy or as a result of any public
55 improvement undertaken by the ciry, HRA or Port Authority, District Cooling shall, when so advised by the city
56 council, remove and relocate said distribution facilities without delay and without cost to the city, HRA or Port
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Appendix K, District Cooling Franchise Ageement, Page 7 of 14
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1 Authority and shall place streets or public property in the same condition as they were prior to said removal or
2 relocafion. However, after District Cooling has so relocated its distribution facilifies, District Cooling shall not
3 within ten (10) years thereafter be required at its owners expense to make any further relocation of the same
4 distriburion facilities if at the time of the fust relocation the city had actual nofice or laiowledge of the subsequent
5 public improvement project. The city shall strive to give the District Cooling at least one hundred eighty (180) days'
6 prior norice of plans for improvements which may require relocarion by District Cooling. In the event that District
� Cooling is required to remove its distribution faciliries at the request of the city, the city shall cooperate with
8 Dish�ict Cooling in order to identify an alternative location for the relocation of the facilities.
lo Except where required for a public improvement project, the vacation of any street or public property, after the
� 1 installarion of District Cooling dish faciliries, shall not operate to deprive District Cooling of its rights to
12 operate and maintain such distribution facilities until the reasonable cost of relocating the same and the loss and
13 expense resuiting from such relocation are first paid to District Cooling by the private property owner.
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15 Tn an emergency, as determined by the city, when District Cooling or its representative is unavailable and/or unable
16 to provide the necessary immediate repairs to a damaged or malfuncrioning installation by District Cooling, or to
t7 any fauks or settled or sunken azeas that may develop in any azea over, azound or adjacent to the installarion of
t8 District Cooling, the city, when apprised of such an emergency, shall haue the right to make the necessary repairs
t9 with the total cost of same being chazged to District Cooling. The city must attempt to contact District Cooling at its
20 offices prior to commencement of any emergency repairs.
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Section 15. Fees.
During the term of the franchise District Cooling shatl pay the city an annual franchise fee in the amount of 3.4
percent of District Cooling's annual gross eamings. Said paytnents shall be made in monthly installments. The
payment shall be due on or before the twenty-fifth calendaz day of the succeeding month. The payment obligation
shall be met if the payment is mailed and postmarked on or before the due date. In no event shall District Cooling
be required to pay a franchise fee in excess of the amount which it can legaily collect from its customers in the city
by means of a surchazge on its rate schedule for the purpose of collecting the franchise fee.
Section 16. Assignment.
The rights granted District Cooling by this franchise inure to the benefit of District Cooling, and any pazent,
subsidiary, affiliated or successor entity now or hereafter existing. The rights shall not be assignable without the
express written consent of the city council, except District Cooling may assign its rights under this ordinance to
District Heating Development Company, d.b.a. District Energy St. Paul, Inc., without such consent, so long as such
assignee assumes all of the obligations of the franchise and is bound to the same extent as District Cooling. Such
consent shall not be azbitrarily, capriciously or unreasonably withheid, delayed or condirioned. Any required
consent is to be evidenced by an ordinance of the city council that fully recites the terms and conditions, if any,
upon which consent is given.
44 Notwithstanding the foregoing, the city hereby consents to the assignment of District Cooling's rights under this
45 ordinance to the trustee for bonds issued by the Housing and Redevelopment Authority of the City of Saint Paul,
46 Minnesota (the "IIRA") or to any other public issuer to fmance the district cooling system, such assignment being
47 for the purpose of securing District Cooling's obligarion to repay the loan from the HRA to District Cooling of the
a8 proceeds of such bonds. The ciTy further consents to any amendment or supplement to the security instrument
49 providing for such assignment if executed and delivered in connection with bonds issued in the future by the HRA
so or any other public issuer to provide financing for the district cooling system. In the event such trustee forecloses
51 upon or enforces such security interest, the city shall recognize the rights of such trustee as a successor to District
52 Cooling under this ordinance without any further consent from the city. The consent of the ciTy further extends to
53 the assignment to a bank, insurance company or other enrity providing credit enhancement for the bonds issued by
sa the HRA or any other public issuer if such credit enhancer becomes a co-mortgagee or co-secured party with the
55 bond trustee. The ciTy fiuther consents to the assignment to the HI2A of District Cooling's ri�ts under this
56 ordinance to secure repayment of a loan (sepazate and apart from the loan of bond proceeds) made to District
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Appendix K, Distria Cooling Franchise Ageement, Page 8 of 14
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� Cooling by the HRA to fmance the district cooling system, and the city similazly agrees that if the I-IRA forecloses
2 upon its security interest in the ordinance, the city will recognize the HRA as the successor to District Cooling
3 under this ordinance without any further consent from the city.
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6 Section 17. Subleasing of facilities.
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8 District Cooling shall not sublease any part of the system to any person or enrity not related to or �liated with
9 District Cooling without the consent of the city. District Cooling must retain responsibility for seroicing and
lo repairing all parts of the system if it enters into any sublease.
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13 Section 18. District Cooling indemnification and liability for damages.
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15 A. The company shall indemnify and save the city whole and hazmless from any and all claims for
16 injury or damage to persons or properry occasioned by or arising out of the conshuction,
17 maintenance, operation or repair of the system or by the conduct of District Cooling's business in
18 the ciTy whether or not any act or omission complained of is authorized, allowed or prohibited by
19 this franchise. The company shall reimburse the city for all expenses incurred by the city in
2o defending itself, its officers, agents or employees, against any and all claims for damages or
21 penalties. These expenses shall include, but not be limited to, attorney fees, expert witness fees and
22 court costs and shall also include the reasonable value of any services rendered by any officers or
23 employees of the ciTy.
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25 B. The city shall not and does not by reason of the ganting of this franchise assume any liability of
26 District Cooling whatsoever for injury to persons, damage to property, loss of seroices, damage
27 claims by users, or other penaities. The foregoing does not indemnify the ciTy for its own
28 negligence except for claims azising out of or alleging the city's negligence where such negligence
z9 azises out of or is prunazily related to the construction, operation, maintenance or repair of said
3o system, including, but not limited to, the issuance of permits and inspection of plans or work. This
31 section is not, as to third parties, a waiver of and defense or immunity otherwise a�ailable to
32 District Cooling or the ciTy; and District Cooling, in defending any action on behalf of the city,
33 shall be entitled to assert in any action every defense or immuniTy that the city would be able to
3a assert on its own behalf.
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C. District Cooling 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 the city, its officials, officers,
boards, commissions, employees or agents, for any other award of a franchise made in conformity
with applicable local, state or federal law.
5ection 19. Liability insurance.
A. District Cooling shall purchase and maintain such insurance as will protect District Cooling and
subcontractors from claims set forth below which may arise out of or result from District Cooling
operations under this ordinance, whether such operations be by District Cooling or by any
subcontractor or by anyone d'uectly employed by them, or by anyone for whose acts any one of
them may be liable. District Cooling may self-insure any or all of the following if authorized by the
commissioner of the Department of Commerce of the State of Minnesota.
51 B. District Cooling shall obtain the following and submit certificates of insurance to the fmance
52 director in amounts to be determined by him or her; provided, that while any loan ageement
53 between District Cooling and the Housing and Redevelopment Authority of the City of Saint Paul
54 remains in effect, required insurance amounts shall be as provided in such agreement:
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56 1. Workers' compensation and employers' liability insurance.
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General liability insurance.
Automobile liability insurance.
6 C. All certificates of insurance shall provide that the insurance company �ve the ciTy tluough its
7 finance director thirry (30) days' prior written notice of cancellarion, nonrenewai, or any material
8 changes in the policy, and shali name the city as an additional insured.
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l0 A The above pazagraphs establish minimum insurance requirements and it is the sole responsibility
11 of District Cooling to purchase and maintain addirional insurance that may be necessary.
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13 E. District Cooling shall not commence construcfion of the initial distriburion facilities until it has
ia obtained the required insurance and filed an acceptable certificate of insurance with the finance
i s director.
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17 F. Nothing in this franchise shall constitute a waiver by the city of any statutory limits or exceptions
18 on liability.
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2o G. District Cooling's failure to procure or maintain required insurance shall constitute a material
21 breach of this franchise and shall also, at the city's discretion, allow the city to procure or renew
22 such insurance to protect the ciTy's interests and pay any and all premiums in connection therewith
23 and recover all monies so paid from District Cooling.
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z6 Section 20. Future uses.
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28 The city reserves the right, subject to further condifions described in this section, to lay and permit to be laid sewer,
29 gas, water, and other pipelines or cables and conduits, and to do and permit to be done any underground and
30 overhead 'mstallation or improvement that may be deemed necessary or proper by the governing body of the city in,
31 across, along, over or under any streets occupied by District Cooling and to change any curb or sidewalk or the
32 grade of any street. The foregoing right is subject to the condirion that if the laying of such pipelines or cables or
33 conduits or the doing of any said installarion or improvement is on behalf of or for an entity other than the city,
34 such laying of pipelines or cables or conduits or doing of any said installation or improvement shall not interfere
35 with District Cooling's existing distribution facilities and said entity or entiries shall be required by the city to
36 compensate District Cooling for any damage so caused; provided, however, that in permitting such work to be done
3� by said other entity or entiries, the city shall not be liable for any damage so caused; further provided, however, tltat
38 nothing in this section or elsewhere in this franchise shall relieve the city of liabiliTy for any damages it causes to
39 District Cooling's distribution facilities by reason of the city's, or its contractor's, work in laying pipelines or cables
40 or conduits or doing of any installation or improvement described above.
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Section 21. Termination and forfeiture.
A. In addition to all other rights and power retained by the ciTy in this ordinance, the city reserves the
right to terminate this franchise and all rights and privileges of this franchise in the event of a
material breach by District Cooling of its terms and condifions. A material breach by District
Cooling shall mean one or more of the following:
Violation of any material provision of this franchise;
2. Disposing of any of the facilities or properiy of its system with the intent solely to prevent
the ciTy from purchasing it as provided for herein;
Material intentional misrepresentation of fact in an application pursuant to Section 23; or
Q:�Dist. Heat & Cooling Franchises\district cooling ord - 12-5-07.doc
Appendix K, District Cooling Franchise Ageement, Page 10 of 14
1 4. Failure to maintain necessary insurance.
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3 B. The foregoing shall not constitute a material breach if the violarion occurs but it is without fault of
4 District Cooling or occurs as a result of circumstances beyond District Cooling's reasonable
5 control. Circumstances beyond the control of District Cooling shall include, but not be limited to: ,
6 acts of God; strikes, lockouts or other labor disturbances; unavailabiliTy of labor or materials;
7 failure of other utilities to perform walkout and make ready and to locate underground uriliries in a
8 timely manner; orders or restraints of any kind of the government of the United States or the State
9 of Minnesota or their respecfive deparhnents, agencies or officials or any civil or military authoriry;
10 insunecfions, riots; landslides, earthquakes, fires, storms, droughts, floods; explosions; breakage or
11 accident to machinery, pipes or lines; or any other extraordinary cause or event not reasonably
12 within the control of District Cooling and not proximately caused by its negligence. Dish
t3 Cooling shall not 6e excused by mere economic hazdship, nor by malfeasance or misfeasance of its
14 d'uectors, officers or employees.
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16 C. District Cooling shall be given written no6ce by the ciTy of any material breach of this ordinance
17 and shali have thirry (30) days from receipt of such notice to remedy any failwe consfituting such a
18 breach.
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2o D. If, upon expiration of the thirty-day period refened to in pazagraph C above, District Cooling shall
zl not have remedied the breach, the city may seek to terminate this franchise; in such case, the ciTy
22 shall file an applicafion for termination of the franchise in accordance with Section 23 hereof.
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za E. Upon receipt of the city council's approval or denial of the application to terminate the franchise
25 pursuant to Section23, District Cooling shall have nineTy (90) days within which to serve upon the
26 city an appeal of the city council's decision to District Court. Service of process of such appeal on
z7 the city shall be made upon the city clerk and the fmance d'uector.
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F. During the pendency of said application and the appeal provided for in pazagraph E hereof, the
rights and obligations of the ciTy and District Cooling hereunder shall continue in full force and
effect.
Section 22. Abandonment of service and removal of equipment upon abandonment, terminarion or
forfeiture.
If District Cooling abandons its distribution facilities or any portion thereof, it shall give prompt written notice to
the city. "Abandon," as used herein, shall mean to remove from service and refrain from using for three (3) yeazs or
more.
al A. Upon abandonment or upon termination or forfeiture of the franchise, District Cooling shall
42 remove the piping conduits, wires and appliances from the streets, alleys and other public places
43 within the city to which such abandonment or termination or forFeiture applies if the city so
4a requests in writing. District Cooling shall restore the azea according to the standazd specificarions
45 of the public works d'uector.
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B. Should District Cooling fail to remove the aforementioned equipment as requested by the city, the
city shall have the right to make such removal at the expense of District Cooling.
Section 23. Renewal or modification of franchise or change in Schedule A.
53 A. Procedure. Following the adoption and acceptance of the franchise and except as otherwise
54 specifically provided herein, all applications by the city or District Cooling for a renewal or
95 modification of the franchise or by District Cooling for a change in the rates, fees and{or charges
56 provided in Schedule A may be made and processed in accordance with the following procedure:
Q:�Dist. Heat & Cooling Franchises\district cooling ord - 12-5-07.doc
Appendix K, Dish Cooling Franchise Agreement, Page 11 of 14
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2 1. The city and District Cooling shall work to assure the orderly, timely and cost effecrive
3 process for review of the proposed changes.
5 2. The parry seeking such a renewal, modificafion or change shall file an applicarion with the
6 finance direct4r and the city clerk. The application shall include statements of all material
� facts, opinions and evidence supporting the applicarion. A renewal may involve
8 reneaoriation of any term contained in the franchise and consent to a renewal may not be
9 unreasonably withheld.
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3. The city clerk shall place the fact that an applicarion has been made upon the nea�t
available council agenda.
1a 4. The city council shall by resolution refer the applicafion to a committee of appropriate ciTy
15 staff. Within sixty (60) days after such referral, staff shall review the application, giving
16 due consideration to the provisions of Section 11.F. and other provisions of this franchise
» ordinance, and shall request in writing any clarifying or supplementary information needed
I8 from the party making the application. The party making the applicarion shall respond
19 within fourteen (14) days after receiving said request. Within seven (7) days after such
20 response, staff shall norify such pariy in writing whether the inforxnation provided is
21 sufficient. Following a notice of insufficient information, the applying parry shall have
22 seven (7) days to file rebuttal material.
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Not more than nineTy (90) days after referral to committee, staff shall have completed its
review and provided the council with a written evaluation. Upon staff request, the
committee chair may at his or her discretion extend staffs reporting deadline by no more
than fourteen (14) days.
6. No later than thirty (30) days after said staff report has been filed with the committee, the
committee, giving due considerarion to the provisions of Section 11.F. and other
provisions of this franchise ordinance, shall make a recommendation to the full council for
considerarion at the next scheduled council meeting.
The council, giving due considerarion to the provisions of Section 11.F. and other
provisions of this franchise ordinance, shall approve or deny the application within one
hundred eigtrty (180) days of the filing of said applicarion. Such 180-day period may be
extended by mutual agreement of Dish�ict Cooling and the city. Should an extension be
agreed upon, the chair of the committee considering the application may adjust the
committee and staffs timetable accordingly. However, whatever the extension may be, the
committee shall refer the applicafion back to the council at least thirty (30) days before the
final day for approval or denial. If no acrion is taken by the ciTy council on an applicafion
filed by District Cooling within one hundred eighty (180) days of filing, the application is
deemed approved.
Before this ordinance or any amendments thereto by ordinance shall be finally adopted by
the council, a public heazing shall be held upon ten (10) days' published notice in the
official newspaper. District Cooling shall bear the costs of publicafion of the franchise
ordinance or any amendments thereto.
5o B. Contested case heazing. At the request of District Cooling and in order to assist in determining
51 whether the proposed changes in Schedule A shall be approved or denied, the city may require a
5z public heazing before a heazing examiner who shall be selected by mutual agreement of city and
53 District Cooling within ten (10) days of District Cooling's request. The hearing examiner shall hold
sa a hearing as a contested case and make recommendations to the city. Upon receipt of such
55 recommenda6ons, the city shall by resolution approve or deny the proposed changes in Schedule A
% within 180 days of the filing of Dislrict Cooling's application. If no such action is taken by the city
Q:�Dist. Heat & Cooling Franchises\distria cooling ord - 12-5-07.doc
Appendix K, District Cooling Franchise Agreement, Page t2 of 14
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1 within 180 days of the filing of District Cooling's application or thirty (30) days after receipt of the
2 hearing examiner's recommendarions, whichever is greater, such proposed changes are deemed
3 approved.
5 In the event a contested case hearing is requested pursuant to this secrion, District Cooling shall
6 reimburse the city for expenses incurred as a result of that process, including all hearing examiner
� costs, plus other duectly related costs, such as city staff, expert witnesses, or consultants fees, up to
8 a masimum of ten thousand dollazs ($10,000.00) for such d'uectly related costs. The cost of any
9 city staff time shall be computed at the employee's rate of pay plus fringe benefits per hour of time
10 spent working on the contested case.
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12 C. District Cooling franchise expenses. All District Cooling costs related to or incurred in connection
13 with the provisions of this franchise shali be allowed as operating expenses.
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t8 In accepting this franchise, Dish Cooling acknowledges that its rights hereunder are subject to the lawful
�9 exercise of the police power of the city to adopt and enforce general ordinances necessary to the safety and welfaze
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of the public.
Section 25. Severability.
If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or
unconsritutional by any court or administrative agency of competent jurisdiction, such portion shall be deemed a
sepazate, distinct and independent provision and such holding shall not affect the validiTy of the remaining portions
thereof.
Secfion 26. Acceptance of franchise.
District Cooling shall, within thirty (30) days after the passage and approval of this franchise ordinance, file with
the city clerk its written acceptance in a form to be approved by the city attorney and shall agee to abide by, keep
and perform all the terms, limitations, conditions and provisions of tlais ordinance.
SCHEDULE A
RATES: The following rates shall be effective beginning with the billing month of October 2007 and shall
remain in effect until superseded:
Aemand:
Energy:
$24.79 per ton per month
$0.071 perton-hour
PROMPT PAYMENT PROVISION: A chazge of 5 percent will be added to the net bill computed at the rates
shown above, which chazge shall consritute a discount from the goss bill for payment within the discount period,
all as more specifically provided in the District Cooling Service Ageement.
FUEL ADNSTMENT: As provided in the District Cooling Service Agreement, the energy chazge may be
appropriately adjusted (i.e, spread over the remaining months in the fiscal yeaz) from time to time during the fiscal
year to cover cost increases (or decreases) occurring subsequent to the establishxnent of projected energy-related
costs for such period regarding energy purchased by District Cooling St. Paul, Inc., to the extent such costs are in
Q:�Dist. Heat & Cooling Franchises\district cooling ord - 12-5-07.doc
Appendis K, District Cooling Franchise Agreement, Page 13 of 14
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1 excess of (or below) those costs projected by District Cooling St. Paul, Inc. in establishing the energy charge for
z such period.
a SURCHARGE: A City Franchise fee surchazge of 3.5 percent will be added to the goss and net monthly bills
i computed under this rate schedule except as otherwise provided by law.
� SERVICE CHARGES: The service chazges shall be effecrive beginning with the billing month of October 2007
8 and shall remain in effect untIl superseded.
to Pursuant to Secrions 83 and 8.4 of the District Cooling Service Agreement as amended, the following rates aze
11 established for performance of specific services more properly chazged to an individual Customer than to all
12 Customers as a whole. Service chazges aze payable within 30 days of billing and aze in addition to Demand
i3 Chazges and Energy Chazges.
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t7 Flat charge: $200.00
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23 3. Unauthorized drainage of district cooling system water:
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25 The sum of the following:
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27 (a) Estimated quanrity of water lost times combined water and sewage rate and prorated Water
28 treahnent cost paid by District Cooling during period of drainage;
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Estimated thermal energy value of water lost times applicable Energy Rate; and
Service charge of $85.00/hour
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3a Note: Drainage of system water may cause hann to other Customers and is cause for Suspension of
35 service unril corrected.
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3� 4. Service calls made at Customer's request by District Cooling personnel for Problems Found to be in
38 Customer's and not District Cooling's equipment:
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a0 Between 8:00 a.m. and 330 p.m. on Monday through Friday (excluding holidays observed by Dishict
41 Energy): $85.00/hour
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Damage to district cooling system equipment:
Actual cost of repair or replacement as determined by District Cooling plus service chazge of $50.00.
All other times: $125.00/hour
Charge for chilled water flow eaceeding 110 gallons per ton-hour during June, July, August, or
September billing period: $0.60 per thousand gallons above 103 gallons per ton-hour.
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Credit for chilled water flow below 75 gallons per ton-hour during June, July, August or September
billing period: ($0.60) per thousand gallons below 103 gallons per ton-hour.
Section 3.
This ordinance sha11 take effect and be in force thirry (30) days following its
passage, approval and publication.
Q:�Dist. Heat & Cooling Franchises\distria cooling ord - 12-5-07.doc
Appendix K, District Cooling Franchise Agreement, Page 14 of 14
�7"��
P14�1.1S�
J0.N � 11�OB
Yeas Nays Absent
Benanav i /
Bostrom �
Hazris ,,
Helgen �
Lantry ,/
Montgomery v
Thune ,/
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Adopted by Council: Date �a//���^/�/�7
Adoption Certified by Council Secretary
BY� �/ry� _ �. o
Approved by L �: Date �L /
By:
Requested by Department o£
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Form Approved by City Attorney
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Approved by Mayor for Submission to Council
By:
PU�LISHE�
JAN 21 200H
Q:�Dist. Heat & Cooling Franchises\disirict cooling ord - 12-5-07.doc
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
D�- /lt�9
FS — Fi�ancial Services
ContaM Person & Phone:
Matt Smith
266$796
Must Be on Couneil Aaen
Doa Type: ORDINANCE
E-Document Required: Y
DocumentConWCt: RacquelNaylor
ConWct Phone: 266-8573
14NOV-07
�►
Assign
Number
For
Routing
Order
Green Sheet NO: 3046332
0 inanciai Services
I inancial Services De artment Director
2 ' At[orne __��
3 ouucil
A ' Clerk
5
ToW I# of Signature Pages _(Clip All Locations for Signature)
Action Requested:
Granting the Disffic[ Cooling Franchise for a period of 20 years ending in 2027.
Planning Commission
CIB Committee
Civil Service Commission
7. Has this person/firm ever worked under a contract for this department?
Yes No
2. Has this person/firm ever been a city employee?
Yes No
3. Does lhis personlfirm possess a skilt not normally possessed by any
current ciry employee?
Yes No
Explain all yes answers on separate sheef and attach to greert sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
AdvanWges If Approved:
Disadvantages If Approved:
Disadvantages If Not Approved:
Transaction:
Funding Source:
Financial Infortnation:
(F�cplain)
ActiviTy Number.
CostlRevenue Budgeted:
November 14, 2007 17:46 AM Page 1
Counci{File# ��J/
Green Sheet # ,5� �3 3Z-
Presented by
ORDINANCE �
CITY OF SAINT PAUL, MINNESOTA
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ordinance granting the District Cooling Franchise, held by the
Cooling St. Paul, Inc. for a Period of Twenty Years, Ending in 2027
Mrer�
OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1.
That the Saint Paul
Code be amended by repealing Appendix K.
Section 2.
That the Saint Paul Legislative
Appendix K to read as follows:
APPENDIX K. DISTRICT COOLING
be amended by adding thereto a new
Cross reference(s)--General franchise requirements, Charter
Section 1. Franchise granted.
COOLING ST. PAUL, INC.
16.
District Cooling St. Paul, Inc., (f/Wa District Energy Services, IncJ a nonprofit Min sota col hereinafter
referred to as "District Cooling," is hereby granted a franchise to use and occupy the st ets and other public
property within the City of Saint Pau] for the purpose of constructing, maintaining and op ating a system of
pipes, subways and manholes with al] other necessary appurtenances only for carrying on a' trict cooling system
providing thermal energy to customers within said city and for provision of a fiber optic netwo for Disffict
Cooling and govemmental use by the City of Saint Paul, the State of Minnesota, the County of Ra sey, and by
other govemment entities as may hereafter be approved by city council resolution. Said franchise m not be sold,
transferred, assigned, pledged, mortgaged or in any way disposed of or encumbered without the consen of the
city except as provided in Section 16.
Section 2. Definitions.
For the purpose of this chapter the following terms, phrases, wards and their derivations shall have the meaning
given herein. When not inconsistent with the context, words used in the present tense include the future, words in
the plural number include the singular number, and words in the singular number include the plural number. The
words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common
and ordinary meaning.
A. Capitalization cost shall mean the tota] cost incurred by District Cooling for the tangible asseu of
the district cooling system, exclusive of intangible assets such as goodwill or value of the
franchise; provided that capitalization cost shall in no event be Iess than the amount required to
p7-l/D 9
Appendix K, Disvict Cooling Franchise Agreement, Page 2 of 14
1 fully pay and discharge all debts of the company incurred in connection with the district cooling
2 system.
B. Ciry shal] mean the City of Saint Paul, Minnesota, a home-ru]e municipal corporation.
e C. Distribution facilities shall mean all District Cooling piping, tunnels, conduits, vaults, chambers,
7 cable or any other appurtenance or structure located in the streets and necessary or used for the
8 delivery of thermal energy or a fiber optic network for govemment use.
�o � District cooling service agreement shall mean the standard form of the uniform contract for
t 1 � service entered into by District Cooling and its customers.
12 \
�3 E. �.�istrict cooling system or system shall mean the distribution facilities together with the chillers,
14 cb.oling towers, pumps, and other District Cooling equipment used to provide chilled water.
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16 F. Dist�: energy services, District Cooling or company shall mean District Cooling St. Paul, Inc., a
17 subsidia . of District Heating Development Company, d.b.a. District Energy Saint Paul, Inc.,
�8 District C Qling's subsidiaries, successors and assigns.
19 ��,
20 G. District Ener2
zt mean DisYrict
22 subsidiaries,:
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Paul, Inc., Dismict Energy or Dish-ict Heating Development Company shall
Development Compa�y, d.b.a District Energy Saint Paul, Inc., its
rs and assigns, excluding District Cooling.
z4 H. Financial services dire�'ctor shal] mean the director of the office of financial services for the City
25 of Saint Paul or his or her'�designee, or any successor to his or her functions.
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27 I. Gross earnings shall mean al� ums received or receivable by the company in demand and energy
28 charges from the sale of therma nergy to customers of District Cooling and all sums collected
29 by District Cooling for routine ma tenance or use of the fiber optic network serving the State of
3o Minnesota, the County of Ramsey, other government entities as approved by the City. For
31 purposes of this franchise and the distn heating franchise, District Energy shall not be deemed a
32 customer of Disfict Cooling nor shali Dis ict Cooling be deemed a customer of District Energy.
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34 J. Public works director shall mean the director o the department of public works for the City of
35 Saint Paul or his or her designee, or any successo to his or her functions.
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37 K. Street shall mean the surface, and the spaces above an elow, any public street, boulevazd, road,
38 highway, freeway, lane, a]]ey, court, sidewalk, parkway, 'ver, skyway or skyway bridge, or any
39 other public place or area under control of the city, now or A�reafrer existing.
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42 Section 3. Application and service of notice.
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4a The department of finance and management services of the City of Saint Paul is the depa�hnent that is primarily
45 responsible for the city's administration of this franchise. Except as otherwise specifically'provided herein, any
a6 applications and notices required or permitted to be given under this ordinance shall be dee�d proper]y given
a7 when deposited with the lJnited States Postal Service, postage paid, addressed to the party to r'eGeive same at the
48 address set forth below, or at such other address of which the party to receive the notice shall ha destgnated in
49 the franchise. The finance director shall develop all forms necessary to administer this chapter.
50
5� Notices to the city shall be addressed to the following:
52
53 Director of Financial Services
s4 Room 700 City Hall
55 15 West Kellogg Boulevazd
56 St. Paul, MN SSlQ2
Q\DisL Heat & Cooling Franchises\Final IO-15 disvict cooling ord - District Cooling Revision.doc
b?� ft0°I
Appendix K, District Cooling Franchise Agreeme�t, Page 3 of ]4
t Notices to District Cooling shall be addressed to the following:
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President
District Cooling St. Paul, Inc.
76 West Kellogg Boulevard
St. Paul, MN 55102-1611
Term of franchise.
This franchist
effective date
Section 5.
be in full force and effect for a term and period of twenty (20) years, beginning on the
�ordinance.
franchise.
This franchise for the ope3ation of a district cooling system shal] be a nonexclusive franchise. The franchise
granted shall be subject to t� limitations imposed by this ordinance and reasonable regulation designed to protect
the health, safery and welfare`qf the populace. District Cooling must specify to the public works director the
locations of all facilities placed�n the streets and shall strive to notify the public works director not less than
ninety (90) days prior to any addk�o�s to these facilities. District Cooling may reGuest that any information
provided pursuant to this franchise`be deemed nonpublic data as defined in Minnesota Statutes 1337 et seq., and
the city shall treat the information as�ionpublic in accordance with the terms of that statute and any other
applicab]e ordinances, rules or regulattons.
Section 6. Interpretation.
Unless otherwise specifically prescribed herein,V,he following provisions shaH govern the interpretation and
construction of the franchise granted under this o'r2�nance:
A. District Cooling shall not be relieved 8,f its obligation to promptly comply with any provision of
this franchise by any failure of the city t enforce prompt compliance with the same or any other
provision.
B. Any right or power conferred or duly imposed n any officer, employee, deparhnent, or boazd
of the city is subject to transfer by operation of la to any other officer, employee, department or
board of the city.
�
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Unless otherwise directly or indirectly provided herein, thi franchise shall not relieve District
Cooling of any requirement of the city Charter or provision�bf the Legislative or Administrative
codes of the city. �'�,
The granting of this franchise or any of the provisions contained heT�in shall not be construed to
prevent the city from granting a similar franchise to any other personl�r corporation.
E. This franchise is granted pursuant to applicable state and federal law and Histrict Cooling shall at
all times comply with all app]icable present and future laws, rules and regul ions By acceptance
of this franchise District Cooling does not waive its rights under such laws, ru s and regulations.
Furthermore, District Cooling shall obtain all necessary permits, franchises and thoriTy required
pursuant to city, state and federa] ru]es, regulations and laws.
Section 7. Limitations upon franchise.
A. No privilege or exemption is granted or conferred by this franchise except those
Q:\Dist. Heat & Cooling Franchises\Final 10-i5 district cooling ord - Disa�ict Cooling Revision.doc
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Appendix K, Disvict Cooling Franchise Agreement, Page 4 of 14
1 prescribed herein.
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Any privilege claimed under this franchise by District Cooling in any street shal] be subordinate
to any prior recorded easement.
reserved to city.
9 The city reserves every right and power which is required to be reserved by any provision of the ciry Charter or
� o any statute, rule or reg,ulation. Except as otherwise provided herein, neither the granting of this franchise nor any
t i provisions thereof shall�.constitute a waiver or bar to the exercise of any govemmenta] right or power of the ciry.
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14 Section 9. Duties and responsibilities.
15 �
16 The finance director, or his or he? daly authorized representative, is the principal city official responsible for the
I� administration of this franchise, ani�,�a questions regarding interpretation or application ofthis franchise shall be
I8 raised initially with that designated ort�cial.
19 �
2o Failure or refusal by the finance director to�respond to any question other than questions related to Section 23
zt herein within thirty (30) days of the date hehhe receives it in written form, or District Cooling's receipt of a
22 written response from the finance director to ar�y question submitted in written form, shall be deemed exhaustion
23 by District Cooling of its administrative remedies�under this ordinance.
24
25
26 Section l0. Technicai standards.
z7
28 The franchise granted herein sha11 extend to the constructio� operation and maintenance of the district cooling
29 system by District Cooling in the City of Saint Paul and the fi r optic network installed for District Cooling and
3o governmental use.
31
32 District Cooling shall perform al] work and make a]] installarions in c nfom
33 established by the public works director, which standards shall be cons tent
34 similar work by other par[ies. District Cooling shall, prior to commencem n
35 public streets or other public proper[y within the City of Saint Paul, file wit}
36 routing map showing tUe placement of all facilities and other details of such
37 completion of canstruction District Cooling shall provide the public works c
38 drawings.
34
iTy with the standazds for installation
with those administered for all
of any construction or usage of the
the public works director a detailed
�struction or usage. Upon
irecior with a set of "as built"
4o District Cooling, in the installation, maintenance and operation of its disYribution faci]iiies, shal] be subject to such
41 reasonable regulations as may lawfulty be provided by the city, and no equipment shall be installed or laid by
42 District Cooling within the streets, except upon application to the public works director o�other persons
a3 designated by the ciry council, and afrer written permission is granted by said director or person. District Cooling
aa and the city shall make reasonable good faith efforts to advise each other of plans and programs, both long and
a5 short range, for the construction of improvements and facilities in public streets and other public.properiy which
a6 might affect the other parry or require its coordinatSon. District Cooling shal] not excavate or makainstallation in
a7 any public way without having obtained a permit to do so as required by Chapter 125 of the Sai�t P] Legislative
48 Code, and shall give the public warks director at least forty-eight (48) hours' notice prior to any excav ion or
49 installation that requires a permit except in cases of emergency. �
50
5]
52
53
sa
55
56
Section 11. Rates and regulation.
With respect to the setting of rates charged to customers the following shall apply:
A. All rates made, demanded or received by District Cooling shall be just and reasonable. Rates shall
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Appendiz K, District Cooling Franchise Agreement, Page 5 of l4
� not be unreasonably preferential, unreasonably prejudicial or discriminatory, but shall be
Z sufficient, equitable and consistent in application to each class of customers. Rates shall generate
3�� sufficient revenue to a]low District Cooling to recover its reasonab]e operating cost and expenses;
4� to provide for the timely and orderly payment of costs and expenses; to provide for the timely and
5 orderly retirement of debt inc]uding, but not ]imited to, the bonds issued by the HRA and other
b public issuers and the HRA subordinate loans issued for financing the system; to provide
7 coverage on such bonds and the debt service on HRA subordinate loans; and to provide for
8 improvements, enlazgements and extensions necessary to adequately service the territory of the
9 city, including the principal and interest to become due on obligations issued or to be issued.
lo
i i B. The rates contained in Schedule A, attached to this ordinance incorporated herein by reference,
�2 hall remain in force unti] amended or changed.
13
�4 C. Dist 'ct Cooling shall not directly or indirectly chazge, demand, collect or receive from any
l5 custom r or person a greater or less compensation for any service rendered or to be rendered by it
16 than that escribed in Schedule A; nor shall any person knowingly receive or accept any service
i� from Distr'�ct�Cooling for a compensation greater or less than that prescribed in Schedule A.
I8 District Coolirrg shall not, as to rates or service, make or grant any unreasonable preference ox
i9 advantage to an�person or subject any person to any unreasonable prejudice or disadvantage.
2o Nothing contained�' this ordinance shall be construed to impair the tax-exempt status of bonds
2� issued to £nance the stem. "Service," as used herein, does not include customer connection
22 charges or other schedu e of charges for specific services to individual customers.
23 �
z4 D. District Cooling shall keep��d render its books, accounts, papers and records accurately and
25 faithfully in the manner and f�prescribed by the city, and shall comply with al] directions of
26 the city relating to these books, ccounts, papers and records, including furnishing of such
z7 information or compilations and ermitting an audit of the books, accounts, papers and xecords, as
28 may be requested by the city. Such�ooks, accounts, papers and records shall include a detailed
z9 tracking of all expenses directly related to the operation of the system and any other subsidiary
30 operations of District Cooling or Distr'i Energy, and an allocation of those expenses by business
31 and customer classes. ��
32
33 E. Afrer thirry (30) days' notice to the city, Distt�Ct Cooling may file pursuant to Section 23 a new or
34 amended Schedule A, containing new or amend,ed rates, fees andfor charges, together with rules
35 and regulations not inconsistent with the district�ooling service agreement. Such changes are
36 jurisdictional to changes in Schedule A. Such newbr amended rates shall be effective and may be
3� charged on the tenth day after the filing of the new on,amended Schedule A in the office of the
38 city clerk, and shall continue in effect unti] approved ok by the city council by resolution,
39 or unti] deemed approved pursuant to Section 23. `y
40 '\
�� F. The proposed changes shal] be approved by a city counci] re�s9�lution if they are just, reasonable
a2 and nondiscriminatory. The city shall be required to take into a�oount the requirements of
43 subsection 1]A above in reviewing the proposed new or amended Schedule A. The city shall also
Aa be required to take into account the operation of the terms and con��ions of the district cooling
45 service agreement, including Articles VI, VII and XXI thereof, which�`is the uniform contract
a6 entered into by District Cooling and its customers providing for a detail�d method of charges for
47 demand and energy related costs. The district cooling service agreement sha11 be fi]ed in the
48 office of the city clerk at the same time as the written acceptance required by�.ection 26 herein.
49 Amendments to the district cooling service agreement shall be filed with the ci lerk at least
5o thirty (30) days prior to the effective date of such an amendment or amendments; p vided,
51 however, that no amendment to Articles VI, ViI and XXI of said agreement shall be ' ective
52 unless and unti] approved by a city council by resolution. Any amendment to other sect' ns of
53 the district cooling service agreement shall be effective thirty (30) days after filing in the afisence
54 of a resolution by the city council disapproving such amendment. �
55
56 G. Proposed changes to Schedule A shall by city counci] resolution be approved, approved in part if
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t severable, or denied, and cannot be modified or amended. The city shall require District Cooling
� to refund or credit to its customers any increases in rates which are in excess of the ]awful and
3\ reasonable rates as finally determined.
6 Secl�ion 12. Regulatoty effort--Staffing and process.
7
8 For the urpose of assisting the city in the regulation of the activities and rates of District Cooling as provided in
9 this franchise, the finance director shall provide sufficient staff resources for the regulatory effort and the city
I o attomey shaR�appoint an assistant ciry attorney or other attorney to perform the legal work that such regulation
�i necessitates. ��
I2 \
13 District Cooling sha��ay the city during the term hereof an annual regulatory fee equivalent to the annual
�a regulatory fee paid by I9istrict Heating Development Company, d.b.a. District Energy St. Paul, Inc., pursuant to
]5 the franchise granted said�mpany, This fee shall be payable annually on July 1, beginning July 1, 2008, and
t 6 shal l be used solely to pay e, cost of regulation, which is not limited to but may include that paR of the salary
t7 and expenses of the individual�appointed by the finance director and the city attomey, their assistant or assistants,
I8 clerical help and office expenses�, outside accountants, attomeys, advisors and consultants' fees reasonab]y related
�9 to the regulation of District Coolin�, its rate schedules, and other matters and operations under this franchise. The
20 amount of such payment or payments�shall be allowed as an operating expense of District Cooling in the City of
2� Saint Paul. Such sum shall be adjusted ach yeaz by a dollar amount expressed in percentages equal to the
z2
23
24
25
26
27
28
percentage increase or decrease in the U. All-Cities Consumer Price Index for All Urban Consumers (or its
successor index) for the latest twelve-mont period, the adjustments to be cumulative and based on the amount of
the latest adjustment plus the previous year's Rayment.
Section 13. Reports to be filed.
29 District Cooling shall file not later than the twenty-SftA
3o the number of customers, sa3es and revenues by classes
31 operations within the City of Saint Paul.
32
of each month with the finance director, a report of
;rvice for the preceding month based upon its utiliTy
33 District Cooling shall also file with Che finance direcCOr, withir�Yhree (3) months after October 1 ofeach year, in a
34 format to be approved by the finance director, an audited financ�l statement and any other information requested
35 by the finance director, covering the utility operations within the �C`'i,ty of Saint Pau] for the preceding year,
36 including all revenues, expenses and plant investment, together with�such breakdown and analysis of operating
3� statements as the said person may request. The city shall have the righ�o require additional information
38 conceming operations under this ordinance from time to time in such fori� as may be prescribed.
39
ao
41
4z
43
aa
The city sha11 have the right, at all reasonable times and upon reasonable notiZse, to examine the books of accounts,
records, vouchers, disbursements, rates, revenues, contracts, purchases, sales an other transactions bearing on
and relevant to the rates District Cooling chazgas and the service it provides to its stomers in the City of Saint
Paul.
The provisions of this Section 13 are subject to Yhe regulations of the last se�tence in S�ction 5 hereof.
45
46
a7 Section l4. Relocation.
48
a9 In (ocating its distribution facilities, District Cooling shall in no way unreasonably interfere with th safety and
5o convenience of ordinary travel along and over the streets nor interfere with other uses to which such aces are put
5� by the City of Saint Paul, any of its redevelopment agencies, the Housing and Redevelopment Authori HRA} of
52 the City of Saint Paul, or the Saint Paul Port Authority (Port Authority) and the Board of Water Commisst ners of
53 the Ciry of Saint Paul. In the event it shal] become necessary during the term of this franchise to remove or
54 relocate the physica] property of District Cooling located within or upon any of the streets or public proper[y i
55 the city because of such interference or use required by the city, HRA or Port Authority or as a result of any
56 public improvement undertaken by the city, HRA or Port Authority, District Cooling shall, when so advised by
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�1 the city council, remove and relocate said distribution facilities without delay and without cost to the city, HRA or
2\ Port Authority and shall place streeu or public property in the same condition as they were prior to said removal
3''. or relocation. However, after District Cooling has so relocated its distribution faci]ities, District Cooling sha11 not
a within ten (10) years thereafter be required at its owners expense to make any further relocation ofthe same
5 distribution facilities if at the time of the first relocation the city had actual notice or knowledge of the subsequent
6 publi�c improvement project The city shall strive to give the District Cooling at least one hundred eighry (180)
� days' prior notice of plans for improvements which may require relocation by District Cooling. In the event that
8 District Cooling is required to remove its distribution facilities at the request of the city, the city shall cooperate
9 with Distiict Cooling in order to identify an slternative location for the relocation of the facilities.
lo
t � Except where �e�quired for a public improvement pro}ect, the vacation of any street or public property, afrer the
iz installation of District Cooling distribution facilities, shall not operate to deprive District Cooling of its rights to
U operate and maintain�such distribution facilities until the reasonable cost of relocating the same and the loss and
�a expense resulting frorn,such relocation are first paid to District Cooling by the private property owner.
15 �
16 In an emergency, as determined by the ciTy, when District Cooling or its representative is unavailable and/or
�� unable to provide the necessary immediate repairs to a damaged or malfunctioning installation by District
I8 Coo{ing, or to any faults or se�led or sunken areas that may develop in any area over, azound or adjacent to the
t9 installation of District Cooling; khe city, when apprised of such an emergency, shall have the right to make the
2o necessary repairs with the total cost of same being charged to District Cooling. The city must attempt to contact
21 District Cooling at its offices prior �p commencement of any emergency repairs.
22 \
23 `
24 SecCion 15. Fees. �\
z5
26 During ffie terrn of the franchise District Cooling shall pay the city an annual franchise fee in the amount of 3.4
27 percent of District Cooling's annual gross eamrngs. Said payments shall be made in monthly installments. The
28 payment shal] be due on or before the twenty-fi calendar day of the succeeding month. The payment obligation
29 shall be met if the payment is mailed and postmar ed on or before the due date. In no event shal] District Cooling
30 be required to pay a franchise fee in excess of the ount which it can legally collect from its customers in the
3� city by means of a surcharge on its rate schedule far tRe purpose of collecting the franchise fee.
32 �
33 �
34 Section 16. Assignment.
35
36 The rights granted District Cooling by this franchise inure to the nefit of District Cooling, and any parent,
37 subsidiary, affiliated or successor entity now or hereafrer existing. e rights shal] not be assignable without the
38 express written consent of the city council, except District Cooling ma assign its rights under this ordinance to
39 District Heating Development Company, d.b.a. District Energy St. Paul, c., without such consent, so long as
ao such assignee assumes all of the obligations of the franchise and is bound t�the same extent as District Cooling.
4i Such consent shall not be arbitrarily, capriciously or unreasonably withheld, d,elayed or conditioned. Any required
4z consent is to be evidenced by an ordinance of the ciry council that fully recites Eh\terms and conditions, if any,
43 upon which consent is given.
44 ��
45 Notwithstanding the foregoing, the city hereby consents to the assignment of District'Cooling's rights under this
46 ordinance to the trustee for bonds issued by the Housing and Redevelopment Authority f the City of Saint Paul,
4� Minnesota (the "HRA") or to any other public issuer to finance the district cooling system, such assignment being
48 for the purpose of securing District Cooling's obligation to repay the ]oan from the HRA to istrict Cooling of the
49 proceeds of such bonds. The ciTy further consents to any amendment ar supplement to the sec ity instrument
so providing for such assignment if executed and delivered in connection with bonds issued in the �ture by the HRA
5 t or any other public issuer to provide financing for the district cooling system. In the event such tr�tee forecloses
52 upon or enforces such security interest, the ciry shall recognize the righu of such trustee as a success�r to District
53 Cooling under this ordinance without any further consent from the city. The consent of the city furthe extends to
5a the assignment to a bank, insurance company or other entity providing credit enhancement for the bond issued by
55 the HRA or any other public issuer if such credit enhancer becomes a co-mortgagee or co-secured party w h the
5e bond trustee. The city further consents to the assignment to the HRA of District Cooling's rights under this�
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t ordinance to secure repayment of a loan (separate and apart from the loan of bond proceeds) made to District
2 Coo]ing by the HRA to finance the district coo]ing system, and the city similazly agrees that if the HRA forecloses
� upon its security interest in the ordinance, the city will recognize the HRA as the successor to District Cooling
4 under this ordinance without any further consent from the city.
7 Secfron 17. Subleasing of Facilities.
8 \
9 District C`�o
to District Coo
t � repairing all
iz
u
ta Section 18.
shall not sublease any part ofthe system to any person or entity not related to or affiliated with
without the consent of the city. District Coo]ing must retain responsibi]ity for servicing and
s of the system if it enters into any sublease.
indemnification and tiability for damages.
t5 \
t6 A. The coc'��any shall indemnify and save the city whole and harmless from any and all claims for
I� injury or damage to persons or property occasioned by or azising out oY'the construction,
18 maintenance„ operation or repair of the system or by the conduct of District Cooling's business in
19 the city whetti'er or not any act or omission complained of is authorized, allowed or prohibited by
zo this franchise. The company shall reimburse the ciTy for all expenses incurred by the city in
21 defending itself, i�s. officers, agents or employees, against any and a]] claims for damages or
22 penalties. These ex�3enses shall include, but not be limited to, attorney fees, expert witness fees
23 and court costs and sHal] also include the reasonable value of any services rendered by any
24 officers or employees of city.
z5
26 B. The city shall not and does'pot by reason of the granting of this franchise assume any liability of
27 District Cooling whatsoever for injury to persons, damage to property, loss of services, damage
28 claims by users, or other penalYSes. The foregoing does not indemnify the city for its own
z9 negligence except for claims arislag out of or alleging the city's negligence where such negligence
3o arises out of or is primari]y related t the construction, operation, maintenance or repair of said
31 system, including, but not limited to��'e�ssuance of permits and inspection of plans or work. This
32 section is not, as to third parties, a waivir of and defense or immuniTy otherwise available to
33 District Cooling or the city; and District G oling, in defending any action on behalf of the city,
34 shall be entitled to assert in any action eve efense or immunity that the city would be able to
35 assert on its own beha{f.
36
37
38
39
40
4l
42
43
44
C. District Cooling agrees that it will not bring, nor ca�tse to be brought, any action, suit ox other
proceeding claiming damages, or seeking any other r ief against the city, its officials, officers,
boazds, commissions, employees or agents, for any othe award of a franchise made in conformity
with applicable ]ocal, state or federal law.
Section 19. LiabiliTy insurance.
45 A. Dishict Cooling shall purchase and maintain such insurance as will p`yotect District Cooling and
46 subcontractors from claims set forth below which may arise out of or r�sult from District Cooling
4� operations under this ordinance, whether such operations be by District C�ooling or by any
aa subcontractor or by anyone directly employed by them, or by anyone for w�sose acts any one of
49 them may be liable. District Cooling may self-insure any or all of the followir� if authorized by
50 the commissioner of the Department of Commerce of the State of Minnesota. \
5t
sz B. District Cooling shall obtain the following and submit certificates of insurance to the�nance
53 director in amounts to be determined by him or her; provided, that while any loan agre� ent
54 between District Cooling and the Housing and Redevelopment Authority of the Ciry of Saint Paul
55 remains in effect, required insurance amounts shall be as provided in such agreement: ��
56 \
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Appendix K, Disirict Cooling Franchise Agreemeni, Page 9 of 14
i I. Workers' compensation and employers' liability insurance.
2
3 2. General liability insurance.
5 3. Automobile liability insurance.
6
7 C. All certificates of insurance shall provide that the insurance company give the city through its
8, finance director thirty (30) days' prior written notice of cancellation, nonrenewal, or any material
9 changes in the policy, and shall name the city as an additional insured.
to
t t � D. The above pazagraphs establish minimum insurance requirements and it is the sole responsibility
iz �� of District Cooling to purchase and maintain additional insurance that may be necessary.
13
ta E. a ^� District Cooling shall not commence construction of the initial distribution facilities until it has
15 �"n�obtained the required insurance and filed an acceptable certificate of insurance with the finance
t6 director.
�
17 �
18 F. Nothir'�g in this franchise shall constitute a waiver by the city of any statutory limits or exceptions
19 on liabilit�v
z0
21 G. District Co 1 r��'s failure to procure or maintain required insurance shall constitute a material
2z breach of this franchise and shall also, at the city's discretion, allow the city to procure or renew
23 such insurance to • otect the city's interests and pay any and all premiums in connection therewith
24 and recover all mom s so paid from District Cooling.
25
26
z7 Section 20. Future uses.
28
29 The city reserves the right, subject to further co itioos described in this section, to lay and permit to be laid
3o sewer, gas, water, and other pipelines or cables an conduits, and to do and permit to be done any underground
3 i and overhead installation or improvement that may He deemed necessary or proper by the governing body of the
32 city in, across, along, over or under any streets occup�d by District Cooling and to change any curb or sidewalk
33 or the grade of any street. The foregoing right is subject��the condition that if the laying of such pipelines or
3a cables or conduits or the doing of any said installation or i provement is on behalf of or for an entity other than
35 the city, such ]aying of pipelines or cab]es or conduits or doi of any said installation or improvemeni shall not
36 interfere with District Cooling's existing distribution facilities a d said entity or entities shall be required by the
37 city to compensate District Cooling for any damage so caused; pr vided, however, that in permitting such work to
38 be done by said other entity or entities, the ciry shall not be liable f any damage so caused; further provided,
39 however, that nothing in this section or elsewhere in this franchise sh I relieve the city of ]iability for any
ao damages it causes to District Cooling's distribution facilities by reason of�the city's, or its contractor's, work in
41 laying pipelines or cables or conduits or doing of any installation or improV�ement described above.
4 z \ 43
44
45
a6
47
a8
49
50
5t
52
53
54
55
56
Section 21. Termination and forfeiture.
A. In addition to all other rights and power retained by the city in this
right to terminate this franchise and all rights and privileges of this
material breach by District Cooling of its terms and conditions. A t
Cooling shall mean one or more of the following:
Violation ofany material provision ofthis franchise;
2. Disposing of any of the facilities or property of its system with the intent solety�to
prevent the city from pwchasing it as provided for herein; �
Material intentional misrepresentation of fact in an application pursuant to Section 2S� or
, the city reserves the
in the event of a
each by District
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2 j 4. Failure to maintain necessary insurance.
3�
4\ B. The foregoing shal] not constitute a material breach if the violation occurs but it is without fau]t
s � of District Coo]ing or occurs as a result of circumstances beyond District Cooling' reasonable
6 � control. Circumstances beyond the control of District Cooling shall include, but not be limited to,
7 � acts of God; strikes, lockouts or other labor disturbances; unavailability of labor or materials;
8 failure of other utilities to perform walkout and make ready and to locate underground utilities in
9 `t� a timely manner, orders or restraints of any kind of the government of the United States or the
10 �! State of Minnesota or their respective departments, agencies or officials or any civil or military
�� �`, authority; insurrections, riou; ]andslides earthquakes, fires, storms, droughts, floods; explosions;
12 .. breakage or accident to machinery, pipes or lines; or any other extraordinary cause or event not
t3 'r,easonably within the control of District Cooling and not proximately caused by its negligence.
14 District Cooling shall not be excused by mere economic hardship, nor by malfeasance or
15 misfeasance of its directors, officers or employees.
16
1� C. Disuict Cooling shall be given written notice by the ciry of any materia] breach of this ordinance
18 and shall have thirty (30) days from receipt of such notice to remedy any failure constituting s�ch
19 a breach.
20
2� D. [f, upon expiratiorimof the thirty-day period referred to in paragraph C above, District Cooling
22 shall not have remedied the breach, the city may seek to terminate this franchise; in such case, the
23 city shall fite an application for termination of the franchise in awordance with Section 23 hereof.
24
25 E. Upon receipt of the city coulacil's approval or denial of the application to terminate the franchise
26 pursuant to Seotion23, Distric�Cooling shall have ninety (90) days within which to serve upon
2� the city an appeal of the city coCta�cil's decision to District Court. Service of process of such appeal
28 on the city shall be made upon tha,city clerk and the finance director.
29 j
�
3o F. During the pendency of said applicatiQn and the appea] provided for in paragraph E hereof, the
3t rights and obligations of the city and District Cooling hereunder shall continue in fu11 force and
3z effect.
33 '•
34
35 Section 22. Abandonment of service and removal of eqoi�
36 SorSeiture.
37
38 If District Cooling abandons its distribution facilities or any po�
39 the city. "Abandon," as used herein, shall mean to remove from
40 or more.
41
upon abandonment, termination or
ceof, it shall give prompt wrltten nofice to
and refrain from using for three (3) years
42 A. Upon abandonment or upon termination or forfeiture of th�franchise, District Cooling shall
a3 remove the piping conduits, wires and appliances from the stk ets, alleys and other public places
a4 within the city to which such abandonment or termination or �feiture applies if the city so
45 requests in wriTing. District Cooling shall restore the area accorc�ine to the standard speciScations
46 ofthe public works director. �l
47
4s B. Should District Cooling fail to remove the aforementioned equipment requested by the city, the
a9 city shall have the right to make such removal at the expense of District ooling.
50
51
5z Section 23. Renewal or modification of franchise or change in Schedule A.
53
5a A. Procedure. Following the adoption and acceptance of the franchise and except as �
55 specifically provided herein, all applications by the city or District Cooling for a c
56 modification of the franchise or by District Cooling for a change in the rates, fees
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i provided in Schedule A may be made and processed in accordance with the following procedure:
2�
3\ 1. The city and District Cooling shall work to assure the orderly, timely and cost effective
4 ; process for review of the proposed changes.
5
6 � 2. The pariy seeking such a renewal, modification or change shall file an application with
7 the finance director and the city clerk. The application shall include statements of all
8 materia] facts, opinions and evidence supporting the application. A renewal may involve
9 renegotiation of any term contained in the franchise and consent to a renewal may not be
�o ; unreasonably withheld.
it �
12 �:t� The city c]erk shall place the fact that an application has been made upon the next
t 3 \ available council agenda.
ta �
15 4. '�IY�e city council shall by resolution refer the application to a committee of appropriate
�6 cit}%�staff. Within sixty (60) days after such refettal, staff shall review the application,
t7 giving�due consideration to the provisions of Section 1 l F and other provisions of this
�8 franchise�ordinance, and shall request in writing any clarifying or supplementary
t9 informatio't�needed from the party making the application. The party making the
2o application s�all respond within fourteen (14) days afrer receiving said request. Within
zt seven {7) days�fter such response, staff shall notify such party in writing whether the
22 information proJ�ded is sufficient. Following a notice of insnfficient information, the
23 applying party sha'u have seven (7) days to file rebuttal material.
24 �\
25 5. Not more than ninety �.40) days afrer referral to committee, staff shall have completed its
z6 review and provided the�council with a written evaluation. Upon staff request, the
27 committee chair may at his� r her discretion extend staffs reporting deadline by no more
z8 tha� fourteen (14) days. �
29
30 6. No later than thirty (30) days
31 committee, giving due consic
32 provisions of this franchise o
33 for consideration at the next :
said staff report has been filed with the committee, the
n to the provisions of Section 11 F and other
a�, shall make a recommendation to the full council
a1e21�council meeting.
34 �
35 7. The council, giving due consideration to tRe provisions of Section 11 F and other
36 provisions of this franchise ordinance, shall� prove or deny the application within one
37 hundred eighty (180) days of the filing of said�pplication. Such 180-day period may be
38 extended by mutual agreement of District Coolin� and the city. Should an extension be
39 agreed upon, the chair of the committee considerin the application may adjust the
4o committee and stafFs timetable accordingly. Howeve �whatever the extension may be,
41 tha committee shall refer the applicarion back to the co�nci] at least thirty (30) days
a2 before the fina] day for approval or denial. If no action is�ken by the ciry counci] on an
a3 application fiied by District Cooling within one hundred eig�ity (1 SO) days of fi]ing, the
a4 application is deemed approved. �
as
46 Before this ordinance or any amendments thereto by ordinance
4� the council, a public hearing shall be held upon ten (]0) days' F
48 officia] newspaper. District Cooling shall bear the costs of pub
49 ordinance or any amendments thereto.
be finally adopted by
ied notice in the
�.of the franchise
50
5t B. Contested case hearing. At the request of District Cooling and in order to assist in termining
5z whether the proposed changes in Schedule A sha11 be approved or denied, the city ma require a
53 public heazing before a hearing examiner who shall be selected by mutua] agreement o ity and
54 District Cooling within ten (10) days of District Cooling's request. The hearing examiner all
55 hold a hearing as a contested case and make recommendations to the city. Upon receipt of s h
56 recommendations, the ciry shall by resolution approve or deny the proposed changes in Sche IF
Q:\Dist Heat & Cooling Franchises\Final 10-IS district cooling ord - District Cooling Revision.doc
o � -l/d9
Appendix K, District Cooling Franchise Agreement, Page 12 of 14
1 A within 180 days of the filing of District Cooling's application. If no such acrion is taken by the
2 city within 180 days of the filing of District Cooling's application or thirry (30) days after receipt
3 of the hearing examiner s recommendations, whichever is greater, such proposed changes are
deemed approved.
5
6 In the event a contested case hearing is requested pursuant to this section, District Cooling shall
7 � reimburse the city for espenses incurred as a result of that process, including all hearing examiner
S � costs, plus other directly related costs, such as city staff, expeft witnesses, or consultants fees, up
9 't, to a ma�cimum of ten thousand dollars ($10,000.00) for such directly related costs. The cost of any
10 � city staff time shall be computed at the employee's rate of pay plus fringe benefits per hour of
� t �.` time spent working on the contested case.
12
t; C. 'District Cooling franchise expenses. All District Cooling costs related to or incuned in connection
14 with the provisions of this franchise shall be allowed as operating expenses.
IS
16
]7 Section 24. Police
IS
19 In accepting this franchise, C
20 exercise of the police power
21 welfare of the public.
zz
23
24 Section 25. Severability.
25
Cooling acknowledges that its rights hereunder are subject to the lawful
city to adopt and enforce general ordinances necessary to the safety and
26 If any section, subsection, sentence, clause,'�hrase or portion of this ordinance is for any reason held invalid or
2� unconstitutional by any court or administratiJA agency of competent jurisdiction, such portion shal] be deemed a
28 separate, distinct and independent provision an�uch holding shall not affect the validity of the remaining
29 portionsthereo£ �\
30
31
3z Section 26. Acceptance of franchise.
33
34 District Cooling sha11, within thirty (30) days after the passag and approval of this franchise ordinance, file with
35 the city clerk its written acceptance in a form to be approved by he city attorney and shall agree to abide by, keep
36 and perform all the terms, limitations, conditions and provisions o this ordinance.
37
38
39
40
41
42
43
Section 3.
This ordinance shall take effect and be in force thirty
passage, approval and publication.
following its
Q�\Dist. Heat & Cooling Franch�ses\Final 10-15 districi cooling ord - District Cooiing Revisioadoc
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DISTRICT
COOLING
ST. PAUL
August 29, 2007
Honorable Christopher B. Coleman
Mayor, City of Saint Paul
390 City Hall
15 West Kellogg Boulevard
Saint Paul, MN 55102
D7-1I09
AF�
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�FRK
NEW FRANCHISE APPLICATION
Re: Franchise Application for District Cooling St. Paul, Inc.
Appendix K
Ordinance No. 17816, adopted March 28, 1991 (the "Franchise")
Deaz Mayor Coleman:
This letter will serve as a formal applicarion to the City of Saint Paul consistent with the
provisions of the Saint Paul Charter to issne a 20-yeaz Franchise to District Bnergy
Services, Inc., now lmown as District Cooling St. Paul, Inc. (hereafter "District
Cooling"). The current District Cooling Franchise is located in Appendix K, derived from
Ordinance No. 17816, adopted Mazch 28, 1991 (the "Franchise").
The Application for a new District Cooling Franchise is a great tribute to the vision of the
City of Saint Paul, the District Cooling customers and all those who have supported this
energy efficient, stable customer charges, environmentally beneficial undertaking.
District Cooling is widely recognized as part of the best district energy system in
America. We are grateful that the City of Saint Paul has been generous in its recognition
and applause for our successes.
The District Cooling Franchise Application includes a draft Franchise and its Schedule A
that is attached hereto and noted as Attachment A. The Franchise would commence on
January 1, 2008 and terminate 20 years later, December 31, 2027. The modifications
from the existing Franchise aze noted in the mazked version of the existing Appendix F
identifying each proposed change, attached hereto and noted as Attachment B. Please
note that the changes, other than term, are miniival and editorial in nature.
Hans O. Nyman
Energy Center
76 Kellogg Bivtl. W.
St Paul, MN 55102-76'11
Tal 85"1297.�„5
Fa�c 657221.0353
wunir_distriMenergy.com
Honorable Christopher B. Coleman
Mayor, City of Saint Paul
August 29, 2007
Page 2
Specifically, the changes from the e�sting Franchise aze:
o�-i��
Conform nonprofit name throughout.
Section .11 Remove 1993 report to the City Council as no longer applicable.
Section.11(a) Clarification
Section .11(c) Conform to existing practice under the franchise.
Section .11(e) Designed to meet the City and Company goals to expedite the
filing process.
Section 11(� The deleted provision relates to City approvai of certain provisions
of the Customer Contract. All contract amendments must be
Section .12
Section .13
Secrion .16
approved by the customers. The deleted provision was designed to
address the early operating years and is inconsistent with the
existiug practices and procedures.
Update of the payment from 1992 to 2008.
Conform to existing practice under the existing franchise.
Clarificarion
Section .22 Delete 1941 negotiated municipal option. The then existing City
uncertainty regarding unknown District Cooling customer
acceptance in the marketplace and the uncertainty of establishing a
successful disriict cooling operation led to this proviso.
Accordingly, this is inapplicable and inappropriate under the
present circumstances.
[Deletion of Section .22 results in renumbering of secrions
therea8er in the proposed Franchise.]
Section .23 Statement of mutual goal to achieve cost effecfiveness in the City
and company review process.
The City and District Cooling have worked together successfuIly for 16 years under the
negotiated Franchise. Our mutual experience and other CiTy formal negotiations strongly
indicate that an expedited process for consideration of a new Franchise is in the best
interest of the City and District Cooling. Accordingly, we have held informal discussions
Honorable Christopher B. Coleman
Mayor, City of Saint Paui
August 29, 2007
Page 3
(>�-//U9
to establish a reasonable time frame, regulatory and administrarion evaluations that
address this mutual goal.
Dishict Cooling respectfully requests that in view of the m;n;ma1 changes proposed to the
existing Franchise the following procedure would prove productive and economical for
the City, District Cooling and its customers:
September 5, 2007
2.
3.
�
�
November 7, 2007
Introduction of the Ordinance consistent with the proposed
2008 Franchise attached hereto.
The City Council would receive a written report from the
City Administration and other interested parties.
On or before
November 14, 2007 District Cooling will respond to the written comments.
November 21, 2007 The Public Hearing on the Ordinance.
November 28, 2007
December 5, 2007
Adoption of the Ordinance.
Publication of the Ordinance.
Adopting such a schedule will wouid enable the Franchise to be adopted in 2007 and be
effecfive as ofJanuary 1, 2008.
We respectfully submit that following the schedule above will assure that all of the
interested parties will have an ample opportwuty to be heard and the Ordinance and its
minor modifications will be timely adopted.
We tlunk fhe City can be justifiably proud of the stable District Cooling rates. Demand
Rates aze, foz the most part, under the control of the management team at District
Cooling. Energy rates, of course, are subject to volatility of the energy markets.
The FI' 2008 District Cooling Schedule A previously delivered to the City Clerk in July
2007 is consistent with Schedule A to the proposed Franchise. The Demand Rate is
increasing for the first time in five yeazs and is 6.5% above the present rate; an average
annual increase of 13% per yeaz. From the commencement of District Cooling
commercial operations in FY 1993 through this Schedule A filing, the average annual
Demand Rate increase has averaged 2.1 % per year while the CPI has averaged 2.6%.
Honorable Christopher B. Coleman
Mayor, City of Saint Paul
August 29, 2007
Page 4
v�-iio9
This Demand Rate record is a strong achievement that reflects cueful administration of
costs within the control of District Cooling management.
The request for a timely and efficient Franchise adoprion process is designed to recognize
the long, successful relationship between the City of Saint Paul and Dish Cooling. The
numerous and extensive financial information periodically provided to the City
concemiug the operation of this company also facilitates this process. In additian, the
City annually receives a certified independent audit of the expenditures of this company.
We are very hopeful the City will adopt a schedule that will identify any concems from
the administration and timely and efficienUy address and resolve these concems.
Very hvly yo
��� � � ��
Anders J. Ryd
President
Cc: City Clerk
3vlembers of the City Council
Honorable President, Kathy Lanhy
Honorable Deborah Montgomery
Honorable Dave Thune
Honorable Pat Harris
Honorable 7ay Benanav
Honorable Lee Helgen
Dan Bostrom
John Choi, City Attorney
Matt Smith, Director, Office of Financial Services
William M. Mahlum, Execurive Vice President and General Counsel
ATTACHMENT A
v�-��o�
Appendix K. District Cooling Franchise
[Sec.] .01. Franchise granted.
District Cooiing St. Paul, Inc., (f/k/a District Energy Services, Inc.) a nonprofit Minnesota
corporation, hereinafter referred to as "District Cooling," is hereby granted a franchise to use and
occupy the streets and other pubiic properry within the City of Saint Paul for the purpose of
constructing, maintaining and operatin9 a system of pipes, subways and manholes with a11 other
necessary appurtenances only for carrying on a district cooling system providing thermal energy to
customers within said city and for provision of a fiber optic network for government use by the City
of Saint Paul, the State of Minnesota, [he County oF Ramsey, and by other government entities as
may hereaffer be approved by City Council resolution. Said franchise may not be sold, transferred,
assigned, pledged, mortgaged or in any way disposed of or encumbered without the consent of the
city except as provided in Section .16.
[Sec.] .02. Definitions.
For the purpose of this chapter the following terms, phrases, words and their derivations shall have
the meaning given herein. When not inconsistent with the context, words used in the present tense
include the future, words in the plural number include the singular number, and words in the
singular number inciude the plural number. The words "shall" and "will" are mandatory and "may"
is permissive. Words �ot defined shall be given their common and ordinary meaning.
A. Capitalization cost shall mean the total cost incurred by District Cooling for the tangible assets of
the district cooling system, exclusive of intangible assets such as goodwill or value of the franchise;
provided that capitalization cost shall in no event be less than the amount required to fully pay and
discharge all debts of the company incurred in connection with the district cooling system.
B. City shall mean the Clty of Saint Paul, Mlnnesota, a home-rule municipal corporation.
C. Distribution facilities shall mean all District Cooling piping, tunnels, conduits, vaults, chambers,
cable or any other appurtenance or structure located in the stree[s and necessary or used for the
delivery of thermal energy or a fiber optic network for government use.
D. Dist�ict cooling service ag�eement shall mean the standard form of the uniform contract for
service entered into by District Cooling and its customers.
E. District cooling system or system shall mean the distribution facilities together with the chillers,
cooling towers, pumps, and other District Cooling equipment used to provide chilled water.
F. District energy services, pistrict Cooing or company shall mean pistrict Coolin9 St. Paul, Inc., a
subsidiary of District Heating Development Company, d.b.a. District Energy Saint Paul, Inc., its
successors and assigns.
G. District Energy Saint Paul, Inc., District Energy or District Heating Development Company shall
mean District Heating Development Company, d.b.a. District Energy Saint Paul, Inc., its
subsidiaries, successors and assigns, excluding District Cooling.
H. Finance director shall mean the director of the department of finance and management services
for the City of Sainf Paul or his or her designee, or any successor to his or her functions.
I. Gross earnings shall mean all sums received or receivable by the company in demand and
energy charges from the sale of thermal energy to customers of District Cooling and all sums
collected by District Cooling for routine maintenance or use of the fiber optic network serving the
State of Minnesota, the County of Ramsey, and other government entities as approved by the City.
For purposes of this franchise and the district heating franchise, District Energy shall not be
deemed a customer of District Cooling nor shall DisYrict Cooling be deemed a customer of District
Energy.
J. Public works director shall mean the director of the department of public works for the City of
Saint Paul or his or her designee, or any successor to his or her functions.
K. Street shall mean the surface, and the spaces above and below, any public street, boulevard,
road, highway, freeway, tane, alley, court, sidewalk, parkway, river, skyway or skyway bridge, or
any other public place or area under control of the city, now or hereafter existing.
[Sec.] .03. Application and service of notice.
The department of finance and management services of the City of Saint Paul is the department
that is primarily responsible for the city's administration of this franchise. Except as otherwise
specifically provided herein, any applications and notices required or permitted to be given under
this ordinance shall be deemed properly given when deposited with the United States Postal
Service, postage paid, addressed to the party to receive same at the address set forth below, or at
such other address of which the party to receive the notice shall have designated in the franchise.
The finance director shall develop all forms �ecessary to administer this chapter.
ATTACHIvIENT A
D7- l/D�
Notices to the city shall be addressed to the followin9:
Director of Fi�ance and Management Services
Room 234 City Hall
15 West Kellogg Boulevard
St. Pau{, MN 55102
Notices to District Cooling shall be addressed to the following:
President
Distrid Coofing St. Paul, Inc.
76 West Kellogg Boulevard
St. Paul, MN 55102-1611
[Sec.] .04. Term of franchise.
This franchise shall be in full force and effect for a term and period of twenty (20) years, beginning
on the effective date of this ordinance.
[Sec.] .QS. Nonexclusive franchise.
This franchise for the operation of a district cooling system shall be a nonexdusive franchise. The
franchise granted shall be subject to the limitations imposed by this ordinance and reasonable
regulation designed to protect the health, safety and welfare of the populace. District Cooling must
specify to the public works director the locations of alI facilities placed in the streets and shall strive
to notify the public works director not less than ninety (90) days prior to any additions to these
facilities. District Cooling may request that any information provided pursuant to this franchise be
deemed nonpublic data as defined in Minnesota Statutes 13.37 et seq., and the city shall treat the
information as nonpublic in accordance wiYh the terms of that statute and any other applicabVe
ordinances, rules or regulations.
[Sec.] .06. Interpretation.
Unless otherwise specifically prescribed herein, the following provisions shall govern the
interpretation a�d construction of the franchise granted under this ordinance:
A. District Cooling shall not be relieved of its obligation to promptly comply with any provision of
this franchise by any failure of the city to enforce prompt compliance with the same or any other
provis�on.
B. Any right or power conferred or duly imposed upon any officer, employee, department, or board
of the city is subject to transfer by operation of law to any other officer, employee, department or
board of the city.
C. Unless otherwise directly or indirectly provided herein, this frenchise shall not relieve District
Cooling of any requirement of the city Charter or provision of the Legislative or Administrative
codes of the city.
D. The granting of this franchise or any of the provisions contained herein shall not be construed to
prevent the city from granting a similar franchise to any other person or corporation.
E. This franchise is granted pursuant to applicable state and federal law and District Cooling shall at
all times comply with all applicable present and future laws, rules and regulations By acceptance of
this franchise District Cooling does not waive its rights under such laws, rules and regulations.
Furthermore, District Cooling shall obtain all necessary permits, franchises and authority required
pursuant to city, state and federal rules, regulations and laws.
jSec.] .07. Limitations upon franchise.
A. No privilege or exemption is granted or conferred by this franchise except those specifically
prescribed herein.
B. Any privifege cfaimed under this franchise by District Cooling in any street shall be subordinate
to any prior recorded easement.
[Sec.] .08. Rights reserved to city.
The city reserves every right and power which is required to be reserved by any provision of the
city Charter or any statute, rule or regulation. Except as otherwise provided herein, neither the
granting of this franchise nor any provisions thereof shall constitute a waiver or bar to the exercise
of any governmental right or power of the city.
[Sec.] .09. Duties and responsibilities.
The finance director, or his or her duly authorized representative, is the principal city official
responsible for the administration of this franchise, and all questions regarding interpretation or
application of this franchise shall be raised initially with that designated official.
Failure or refusal by the finance director to respond to any question other than questions related to
Section .23 herein within thirty (30) days of the date he/she receives it in written form, or District
ATTACHMENT A
�7� �fd�
Cooling's receipt of a written response from the finance director to any question submitted in
written form, shafl be deemed exhaustion by District Cooling of its administrative remedies under
this ordinance.
[Sec.] .10. Technical standards.
The fsanchise granted herein shal{ extend to the construction, operation and maintenance of the
district cooling system by District Cooling in the City of Saint Paul and the fiber optic network
installed for government use.
District Cooling shall perform aIl work and make all installations in conformity with the standards
for installation established by the public works director, which standards shall be consistent with
those administered for all similar work by other parties. District Cooting shall, prior to
commencement of any consTruction or usage of the public streets or other public property within
the City of Saint Paul, file wiYh the public works director a detailed routing map showing the
placement of all facilitles and other details of such construction or usage. Upon completion of
construction District Cooling shall provide the public works director with a set of "as builY'
drawings.
District Cooling, in the installation, maintenance and operetion of its distribution facilities, shall be
subject to such reasonable regulations as may Iawfully be provided by the city, and no equipment
shall be installed or laid by District Cooling within the streets, except upon application to the public
works director or other persons designated by the city council, and after written permission is
granted by said director or person. District Cooling and the city shall make reasonable good faith
efforts to advise each other of plans and programs, both long and short range, for the construction
of improvements and facilities in public streets and other public property which might affect the
other party or require its coordination. District Cooling shall not excavate or make installation in
any public way without having obtained a permit to do so as required by Chapter 125 of the Saint
Paul Legislative Code, and shall give the public works director at least forty-eight (48) hours' notice
prior to any excavation or insta{{aYion that requires a permit except in cases of emergency.
[Sec.] .11. Rates and regulation.
With respect to the setting of rates charged to customers the following shall apply:
{a) AIf rates made, demanded or received by District Cooling 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 each class of customers. Rates shall generate
sufficient revenue to allow District Cooling to recover its reasonable operating cost and expenses;
to provide for the timely and orderly payment of costs and expenses; to provide for the timely and
orderiy retirement of debt including but not limited to the bonds issued by the HRA and other public
issuers and the HRA subordinate loans issued for financing the system; to provide coverage on
such bonds and the debt service on HRA subordinate foans; and to provide for improvements,
enlargements and extensions necessary to adequately service the territory of Che city, including the
principal and interest Yo become due on obligations issued or to be issued.
(b) The rates, contained in Schedule A* attached to this ordinance and incorporated herein by
reference, shall remain and continue in force untii amended or changed.
*Editor's note--Schedule A has not been included herein by the editor, but may be found on file
with the city clerk.
(c) District Cooling shall not directly or indirectly charge, demand, collect or receive from any
customer or person a greater or iess compensation for any service rendered or to be rendered by it
than that prescribed i� Schedule A; nor shall any person knowingly receive or accept any service
from District Cooling for a compensation greater or less than that prescribed in Schedule A. District
Cooling shall not, as to rates or service, make or grant any unreasonable preference or advantage
to any person or subject any person to any unreasonabfe prejudice or disadvantage. Nothing
contained in this ordinance shall be construed to impair the tax-exempt status of bonds issued to
finance the system. "Service," as used herein, does not include customer connection charges or
other schedule of charges for specific services to individual customers.
(d) District Cooling 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. Such books, accounts, papers and records shall include a detailed tracking of
all expenses directly related to the operation of the system and any other subsidiary operations of
District Cooling or District Energy, and an allocation of those expenses by business and customer
classes.
ATTACHMEN'I' A Q�� II �
(e) After thirty (30) days' notice to the city, District Cooling may file pursuant to Section .23 a new
or amended Schedule A, containing new or amended rates, fees and/or charges, together with
rules and regulations not inconsistent with the district cooling service agreement. Such notice is
jurisdictional to a change in Schedule A. Such new or amended rates shall be effective and may be
charged on the tenth day after the filing of the new or amended Schedule A in the o�ce of the city
clerk, and shall continue in effect until approved or denied by the city council by resolution, or until
deemed approved pursuant to Section .23.
(f� The proposed changes shall be approved if they are just, reasonable and nondiscriminatory. The
city shall be required to take into account the requiremenks of subsection .11(a) above in reviewing
the proposed new or amended Schedule A. The city shall also be required to take into account the
operation of the terms and conditions of the district coofing service agreement, incfuding Articies
VI, VII and XXI thereof, which is the uniform contract entered into by District Cooling and its
customers providing for a detailed method of charges for demand and energy related costs. The
district cooling service agreement shall be filed in the office of the city clerk at the same time as
the written acceptance required by Section .26 herein. Amendments to the district cooling service
agseemenY shall be filed with the city clerk at least thirty (30) days prior to the effective date of
such an amendment or amendments. Any amendment to the district cooling service agreement
shall be effective thirty (30) days after filing in the absence of a resolution by the city council
disapproving such amendment.
(g) Proposed changes to Schedule A can only be approved, approved in part if severable, or denied,
and cannot be modified or amended. The city shap require District Cooling to refund or credit to its
customers any increases in rates which are in excess of the lawful and reasonable rates as finally
determined.
[Sec.] .12. Regulatory effort--Staffing and process.
For the purpose of assisting the city in the regulation of the activities and rates of Distrid Cooling
as provided in this franchise, the finance director shall provide sufficient staff resources for the
regulatory effort and the city attorney shall appoint an assistant city attorney or other attorney to
perform the legal work that such regutation necessitates.
District Cooling shall pay the city during the term hereof an annual regulatory fee equivalent to the
annual regulatory fee paid by District Heating Development Company, d.b.a. District Energy St.
Paul, Inc., pursuant to the franchise granted said company. This fee shall be payable annually on
July 1, beginning July 1, 2008, 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 individuals appointed by the
finance director and the city attorney, their assistant or assistants, clerical help and o�ce
expenses, outside accountants, attorneys, advisors and consultants' fees reasonably related to the
regulation of District Cooling, its rate schedules, and other matters and operations under this
franchise. The amount of such payment or payments shail be allowed as an operating expense of
District Cooling in the City of Saint Paul. Such sum shall be adjusted each year by a dollar amount
expressed in percentages equal to the percentage increase or decrease in the U.S. All-Cities
Consumer Price Index for Ali Urban Consumers (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 prev�ous year's payment.
[Sec.] .13. Reports to be filed.
District Cooling shall file not later than the twenty-fifth day of each month with the finance director,
a report of the number of customers, sales and revenues by classes of service for the preceding
month based upon its utility operations within the City of Saint Paul.
District Coofing shall also file with the finance director, within three (3) mo�ths after October 1 of
each year, in a format to be approved by the finance director, an audited financial statement and
any other information requested by the finance director, covering the utility operations within the
City of Saint Paul for the preceding year, including all revenues, expenses and plant investmenC,
together with such breakdown and anaiysis of operating statements as the said person may
request. The city shall have the right to require additionai information concerning operations under
this ordinance from time to time in such form as may be prescribed.
The city shall have the right, at all reasonable times and upon reasonable notice, to examine the
books of accounts, records, vouchers, disbursements, rates, revenues, contracts, purchases, sales
and other transactions bearing on and relevant to the rates Distrid Cooling charges and the service
it provides to its customers in the City of Saint Paul.
The provisions of this Section .13 are subject to the regulations of the last sentence in Section .OS
hereof.
[Sec.] .14. Relocation.
ATTACHIVIENT A
���1 /Q�
In locating its distribution facilities, District Coolin9 shall in no way unreasonably interfere with the
safety and convenience of ordinary travel along and over the streets nor interfere with othe� uses
to which such places are put by the City of Saint Paul, any of its redevelopment agencies, the
Housing and Redevelopme�t Authority (HRA) of the City of Saint Paul, or the Saint Paul Port
Authority (Port Authority) and the Board of Water Commissioners of the City of Saint Paul. In the
event it shaif become necessary during the term of this franchise to remove or relocate the physicaf
property of District Cooiing located within or upon any of the streets or public property in the city
because of such interference or use requfred by the city, HRA or Port Authority or as a result of any
public improvement undertaken by the city, HRA or Port Authority, District Cooling shall, when so
advised by the city council, remove and relocate said distribution facilities without delay and
without cost to the city, HRA or Port Authority and shall place streets or public property in the same
condition as they were prior to said removal or relocation. However, after District Cooling has so
retocated its distrfbution facilit+es, District Cooling shall not within ten (1�) years thereaffer be
required at its owners expense to make any further relocation of the same distribution facilities if at
the time of the first relocation the city had actual notice or knowledge of the subsequent public
improvement project. 7he city shall strive to give the District Cooling at least one hundred eighty
(180) days' prior notice of pians for improvements which may require relocation by District Coofing.
In the event that District Cooling is required to remove its distribution facilities at the request of
the city, the city shall cooperate with District Cooling in order to identify an alternative location for
the relocation of the facilities.
Except where required for a public improvement project, the vacation of any street or public
property, after the installation of District Cooling distribution facilities, shall not operate to deprive
District Cooling of its rights Yo operate and maintain such distribution facilities until the reasonable
cost of relocating the same and the loss and expense resulting from such refocation are flrst paid to
District Cooling by the private property owner.
In an emergency, as determined by the city, when District Cooling or its representative is
unavailable and/or unable to provide the necessary immediate repairs to a damaged or
malfunctioning installation by District Cooling, or to any faults or settled or sunken areas that may
develop in any area over, around or adjacent to the installation of District Cooling, the city, when
apprised of suCh an emergency, shall have the right to make the necessary repairs with the total
cost of same being charged to DisYrict Cooling. The city must attempt to contact District Coohng at
its offices prior to commencement of any emergency repairs.
[Sec.] .15. Fees.
During the term of the franchise District Cooling shall pay the city an annual franchise fee in the
amount of 3.4 percent of District Cooling's annual gross earnings. Said payments shall be made in
monthly installments. The payment shall be due on or before the twenty-fiRh calendar day of the
succeeding month. The payment obligation shall be met if the payment is mailed and postmarked
on or before the due date. In no event shall Distritt Cooling be required to pay a franchise fee in
exces5 of the amount which it can legally collect from its customers in the city by means of a
surcharge on its rate schedule for the purpose of coliecting the franchise fee.
[Sec.] .16. Assignment.
The rights granted District Cooling by this franchise inure to the benefit of District Cooling, and any
parent, subsidiary, affiliated or successor entity now or hereafter existing. The rights shall not be
assignable without the express written consent of the city council, except District Cooling may
assign its rights under this ordinance to DistricT Heating DeveVopment Company, d.b.a. Distr�ct
Energy St. Paul, Inc., without such consent, so long as such assignee assumes all of the obligations
of the franchise and is bound to the same extent as District Cooling. Such consent shall not be
arbitrarily, capriciously or unreasonably withheld, delayed or conditioned. Any required consent is
to be evidenced by an ordinance of the city council that fully recites the terms and conditions, if
any, upon which consent is given.
Notwithstanding the foregoing, the city hereby consents to the assignment of District Cooling's
rights under this ordinance to the trustee for bonds issued by the Housin9 and Redevelopment
Authority of the City of Saint Paul, Min�esota (the "HRA") or to any other public issuer to finance
the district cooling system, such assignment being for the purpose of securing District Cooling's
obiigation to repay the loan from the HRA to District Cooling of the proceeds of such bonds. The
city further consents to any amendment or supptement to the security lnstrument providing for
such assignment if executed and delivered in connection with bonds issued in the future by the
HRA or any other public issuer to provide financing for the district cooling system. In the event
such trustee forecloses upon or enforces such security interest, the city shall recognize the rights of
such trustee as a successor to District Cooling under this ordinance without any further consent
from the city. The consent of the city further extends to the assignment to a bank, insurance
ATTACfIMENT A
� 7�����
company or other entity providing credit enhancement for the bonds issued by the HRA or any
other public issuer if such credit enhancer becomes a co-mortgagee or co-secured party with the
bond trustee. The city further consents to the assignment to the HRA of District Cooling's rights
under this ordinance to secure repayment of a loan (separate and apart from the loan of bond
proceeds) made to District Cooling by the HRA to finance the district cooling system, and the city
simi{arly agrees that if the HRA foredoses upon its secusity interest in the ordinance, the city will
recognize the HRA as the successor to District Cooling under this ordinance without any further
consent from the city.
[Sec.] .17. Leasing of facilities.
District Cooling shall not sublease any part of the system to any person or entity not related to or
affiliated with District Cooling without the consent of the city. District Cooling must retain
responsibility for servicing and repairing alI parts of the system if it enters into any sublease.
[Sec.} .18. District CooWng indemniFcation and liability for damages.
A. The company shall indemnify and save the city whole and harmless from any and all claims for
injury or damage to persons or property occasioned by or arising out of the construction,
maintenance, operation or repair of the system or by the conduct of District Cooling's business in
the city whether or not any act or omission complained of is authorized, allowed or prohibited by
this franchise. The company shall reimburse the city for all expenses incurred by the city in
defending itself, its officers, agents or employees, against any and all claims for damages or
penalties. These expenses shall include, but not be I�mited to, attorney fees, expert witness fees
and court costs and shall also include the reasonable value of any services rendered by any officers
or employees of the city.
B. The city shall not and does not by reason of the granting of this franchise assume any liability of
District Coofing whatsoever for injury to persons, damage to property, loss of services, damage
claims by users, or other penalties. The foregoing does �ot indemnify the city for its own
negligence except for claims arising out of or alleging the city's negligence where such negligence
arises out of or is primarily related to the construction, operation, maintenance or repair of said
system, including, but not limited to, the issuance of permits and inspection of plans or work. This
section is not, as to third parties, a waiver of and defense or immunity otherwise available to
District Cooling or the city; and District Cooling, in defending any action on behalf of the city, shall
6e entitled to assert in any action every defense or immunity that the city would 6e able to assert
on its own behalf.
C. District Cooling 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 the city, its officials, officers,
boards, commissions, empioyees or agents, Por any other award of a franchise made in conformity
with applicable local, state or federal law.
[Sec.] .19. Liability insurance.
A. District Cooling shall purchase and maintain such insurance as will protect District Cooling and
subcontractors from claims set forth below which may arise out of or result from District Cooling
operations under this ordinance, whether such operatwns be by District Cooling or by any
subcontractor or by a�yone directly employed by them, or by anyone for whose acts any one of
them may be liabfe. District Cooling may self-insure any or aff of the following if autharized by the
commissioner of the Department of Commerce of the State of Minnesota.
B. District Cooling shall obtain the following and submit certiticates of insurance to the finance
director in amounts to be determined by him or her; provided, that while any loan agreement
between District Cooling and the Housing and Redevelopment Authority of the City of Saint Paul
remains in effect, required insurance amounts shall be as provided in such agreement:
1. Workers' compensation and employers' liability insurance.
2. General liability insurance.
3. Automobile liability insurance.
C. All certificates of insurance shall provide that the insurence company give the city through its
finance director thirty (30) days' prior written notice of cancellation, nonrenewaf, or any material
changes in the policy, and shall name the city as an additional insured.
D. The above paragraphs establish minimum insurance requiremenYS and it is the sole
responsibility of District Cooling to purchase and maintain additional insurance that may be
necessary.
E. District Cooling shall not commence construction of the initial distribution facilities until it has
obtained the required insurance and filed an acceptable certificate of insurance with the finance
director.
ATTACFIMENT A D��I (O�I
F. Nothing in this franchise shall constitute a waiver by the city of any statutory limits or exceptions
on liability.
G. District Cooling's failure to procure or maintain required insurance shall constitute a material
breach of this franchise and shall also, at the city's discretion, allow the city to procure or renew
such insurance to protect the city's interests and pay any and all premiums in connection therewith
and recover aIl monies so paid from District Cooling.
[Sec.] .20. Future uses.
The city reserves the right, subject to further conditions described in this section, to lay and permit
to be laid sewer, gas, water, and other pipelines or cables and conduits, and to do and permit to be
done any underground and overhead installation or improvement that may be deemed necessary
or proper by the governing body of the city in, across, along, over or under any streets occupied by
District Cooling and to change any curb or sidewalk or the grade of any street. The foregoing right
is subject to the condition that if the laying of such pipelines or cabtes or conduits or the doing of
any said installation or improvement is on behalf of or for an entity other than the city, such laying
of pipelines or cables or conduits or doing of any said installation or improvement shall not interfere
with District Cooling's existing distribution facilities and said entity or entities shall be required by
the city to compensate District Cooling for any damage so caused; provided, however, that in
permitting such work to be done by said other entity or entities, the city shall not be liable for any
dama9e so caused; further provided, however, that nothing in this section or elsewhere in this
franchise shall relieve the city of liability for any damages it causes to District Cooling's distribution
facilities by reason of the city's, or its contractor's, work in laying pipelines or cables or conduits or
doing of any installation or improvement described above.
[Sec.] .21. Termination and forfeiture.
A. In addition to all other rights and power retained by the ciry in this ordinance, the city reserves
the right to terminate this franchise and all rights and privileges of this 4ranchise in the event of a
material breach by District Cooling of its terms and condiYions. A material breach by District Cooling
shall mean one or more of Yhe following:
(1) Violation of any material provision of this franchise;
(2) Disposing of any of the facilities or property of its system with the intent solely to prevent the
city from purchasing it as provided for herein;
(3) Material intentionat misrepresentation of Fact in an application pursuant to Section .23;
(4) Failure to maintain necessary insurance.
B. The foregoing shall not constitute a material breach if the violation occurs but it is without fault
of District Cooling or occurs as a result of circumstances beyond District Cooiing' reasonable
control. Circumstances beyond the control of District Cooling shall include, but not be limited to,
acts of God; strikes, lockouts or other labor disturbances; unavailability of labor or materials;
failure of other utilities to perform walkout and make ready and to locate underground utilities in a
timely manner; orders or restraints of any kind of the government of the United States or the State
of Minnesota or their respective departments, agencies or officials or any civil or military authority;
insurrections, riots; landslides earthquakes, fires, storms, droughts, floods; explosions; breakage
or accident to machinery, pipes or lines; or any other extraordinary cause or event not reasonably
within the control of District Cooling and not proximately caused by its negligence. District Cooling
shall not be excused by mere economic hardship, nor by malfeasance or misfeasance of its
directors, officers or employees.
C. District Cooling shall be given written notice by the city of any material breach of this ordinance
and shall have thirty (30) days from receipt of such notice to remedy any failure constituting such a
breach.
D. If, upon expiration of the thirty-day period referred to in paragraph C above, Distrid Cooling
shall not have remedied the breach, the city may seek to terminate this franchise; in such case, the
city shall file an application for termination of the franchise in accordance with Section .23 hereof.
E. Upon receipt of the city council's approval or denial of the application to terminate the franchise
pursuant to Section .23, District Cooling shall have �inety (90) days within which to serve upon the
city an appeal of the city council's decision to District Court. Service of process of such appeal on
the city shall be made upon the city clerk and the finance director.
F. During the pendency of said application and the appeal provided for in paragraph E hereof, the
ri9hts and obligations of the city and District Cooli�g hereunder shall continue in full force and
effect.
[Sec.] .22. Abandonment of service and removal of equipment upon abandonment,
termination orfoffeiture.
ATTACHMENT A D-�� ���G�
If District Cooling abandons the distribution facilities or a�y portion thereof, it shall give prompt
written notice to the city. "Abandon," as used herein, shall mean to remove from service and
refrain from using for three (3) years or more.
A. Upon abandonment or upon termination or forfeiture of the frenchise, District Coolin9 shall
remove the piping conduits, wires and appliances from the streets, alleys and other public places
within the city to which such abandonment or termination or forteiture applies if the city so
requests in writing. District Cooling shall restore the area according to the standard specifications
of the public works director.
B. Should District Cooling fail to remove the aforementioned equipment as requested by the city,
the city shall have the right to make such removal at the expense of District Cooling.
[Sec.] .23. Renewal or modi£cation of franchise or change in Schedule A.
A. Procedure. Following the adoption and acceptance of the franchise and except as otherrvise
specifically provided herein, all applications by the city or District Cooling for a renewal or
modification of the franchise or by District Cooling for a change in the rates, fees and/or charges
provided in Schedule A may be made and processed in accordance with the following procedure:
(1) The city and District Cooling shall work to assure the orderly, timely and cost effective process
for review of the proposed changes.
(2) The party seeking such a renewal, modffication or change shall file an application with the
finance director and the city clerk. The application shall include statements of all material facts,
opinions and evidence supporting the application. A renewal may involve renegotiation of any term
contained in the franchise and consent to a renewal may not be unreasonably wiYhheld.
(3) The city clerk shall place the fact that an application has been made upon the next available
council agenda.
(4) The city council shall refer the application to committee. Within sixty (60) days after such
referral, staff shall review the application, giving due consideration to the provisions of Section
.il(� and other provisions of this franchise ordinance, and shall request in writing any clarifying or
supplementary information needed from the party making the application. The party making the
application shafl respond within fourteen (14) days after receiving said request. Within seven (7)
days after such response, staff shall notify such party in writing whether the information provided
is sufficient. Following a noUce of insufficient information, the applying party shall have seven (7)
days to file rebuttal material.
(5) Not more than ninety (90) days after referral to committee, staff shall have completed its
review and provided the council with a written evaluation. Upon staff request, the committee chair
may at his or her discretion extend staffs reporting deadline by no more than fourteen (14) days.
(6) No later than thirty (30) days after said staff report has been filed with the committee, the
committee, giving due consideration to the provisions of Section .li(f) and other provisions of this
franchise ordinance, shall make a recommendatio� to the full council for consideration at the next
scheduled council meeting.
(7) The council, giving due consideration to the provisions of Section .11(� and other provisions of
this franchise ordinance, shall approve or deny the application within one hundred eighty (180)
days of the filing of said application. Such 180-day period may be extended by mutual agreement
of District Cooling and the city. Should an extension be agreed upon, the chair of the committee
considering the application may adjust the committee and staff's timetable accordingly. However,
whatever the extension may be, the committee shall refer the application back to the council at
least thirty (30) days before the final day for approval or denial. If no action is taken by the city
council on an application filed by District Cooling within one hundred eighty (180) days of filing, the
application is deemed approved.
Before this ordinance or any amendments thereto by ordinance sha11 be finafly adopted by the
council, a public hearing shall be held upon ten (10) days' published notice in the offiaal
newspaper. District Cooling shall bear the costs of publication of the franchise ordinance or any
amendments thereto.
B. Contested case hearing. At the request of the city or District Cooling, and in order to assist in
determining whether an application shall be approved or denied, the city council may require a
public hearing before a hearing examiner who shail be selected by the State of Minnesota O�ce of
Administrative Hearings within ten (10) days of council approval. The hearing examiner shall hold a
hearing as a contested case pursuantto Minnesota Statute 14.48 and rules adopted pursuant
thereto and make recommendations to the city council. The period of time from the decision to use
a hearing examiner until the presentation of his or her report to the full city council shall not be
included in the 180-day time limit imposed by Section .23(A)(6) of this ordinance. Upon receipt of
such recommendations, the city council shall approve or deny the application. If no such action is
ATTACFIMENT A
�-iioy
taken by the city council on an application filed by District Cooling within sixty (60) days after
receipt of the hearing examiner's recommendations, the application is deemed approved.
In the event a contested case hearing is requested pursuant to this section, District Cooling shall
reimburse the city for expenses incurred as a result of that process, including all hearing examiner
costs, plus other directly related costs, such as city staff, expert witnesses, or consultants fees, up
to a maximum of ten thousand dollars (510,000.00) for such directly related costs. The cost of any
city staff time shall be computed at the employee's rate of pay plus fringe benefits per hour of time
spent working on the contested case.
C. Dist�ict Cooling franchise expenses. AII District Cooling costs related to or incurred in connection
with the provisions of this frenchise shall be allowed as operating expenses.
[Sec.] .24. Police powers.
In accepting this franchise, District Cooling acknowledges that its rights hereunder are subject to
the lawfui exercise of the police power of the city to adopt and enforce general ordinances
necessary to the safety and welfare of the public.
[Sec.] .25. Severabifity.
If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason
held invalid or unconstitutional by any court or administrative agency of competent jurisdiction,
such portion shall be deemed a separate, distinct and independent provision and such holding shall
not affect the validity of the remaining portions thereof.
[Sec.] .26. Acceptance of franchise.
District Cooling shall, within thirty (30) days after the passage and approval of this franchise
ordinance, file with the city clerk its written acceptance in a form to be approved by the city
attorney and shall agree to abide by, keep and perform all the terms, limitations, conditions and
provisions of this ordinance.
o�-uay
SCHEDULE A
to
DISTRICT COOLING FRANCHISE
granted to
DfSTRICT COOLfNG ST. PAUL, INC. f.k.a.
District Energy Services, Inc.
by the
CITY OF SAINT PAUL
RATES: The following rates shall be effective beginning with the billing month of October 2007
and shall remain in effect until superseded:
Demand: $24.79 per ton per month
Energy: $0.071 per ton-hour
PROMPT PAYMENT PROVISION: A charge of 5 percent will be added to the net bill
computed at the rates shown above, which charge shall constitute a discount from the gross bill
for payment within the discount period, al! as more specificalty provided in the District Cooling
Service Agreement.
FUEL ADJUSTMENT: As provided in the District Cooling Service Agreement, the energy
charge may be appropriately adjusted (i.e., spread over the remaining months in the fiscal year)
from time to time during the fiscal year to cover cost increases (or decreases) occurring
subsequent to the establishment of projected energy-related costs for such period regarding
energy purchased by District Cooling St. Paul, Inc., to the extent such costs are in excess of (or
below) those costs projected by District Cooling St. Paul, Inc. in establishing the energy charge
for such period.
SURCHARGE: A City franchise fee surcharge of 3.5 percent will be added to the gross and net
monthly bilis computed under this rate schedule except as otherwise provided by law.
SERVICE CHARGES: The attached service charges shail be effective beginning with the
billing month of October 2007 and shall remain in effect until superseded.
Schedule A
Attachment 1
p�-ifoy
DISTRICT COOLING ST. PAUL, INC.
Service Charges Effective October 2007
Pursuant to Sections 8.3 and 8.4 of the District Cooling Service Agreement as amended, the
following rates are established for performance of specific services more properly charged to an
individual Customer than to all Customers as a whole. Service charges are payable within 30
days of billing and are in addition to Demand Charges and Energy Charges.
1. Restoration of service after shutoff by District Cooling:
Flat charge: $200.00
2. Damage to district cooling system equipment:
Actual cost of repair or replacement as determined by District Cooling plus service
charge of $50.00.
3. Unauthorized drainage of district cooling system water:
The sum of the following:
(a) Estimated quantity of water lost times combined water and sewage rate and prorated
water treatment cost paid by District Cooling during period of drainage;
(b) Estimated thermai energy value of water lost times applicabie Energy Rate; and
(c) Service charge of $85.00/hour.
Note: Drainage of system water may cause harm to other Customers and is cause for
suspension of seroice until corrected.
Service calls made at Customer's request by District Cooling personnel for
problems found to be in Customer's and not District Cooling's equipment:
Between 8:00 a.m. and 3:30 p.m. on Monday through Friday (excluding holidays
observed by District Cooling): $85.00/hour
All other times: $125.00/hour
Charge for chilled water flow exceeding 110 gallons per ton-hour during June,
July, August or September billing period; $0.60 per thousand gallons above 103
gallons per ton-hour.
Credit for chilled water flow below 75 gallons per ton-hour during June, July,
August or September billing period: ($0.60) per thousand gallons below 103 gallons
perton-hour.
ATTACHIVIENT B
Appendix K. District Coolina Franchise
[Sec.] .03. Frenchise granted.
District Coolino St Paul Inc.. (f/k/a District Energy Services, Inr a nonprofit Minnesota
corporetion, hereinafter referred to as'Dis[rfc[ Coolino;'_is hereby g@nted a franchise to use and
occupy the streets and other public property within the City of Saint Paul for the purpose of
constructing, maintaining and operating a system of pipes, subways and manholes with all oYher
necessary appurtenances only for carrying on a distr(ct cooling system providing thermal energy to
customers within said city and for provision of a fiber optic network for govemment use by the City
of Saint Paul, the State of Minnesota, the County of Ramsey, and by other govemment enti0es as
may hereafte� be approved by CRy Council resoiution. Said franchise may not be soW, transfesred,
assigned, pledged, mortgaged or in any way disposed of or encumbered without the consent of the
city except as provided in Section .16.
� Sec. .02. De£nitions.
__�_______
For the purpose of this chapter the following terms, phrases, words and their derivations shall have
ihe meaning given herein. When not inconsistent with the conte�ct, words used in the present Tense
include the fu[ure, words in the plural number include the singular number, and words in the
singular number include the plural number. The words "shall" and "will" are mandatory and "may"
is permissive. Words not defined shall be given their common and ordinary meaning.
A. Capitalization cost shall mean the total cost incurred byAistrict Cooling for th_e_tangible assets of
the district cooling system, exclusive of intangible assets such as goodwill or value of the franchise;
provided [hat cap'rtalization cost shall in no event be less than the amoun[ required to fully pay and
discharge all debts of the company incurred in connection with the district cooling system.
8. City shall mean the City of Saint Paul, Minnesota, a home-rule munitipal corporation.
C. Distribution facilities shall mean allDistrict Coolina piping, tunnels, conduits, yaults, chambers,
cable or any other appurtenance or structure located in the streets and necessary or used for the
delivery of thermaf energy or a fiber optic network for governmeirt use.
D. District cooling service agreement shall mean the standard form of the uniform contract for
service entered into bypistnct Coolino and_its customers._
E. Dist�ict cooling system or system shall mean the distribution facilities together with the chillers,
cooling towers, pumps, and otherAistr� Cooling eguipment u_sed to provide_ chilled water.
F. District energy services, District Cooingor_�ompany_shalV mean Distritt�oolinq St Paul, Inc„ a
subsidiary of District Heating Development Company, d.b.a. District Energy Saint Paul, Inc., its
successors and assigns. -
G. Drstrict Energy Saint Paul, Inc, District Ene�gy or District Heating Development Company shall
mean District Heating Development Company, d.b.a. District Energy Saint Paul, Inc., ik5
subsidiaries, suctessors and assigns, exdudingAistrid Coolina. __
H. Finance diredor shall mean the direc[or of the department of finance and ma�agement services
for the City of Saint Paul or his or her designee, or any successor to his or her functions.
I. Gross earnings shall mean all sums received or receivable by the companyi demand and
energy charges from the sale of thermal energy to customers ofpstrict Coolino and all sums
collected by. istnct Coolina for routine maintenance or use_of the fb_er optic network se_rv_ing_ the
State of Minnesota, the County of Ramsey, and other government entities as approved by the City.
For purposes of this franchise and the district heating franchis�,_ District Energy 5hall_not be
deemed a customer of District oolin nor shap Aistrict Coolino be deemed a, cus[omer of District
Energy.
7. Public works director shall mean the director of the department of public works for the City of
Sai`K Paul or his or her desi9nee, or any successor to his or her functions.
K. Street shall mean the surtace, and the spaces above and below, any public street, boulevard,
road, highway, freeway, lane, alley, tourt, sidewalk, parkway, river, skyway or skyway bridge, or
any other public place or area under control of the city, now or hereafter existing.
„[Sec.] .03. Appiication and serv_ice of notice.
The department of finance and management services of tfie Ciiy of Saint Qaul is the department
that is primarily responsible for the city's administration of this franchise. Ezcept as otherwise
specifically provided herein, any applications and notices required or permitted to be given under
this ordinance shall be deemed properly given when deposited with the United States Postal
Service, postage paid, addressed to the party to receive same at the address set forth below, or at
suth other address of which the party to receive the notice shall have designated in the franchise.
The finance director shall develop all forms necessary to adminis[er this chapter.
6�-1 /f �
Deleted: Enerqy Services
I Ddeted:.,
1 Drletetl: DES J
Deleted: (Oi'tl. No. ll816, § 1, , i
3-28-91; CF. No. 03-484, 7-23- I
� 03)¶ J
Deleted: DES
Deleted: DES —�
Deletetl: DES
Deleted: DES
Deleted: DES
Delete�l: Energy Services
, Delete�: DES —�
Deleted: m
Deletetl: DES
Deleted: DES
Deleted: (Ordinance No. 16947,
as amentled)
Deleted: Energy Services
DeleMtl: DES
DeJetetl: (Ord. No. 17816, § 1,
3-28-91; C.P. No. 03-484, 7-23-
03)¶
ATTACHMENT B
Notices to the city shall be addressed to the following:
Director of Fnance and Management Services
Room 234 City Hall
15 West Kellogg Boulevard
St. Paul, MN 55102
Notices to Aistric[ Coolino shall be addressed to the following:
Presitlent
District�ol"no St Paut InC.
76 West Keilogg Boulevard
St. Paul, MN 55102-1611
�[_Sec.] _04. Term of franchise. _
This franchise shall be in full force and effect for a term and period of twenty (20) years, beginning
on the effective date of this ordinance.
�[Sec.] .OS. Nonexclusive fcanchise.
This franchise for the operation of a district cooling system shall be a nonexclusive fianchise. The
franchise graMed shall be subjec[ to the limitations imposed by this ordinance and reasonable
regulation designed to protect the health, safety and welfare of the populace, pistrict Coolina mus[
specify to Che public works director the lowtions of all facilities placed in the streets and shall strive
to notify the public works director not less than ninety (90) days prior to any additions to these
facilities. Pistnct Cooling may request that any_ informatio_nprovidedpursuaM to this franchise ¢e
deemed nonpublic data as defined in MinnesoW Staiutes 1337 et seq., and the city shall Yreat the
information as nonpublic in accordance with [he terms of that sta[ute and any other applicable
ordinances, rules or regulations.
F [Se�.] .O6_. InterpreWtion. _
Unless otherwise specifically prescribed herein, the following provisions shall govem the
interpretation and consRUCtion of the franchise granted under this ordinance:
A. Distric[ Coolino shall not relieyed of_its oblgation topromptly_comply with_anyproyision of
this franchise by any failure of the city to enforce prompt compliance with [he same or any o[her
provision.
B. Any right or power conferred or duly imposed upon any officer, employee, department, or board
of the city is subjett to transfer by operation of Iaw to any other officer, employee, department or
board of the city.
C. Unless otherwise directly or indirectly provided herein, this franchise shall not relieve istrict
Coolino of any requirement of [he city Charter or provision of the Legislative or Administretive
codes of the city.
D. The granting of this franchise or any of the provisions contained herein shall not be construed to
prevent the city from granting a similar franchise to any other person or corporation.
E. This franchise is granted pursuant to applicable state and federal law and �stnc[ Coohnq shali at
alI times mmply with all applicable present and future laws, rules and regulations By acceptance of
this franchiseAistnc[ Cooling does not,waive.iks rghts_under_such laws,_rules and_regulations._
Purthermote,A'strict Coolin4 shall obtain atl pecessary_permits, frartchises and authqrity reguired
pursuant to city, state and federal rules, regulations and laws.
F [Sec.] .07. Limitations upon franchise. _
A. No privilege or exemption is granted or conferred by this franchise except those speciFlcally
prescribed herein.
B. Any privilege claimed under this franchise byAistnct Coolina in any street shail be su_bordinate
to any prior recorded easement.
F [Sec.] .08. Rights reserv_ed to city.
The city reserves every right and power which is required to be reserved by any provision of the
aty Charter or any statufe, rule or regulation. Extept as othenvise provided herein, neifher the
granYing of this franchise nor any provisions thereof shall constitute a waiver or bar to the exercise
of any governmental right or power of the city.
R [Sec.] .09, Duties and responsibilities._ _ _
The firtance director, or his ur her duly authorized represenWbve, is the prinapal aty officiaf
responsible for the administration of this franchise, and all questions regarding interpretation or
application of this franchise shall be raised initially with that designated offcial.
Failure or refusal by the finance director to respond to any question other than questions reiated to
Section �3 herein within [hirty (30) days of the date he[she receives R in written form, or istrict
6�-iioy
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ATTACHMENT B
Cooling's receipt of a written response from the finance director to any question submitted in
written fortn, shall be deemed exhaustion byAistnct Coolino of its administrative remedies_under
this ordinance.
� Se�. .10. Technicai standards.
The franchise granted herein shall extend to the cons[ruction, operation and maintenance of the
distnct cooiing 5ystem by Aistrict Cooling in the City of Saint Paul a_nd the fiber optit network
installed for govemment use.
District Coolino shali perform_all woric and make_all installations in wnfortnity wRh the_standards
for installation established by the public works director, which standards shall be consistent with
those administered for all similar work by other parties. Aistnct Coolina shall, prior [o _
commencement of any wnstrvction or usage of the public streets or other public property within
the City uf Saint Pauf, file with the pu6lic works director a detailed routing map showing the
placement of all facilities and other deTails of such construction or usage. Upon completion of
mnstruction�stnct Coolino shallprovide the public works director wRh a_set of "as builY'_
drawings.
District Coolinq, in the installation, maintenance_and ope@tioq of_itr distributioqfacilities,_shall be
subject to such reasonable regulations as may lawfully be provided by the city, and no equipment
shall be installed or laid bypistnct Cooling withi_n the streets, except upon application to thepublic
works director or other persons designated by the city munal, and after written permission is
granted by said director or person. �strict Coohng and the city shall ma_ke reasonabl_egood faRh
effocts Yo advise eacfi other o( pfans and programs, both long and short range, for the constnxtion
of improvements and facilities in public streets and other publit property which might affect the
other party or require iks coordination. District Cooling shall not excayate or make installation in
any public way without having obWined a permit to do so as required by Chapter 125 of the Saint
Paul Legislative Code, and shall give the public works director at least forty-eight (48) hours' notice
pnor to any excavation or installation that requires a permit except in cases of emergenty.
[Sec. .11. Rates and regulation._ _ _ _
` 7 _ ___
,}Nith respect to the setting of rates charged to customers the following shall appty:
(a) All rates made, demanded or received byDistnct Cooling shall be_just_and reasonable, Rates
shall not be unreasonably preferential, unreasonably prejudicial or distriminatory, but shall be
suffiaent, equRable and consistent in application to each class of customers. Rates shall generate
sufficient revenue to allowDistrict Coolina to recoyer its reasonable operating ms[ and expenses;
to provide for the timely and orderly payment of costs and expenses; to provide for the timely and
orderly retirement of debt includmg but not limrced to the bonds issued by the HRA and other pubhc
issuers and the HRA subordinate loans issued for flnancing the system; to provide wverage on
such bonds and the debt service on HRA su6ordinate loans; and to provide for improvements,
enlargements and eMensions necessary Co adequately service the territory of the city, including the
principal and interest to become due on obligations issued or to be issued.
(b) The rates, contained in Schedule A* a[tached to this ordinance and incorporated herein by
reference, shall remain and tontinue in forte until amended or changed.
*EdiWr's note—Schedule A has not been included herein by the editor, but may be found on file
with the city clerk.
(c) District Cooling shall not directly_ or indirectly_ ch_arge, demand,_ collect or receiye from any
customer or person a greater or less compensation for any service rendered or to be rendered by it
than that prescribed in Schedule A; nor shaii any person knowingiy receive or accept any service
from�istnct Cooling for_a_compensation greater or less than that_prescribed in Schedule A, istrict
Coolino 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 disadvanWge. Nothing
contained in this ordinance shall be constnied to impair the tax-exempt status of bonds issued to
finance the system. "Service," as used herein, does not indude customer connection chargegor
other schedule of charoes for soecific servi[es to individua� customers
(d)District Coolino 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, aaounts, papers and records, as may be
requested by the city. Suth books, accounts, papers antl records shall intlude a detailed tracking of
aIl expenses directly related to the operation of the system and any other subsidiary operations of
Aistnct Coofno or District Energy, @n_d an allocation of those expenses by business and customer
classes.
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its ezpense shall study the
various methods of ezerasing its
regulatory authority, antl the
reasonable costs directly related
theretoand methodsfor
recouping said costs, and a
report and remmmendation shall
be made to the aty councd no
later than luly 1, 1993, on the
regulatory role of the city.¶
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I_vr�i7:�•��7���]
�(e) After (301 days'_notice_to the city, JJistnct Coolino may fitepursuant to Section � a new
or amended Schedule A, containing new or amended rates, fees and/or charges, together with
rules and regulations not inco�sistent with the district cooling service agreement. Such notice is
jurisdictional to a change in Schedule A. Such new or amended rates shall be effective and may be
tharged on the tenth day after the filing of the new or amended Schedule A in the office of the tity
clerk, antl shall coriUnue in effeCC until approved or denied by the city countil by resolution, or urrtil
� deemed appmved pursuant to Section ,� _
(� The proposed changes shall be approved if they are just, reasonable and nondiscriminatory. The
city shall be required to take inTO account the requirementr of subsection .11(a) above in reviewing
the proposed new or amended Schedule A. The city shall also be required to take into account the
operation of the terms and conditions of the district cooling service agreement, induding Articles
� VI, VII and XXI thereof, which is the uniform contract entered into by Aistrict Cooling and its
cus[omers providing for a detailed method of charges for demand and energy related costs. The
district cooling service agreement shall be filed in the office of the city clerk at the same time as
the writTen accepiance required by Section �6 herein. Amendments to the dis_triR cooling serv_ice
agreement shall be filed with the tity clerk at least thirty (30) days prior to the effective date of
such ao amerWmenT or amendment� Any amendment tqzfie district cooling_serv_ice_agreemenC
shall be effective thirty (30) days after filing in the absence of a resolution by the city council
disapproving such amendment.
(g) Proposed changes to Schedule A can only be approved, approvetl in part if severable, or denied,
and cannot be modified or amended. The city shall requireAistrict Coolino to refund or credit to_Rs
customers any increases in rates which are in excess of the lawful and reasonable rates as finaliy
determined.
�[Sec.] ,12. Regul_atory effort--5taf_fing and process._
For [he purpose of assisting the city in the regulation of the activities and rates ofAistnct Coolinq
as provided in this franchise, the finance director shall provide sufficient staff resources for the
regulatory effort and the city attorney shall appoint an assistant city attorney or other attorney to
perform the legal work That such regulation necessitates.
Distric[ Coolino shall pay the city during the term hereof an_annual regulatory f� equiyalent to the
annual regulatory fee paid by District Heating DevelopmenY Company, d.6.a. District Energy St.
Paul, Inc., pursuant to the franchise granted said company. This fee shall be payable annually on
July 1, beginning July 1, 008, and shall_be used solely_ [o pay the cost of_regu_lation,_which is not
limited to but may include that part of the salary and expenses of the individuals appointed by the
finance director and the city attorney, their assistant or assistants, clerical help and office
expenses, outside accountants, attomeys, advisors and consultants' fees reasonably related to the
regulation ofAistna Cooling�its_rate schedules,_and other matters and operations under this
franchise. The amount of such payment or payments shall be allowed as an operat�ng expense of
,pistrict Coolino in the City of_Saint Paul._Such sum shall be adjusted each year by a dollar amount
expressed in percenYages equal to the percenWge increase or decrease in tfie U.S. All-Cities
Consumer Price Index for All Urban Consumers (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.
�[Sec.) .13. Reports to be £led.
Aistnct Coolino shall _fil_e_not I_ater than _the twenty-ffth_day of each month with the fnance director,
a report of the number of customers, sales and revenues by classes of service for the preceding
month based upon its utility operatio�s within the City of Saint Paul.
Aistrict Coohna shall also _file with the finance director,, within three (3Z months after October 1 of
each year, in a format to be approved by the finance director, an audited financial statement and
any other information requested by the finance director, covering the utility operations within the
City of Sa�nt Paul for the preceding year, including alf revenues, expenses and plairt investmem,
together with such breakdown and analys�s of operating statements as the said person may
request. The city shall have the nght to require additional information concerning operations under
this ordinance from time to time in such form as may be prescribed.
The city shall have the right, at all reasonable times and upon reasonable notice, to examine the
books of atcounts, retords, vouchers, disbursements, rates, revenues, contracts, purchases, sales
and other transactions bearing on and relevant to the rates Pistric[ Coolina charyes and the service
it provides to its cus[omers in the City of Saint Paul.
The orovisions of this Section 13 are sub7ect to the reaulations of the last sentence in Section OS
hereof.
_[Sec.] .14. Relowtion.
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I agreement shall be effectrve
uniess and until approved by the
aty muncil by resolution.
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ATTACfIMENT B
In locating itr distribution facilities, Coohno shall in no way unreasonably interf_ere with the
safety and convenience of ordinary travel along and over the streets nor intertere with other uses
to which such places are put by the City of Saint Paul, any ot iYS redevelopment agencies, the
Housing and Redevelopment Authority (HRA) of the City of SaiM Paul, or the Saint Paul Port
Au[hority (POrt Authority) and the Board of Water Commissioners of the City of Saint Paul. In the
everR it sha11 betome necessary during the term of this franchise to remwe or reiocate the physicaf
property ofDis[rict Coolina located wRhin or upon_any of the sTreets or public property in the city
because of such mterference or use required by the city, HRA or Port Authority or as a result of any
public improvement undertaken by the city, HRA or Port Authority, Cooling shell, when so
ativised by the city countil, remove and relocate said distribution facilities without delay and
without cost to the city, HRA or Port Authority and shall place streets or public property in the same
mndition as they were Orior to said removal or relocation. However, after�strict Coolin� has so
relocated its distribution facilRies, District Coolina shall not wRhin ten {1_O) years thereafter_be
required at its owners expense to make any further relowtion of the same distribution facilities if aY
the time of the first reloca[ion the city had actual notice or knowledge of the subsequent public
improvement project. The city shall strive to give theDistrict Coolino_at least one h_undred eighty
(180) days' prior notite of plans for improvemenCS which may require relocation bypistrict Cooling
In the event that,District Cooling is required to remoye its distribution facilities at the request of _
the city, the city shall cooperate withAistrict Coolino in order tn_identiy an_altemative loca[ion for
the relocation of the facilities.
Except where required for a public improvement project, the vacation of any street or publit
property, afterthe installation of,Distnct Coolina distribution facilRies shall not operate to deprive
.pistrict Coolinn of_its rghts to operate and mainfain such distribuFion facifities until the reasonabte
cost of relocating the same and the loss and expense resulting from such relocation are first paid to
Aistrict Cooling by thepriyate property_owner.
In an emerqency, as determined by the city, whenDistrict Cooling or its representatipe is_ _
unavailable and/or unable to provide the necessary immediate repairs to a damaged or
malfunttioning installation by JJistrict Cooling, or to_ any faults or settled or sunken areas that may
develop in any area over, around or adjacent to the instellation ofA�strict Coolin4, the_city,, when
apprised of such an emergency, shall have the right to make the necessary repairs with the total
cos[ of same being tharged toAistrict Coolinq The_city must atte_mpt to mntac[District Cooling at
its offices prior to commentement of any emergency repairs.
,.[Sec.] .15. Fees. _ _ _ _ _ _
Durmg the term of the franchise �istncC CootinQShall pay the city an_annual franchise fee_in the
amount of 3.4 pertent ofAistric[ Coolinds annual_gross eaminys._Said payments shall_be made in
monthly instaliments. The payment shall be due on or before the twenty-fifth calendar day of the
succeeding month. The payment obligation shall be met if the payment is mailed and postmarked
on or before the due date. In no event shallpistnct Coolm4 be reguired to pay a franehise 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 schedule for the purpose of collecting the franchise fee.
�LSec.] .16. Assignment. _ _ _
__ _ __ _. _ _ __ _ ___ __
The rights grantedDistrict Coolinq by_this_fianchise inure to the benefR of,District Cooling, and any
parent, subsidiary, affiliated or successor entity now or hereafter existing. The rightr shall not be
assignable without the express written consent of the city touncil, except. istrict Cooli,ny may
assign its rights under this ordinance to Dis[ritt Heating Development Company, d.b.a. District
Energy St. Paul, Inc., without such consent, so long as such assignee assumes all of the obligations
of the franchise a�d is bound [o the same extent as istnct Coolin4 Such consent shall not be
arbRrarily, capriciously or unreasonably withheld, delayed or conditionetl. Any required consent is
to be evidenced by an ordinance of the city council that fully recites the terms and conditions, if
any, upon which consent is given.
tVOtwithstanding tfie foregang, tfie city hereby consents to the assignment ofA�strict Coolina's
rights under this ordinance to the trustee for bonds issued by the Housing and Redevelopment
Authority of the City of Saint Paul, MinnesoW (the "HRA") or to anv other oublic issuer to flnance
the distnct cooling system, such assgnment being for the purpose of securinqDistrict Coolino's
obligation to repay the loan from the HRA to Distric[ Cooling of theprqceeds nf such bonds,The
city furCher consentr to any amendment or supplement to the security instrument providing for
such assignment if executed and delivered in connection wi[h bonds issued in the future by the
HRA or anv other oublic issuer to provide financing for the district cooling system. In the event
such trustee Porecloses upon or enforces such seturity interest, the cRy shall recognize the rights of
such trustee as a successor toAistnct Coolino under this ordinance_without,any further consent
from the aty. The consent of the city further eMends to the assignment to a bank, insurance
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ATTAC�IMENT B
tompany or other entity providing credit enhancement for the bonds issued by the HRA or anv
other public issuer if such credR enhancer becomes a co-mortgagee or co-secured party with the
bond trustee. The city further consents to the assignment to the HRA of Aistnct Coolino's rights
under this ordinance to secure repayment of a loan (separate and aparc from the loan of bond
proceeds) made topistrict Cootina by the HRA._to finance the_tlistrict cooling system, and the city
similarly agrees that if the HRA forecloses upon itr security interest in the ordinance, the city will
recognize the HRA as the successor toDis[nct Cooling under this ordinance without any further
wnsent from the aty.
�LSec.] ,17. Leasing of facilities. _ _ _ _ _ _ _
Alstrict Coofina shall not sublease_anypart of the system to arry_person or errtl_ty n� related to or
affiliated wRh gis{nct Coolino witho_ut the wnsent of the city, Aistrict Coolina must retain_ _
responsibility for servicing and repairing all parts of the system if it enters into any sublease.
�[Sec.] .SS.Distric[ Coolina indemnification antl_ liabiliry for damages,
A. The company shall indemnify and save the ciry whole and harmless from a�y and all claims for
injury or damage to persons or property occasioned by or arising out of the construction,
maintenance, operation or repair of the system or by the mnduct ofAistrict Coolinds business in
the city whether or not any act or omission complained of is authorized, allowed or prohibited by
this franchise. The company shail reimburse the city for all expenses incurred by the city in
defending itself, its officers, agents or employees, against any and all tlaims for damages or
penalties. These expe�es shall include, but not be limited co, attorney fees, expert witness fees
and court costr and shall also include the reasonable value of any services rendered by any officers
or employees of the city.
B. The city shall not and does not by reason of the granting of this f2n[hise assume any liabili[y of
Aistrict Coohno whatsoever_for injury topersons, damage_toproperty, loss of services, damage
claims by users, or other penalties. The foregaing does not indemnify Yhe aty for its own
negligence except for claims arising out of or alleging the city's negligence where such negligence
arises out of or is primarily related to the construction, operation, maintenance or 2pair of said
system, including, but not limited to, the issuance of permits and inspection of plans or work. This
section is not, as to third parties, a waiver of and defense or immunity otherwise available to
Aistrict Coolino or the city; andpistnct Coolino in defending_a_ny action_on behalf of the city, sh_all
be entitled to assert in any action every defense or immunity that the city would be able to assert
on its own behalf.
C. �etrict Coolinq_agrees that it will not_bring, nor cause to be_brought,_any action, sui[_or other
proceeding claiming damages, or seeking any other relief against the city, its officials, offcers,
boards, commissions, employees or agents, for any other award of a franchise made in conformity
with applicable local, state or federal law.
,�[Sec.] .19. Liability insu2nce. _ _ _
A.Aistnct Coolina shall purcha_se and_ maintaiq such msurante as will protectAistrict Coolino and
subcontractors from daims set forth below which may arise out of or result fromA�stnct Coolino
operetions under this ordinance, whether such operations be byAistrict Coolina or by any_ ___
subcontrector or by anyone directly employed by them, or by anyone for whose acts any one of
them may be liable. pis[ric[ Coolina may self-insure any or all of the following if authqrized by the
commissioner of the Department of Commerce of the State of Minnesota.
B. DisTrict Coolinq_shall obtain the fol_lowing and submit tertifcates of insurance to the_ fi_nance
director in amounts to be determined by him or her; provided, that while any loan agreement
betweenAistnct Coolino_and the Housing and Redevelopment Authqrity of the_City of Saint Paul
remains in effect, required insurance amounts shall�be as provided in such a9reement:
1. Workers' compensation and employers' lia6flity insurance.
Z. General liability insurance.
3. Automobile liability insurance.
C. All certifitates of insurance shall provide that the insurance company give the cRy through its
finance directorthirty (30) days' prior written notice of cancellation, nonrenewal, or any material
changes in the policy, and shall name the city as an additional insured.
D. The above paragraphs eslablish minimum insurance requirements and it is the sole
responsibiNty of9istrict Cooling to purchase and maintain_additbnal insur_ance Yhat may be
necessary.
E.Aistr ct Cooliny shall not commence_constructioqof the mitial_distribu[ion facili[ies. until_ it has
obtained the required insurance and filed an aaeptable certifcate of insurance with the flnance
director.
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ATTACFIMENT B
F. Nothing in this franchise shall constitute a waiver by the city of any statutory limits or exceptions
on liability.
G. Aistrict Coolino's tailure to prucure or maintain regwred insurance shall constitute a m@terial
breach of this fianchise and shafl aVSO, at the city's disc�etion, allow the city to procure or reoew
such insurance to protect the city's interests and pay any and all premiums in connection therewiYh
and recover all monies so paid fromDistnct Coohno.
�[sec.] .20_. Future uses. _
The ciry reserves the right, subject to further conditions described in this section, to lay and permit
to be laid sewer, gas, water, and other pipelines or cables and conduits, and to do and permit to be
done any underground and overhead installation or improvement that may be deemed necessary
or proper by the goveming body of the city in, across, along, over or under any streetr occupied by
�rict Coohnq and_to change any curb or sidewalk or the grade of any street_The foregoing_ right
is subject to the condition that if the laying of such pipefines or cables or mnduits or the doing of
any said installation or improvemerrt is on behalf of or for an entity other than Che city, such laying
of pipelines or cables or contluits or doing of any said installation or improvement shall not intertere
withAistrict Coolino's existing distribution facilities and said eMity or entRies shall be required by
the cRy to mmpensate�strict Coolino for any_damage so caused; proyided,_howev_er, that_in __
permitting such work to be done by said other entity or entities, the city sha11 not be fiable for any
damage so caused; further provided, however, that nothing in this section or elsewhere in this
franchise shall relieve the city of liability for any damages it causes toDistrict Cooling_s distribution
facilities by reason of the tity's, or its contractor's, work in laying pipelines or cables or conduits or
doing of any installation or improvement de5tribed above.
� Sec. .21. Termination and forfeiture._
� �_____"__ �_____'_
A. In addiNOn to all other rightr and power retained by the city in this ordinance, the city reserves
the right to terminate this franchise and all rights and privileges of this f2nchise in the event of a
material breach bytJistnct Coolina of its_terms and conditions. A material breach byAistrict Coolina
shall mean one or moce of the folbwing:
(1) Violation of any material provision of thi5 franchise;
(2) Disposing of any of the facilities or property of its system with the intent solely to prevent the
city from purchasing it as provided for herein;
(3) Material interrtional misrepresentation of fact in an application pursuant to Section �3;
(4) Failure to maintam necessary msurance.
B. The foregoing shall not constitute a material breach if the violation occurs but it is without fault
of, �istrict Coolin�c or occurs as a result of circumstance5 beyond_�stric[ Cool"ryq' reasonable
controL Circumstences beyond the control ofDistrict Cooli� shall_include,_ but not be limited_to,
acts of God; strikes, fockouts or other labor Uisturbances; unavailabitity of fabor or materials;
failure ot other utilities to perform walkout and make ready and to locate underground utilities in a
timely manner; orders or restraints of any kind of the government of the United 5[ates or the StaYe
of Minnesota or their respective departments, agencies or offcials or any civil or military authority;
insumect�ons, riots; landslides earthquakes, fires, storms, droughts, floods; explosions; breakage
or accident to machinery, pipes or lines; or any other e�ctraordinary cause or event not reasonably
within the control ofDistric[ Coolina and not proximately caused by its negligence. District Coolina
shall not be excused by mere economic hardship, nor by malfeasance or misfeasance of its
directors, officers or employees.
C. Aiscrict Coolfno shalf be giyen written_notice by the city of any material_breachpf this ordina�ce
and shall have thirty (30) days from receipt of such notice to remedy any failure cons[ituting such a
breach.
D. If, upon expiration of the thirty-day period referred to in paragraph C above,Aistrict Coolino
shall not have remedied the breach, the city may seek to terminate this franchise; in such case, the
city shall file an application for termination of the franchise in accordance with Sec[ion �3 hereof.
E. Upon receipt of the city muncil's approval or denial of the application to terminate [he franchise
pursuant to Section 23 District Cooiing shall have ninery (90) days within which to serye upon the
city an appeal of the cRy council's decision to District Court. Service of process of such appeal on
the city shall be made upon the city clerk and the finance direc[or.
F. During the pendency of said application and the appeal provided for in paragraph E hereof, the
rights and obligations of the city andAistrict Coolina hereunde_r shall contin_ue in full force_ and
effect.
,[Sec.] .22.Abandonment of service and removal of eauioment uoon abandonment.
termination or torteiture.
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i Deleted: DES.
� Deletetl: (Ord. No. ll816, § 1,
� 3-28-91)¶ J
i Deleted: DES I
� DeleteA: DES's
`DeletPfl: DES
Dele6etl: DES's
Deleted: (Ord. No. 17816, § 1,
3-28-91)¶ 7
Deleted: DES
Deleted: DES
Deletetl: 24
Deletetl: DES
Delets(: DES'
Deleted: DES J
DeleMtl: DES
Delebed: DES
Deleketl: DES �
Dele.ted: DES J
� Del�ed: 24 �
Deleted: 24, DES �
Deleted: DES
Deletetl: (Ord. No. 17516, § 1,
3-28-91)¶
Deleted: Right of municipal �
acquisition.
ATTACHMENT B
(11 The citv and Distritt Coolino shall work to assure the orderlv Timelv and mst effe[tive orocess
for review ot the or000sed chanoes
�The party seeking such a renewal, modification or change shall file an application with the
finance director and the city clerk. The application shall include statemenis of all material facts,
opinions and evidence supporting the applitation. A renewal may involve renegotiaGon of any term
contained in the fianchise and tonsent to a renewal may not be unreasonably withheld.
3(� ihe city clerk shall pla_ce the_fact that an apglication_has beeq made upon the next_ available
council agenda.
(;J The _c'rty_counql shall refer the application to_committee_ Within si�cty_ (60) days after such _
referral, staff shall review the application, giving due wnsideration to the provisions of Sectwn
.11(� and other provisions of this franchise ordinance, and shall request in writing any clarifying or
supplementary information needed from the party making the application. The party making the
application shall respond within fourteen (14) days after receiving said request. Within seven (7)
days after such response, staff shall notify such party in writing whether the information provided
is sufficient. Following a notice of insuffitient information, the applying party shall have seven (7)
days to file rebuttal materiaL ,
�5 _Not more_than ninety j90) days after referral to committee, staff shall have completed its __
review and provided the council with a written evaluation. Upon staff request, the committee chair
may at his or her discretion e�ctend s[affs reporting deadline by no more than fourteen (14) days.
(,6� No_later than th_irty_ [30) days after said_staff report has been filed wiYh the committee, the _
committee, giving due consideration to the provisions of Section 11(� and other provisons of this
franchise ordinance, shall make a recommendation to the full wuncil for consideration at the nexf
scheduled council meeting.
(7) The council, giving due mnsideration to_the proyisions of Sect .11L)_and other provisions of
this franchi5e ordinance, shall approve or deny the application within one hundred eighty (180)
days of the filing of said application. Such 180-day period may be extended by mutual agreement
ofAistnct Coolinq and the city, Should an_eztension be agreed upon�the chair of the committee_
wnsidering the appLcation may adjust the commit[ee and steffs timetable accordingly. However,
whatever the e�ctension may be, the tommittee shall refer the applicat�on back to the countil at
least thirty (30) days before the final day for approval or denial. If no attion is taken by the city
muntil on an application filed by pistnct Cooling within one hundred eighty (180) days of fi6ng, the
application is deemed approved.
Before this ordinance or any amendments thereto by ordinance shall be Fnally adopted by the
council, a public hearing shall be held upon ten (SO) days' published notice in the official
newspaper. Aistnct Cooiino s_hall bear the msts of publicatiqn of the f@nchise ordinance or any
amendments [hereto.
B. ConYested wse hearing. At the request of the ciry orAistnct Coolino,_and in order Co assist in
determining whether an application Shall be approved or denied, the city council may require a
public hearing before a hearing examiner who shall be selected by the State of Minnesota Office of
Administrative Hearings within ten (10) days of council approval. The hearing examiner shall hold a
hearing as a contested case pursuant to Minnesota Statu[e 14.48 and rules adopted pursuant
thereto and make recommendations to the city council. The period of time from the decision to use
a hearing examiner urKil the presentation of his or her report to the fuli city council shall not be
inUuded in the 180-day time Iimit imposed by Section �{A)(6) of this ordinance, Upoq receipt of
such recommendations, the city countil shall approve or deny the application. If no such action is
��i����
' Dele6efi: A. In the eve�t DES
� forteits or upon a revomtion or
� Mher tertnination of this
� f2nthise pursuant io provisions
I of this ordinance, or at the
�� �ortnal expiration of the
' franchise term, the city shall
I have the right of first refusal to
'i, purchase the sys[em.¶
'�, B, If the crty elects to purchase
� the system atthe normal
expiretion of the fran[hise term,
� the value of the system shall be
� the fair market vaWe as an
� ongoing business concern as
- determi�ed by a panel of three
(3) indepentlent appraisers
agreed upon by the city and
DES; provided, that the purchase
price of the system shall in no
event be less than the amount
required to fully pay and
discharge all debts of the
mmpany mcurred in connection
with the system. Should the city
and DES fail to agree upon [he
selectwn of three (3)
independenY appraisers, each
shall elect one (1) appraiser. The
two (2) appraisers so selected
shall then select a third. If the
city elects to purchase the
system in the event of forteiture,
termination or revocation prior to
the normal expiration date, the
purchase price to be paid by the
city shall be DES's capitalization
ms[. The tlate of vaVUation shall
be no earher than the day
fo��owing the dete of such
forteiture, termination or
revowtion.¶
C. In the accepW nce of this
franchise, DES waives its rights,
if any, to the aty's direct portion
of any relocation costs that
mi9ht otherwise be provided by
D. Upon exerase of this
and the oavment of the
celetetl: 2
Deleted: 3
Deleted: 4
Deleted: 5
Deletetl: 6
Deleted: DES
Deletetl: DES
Deleted: 24
B Should Dist ict Coolino faii to remove the aforementioned eou oment as reauested bv the ari
the ctv shall have the riahY to make suth removal at the exoense of D"st ct Coofno
fSec.l .23. Renewal or modi£cation of franchise or chanae in Schedule A.
ATTACHMENT B
taken by the city council on an application filed by Aistrict Coolino within si�cty (60�_days after
receipt ot the hearing examiners recommendations, Yne application is deemed approved.
In the event a contested case hearing is requested pursuant to ffiis seUion,Aistrict Coolino shall
reimburse the city for expenses incurred as a result of that process, including all hearing examiner
costs, plus other directly related costs, such as city staff, expert witnesses, or consultants fees, up
to a maximum of ten thousand dollars ($10,000.00) for such directly related costs. The cost of any
city staff time shall be computed at the employee's rate of pay plus fringe benefits per hour of time
spent working on the coMested case.
C.District Coolinq_frdnrhise erpenses. AIIA�str ct Coolino costs related to or incurred in connection
with the provisions ot this fianchise shall be allowed as operating expenses.
�[Sec.] .�4. Police powers.
____ _ __ _ __ _ _ _ __
In actepting this fianchise,District Coofino acknowledges that_its rights hereunder are_;ubject to
the lawful exercise of the police power of the city to adopt and enforce general ordinances
necessary to the safety and welfare of the public.
�[Sec.] ,�. Severabi_I'ity._ _ _
If any section, subsection, sentence, tlause, ph2se or portion of this ordinance is for any reason
held invalid or untonstRutional by any court or administrative agency of competent jurisdiction,
such portion shail be deemed a separate, distinct and independeM provision and such holding shall
not affeR the vaiidity of the remaining portions thereof.
�[Sec.] ,� Acceptance of franchise. _
District Coolina shall,_wRhin thirty_�30)_days after_the passage and approv_al of this franchise
ordinance, file with the city clerk its written acceptance in a form to be approved by the city
attomey and shall agree to abide by, keep and pertorm all the [erms, limitations, conditions and
provisions of this ordinance,
07�11/l
I Deleted: D�
; Deleted: DES '
i
Delehgi: DES
i DeleEed: DES
Deletetl: (Ord. No. 17816, § 1,
� 3-28-91)¶ �
Ddetetl: 25
Delete�: DES
I Delebed: (Ord. No. 17816, § 1,
3-28-91)¶
Deleted: 26
Deleted: (Ortl. No. 17816, § 1,
3-28-91)¶
Deleted: 27.
Deleted: DES
Deleted: ¶
(Ord. No. 17816, § 1, 3-28-91)¶
�������
Page 8: [S] Deleted ]eanetbe Bray 8/29/2007 2:14:00 PM
A. In the event DES forfeits or upon a revocaYion or oYher termination of this franchise pursuant
to provisions of this ordinance, or at the normal expiration of the franchise term, the city shall
have the right of first refusal to purchase the system.
B. If the city elects to purchase the system at the normal expiration of the franchise term, the
value of the system shall be the fair market value as an ongoing business concern as determined
by a panel of Three (3) independent appraisers agreed upon by the city and DES; provided, that
the purchase price of the system shall in no event be less than the amount required Yo fully pay
and discharge all debts of the company incurred in connection with the system. Should the city
and DES fail to agree upon the selection of three (3) independent appraisers, each shall elect
orte (1) appraiser. The two (2) appraisers so selected shal! then select a third. It Yhe city elects
to purchase the system in the event of forfeiture, terznination or revocation prior to the normal
expiration date, the purchase price to be paid by the city shall be DES's capitalization cost. The
date of valuation shall be no earlier than the day following the date of such forteiture,
termination or revocation.
C. In the acceptance of this franchise, DES waives its rights, if any, to the city's direct portion of
any relocation costs that might otherwise be provided by law.
D. Upon exercise of this option and the payment of the above sum by the city and its service of
official notice of such action upon DES, DES shall immediately transfer to the city possession and
title to all facilities and property, real and personal, of the system fee from any and alI liens and
encumbrances not agreed to be assumed by the city in lieu of some portion of the purchase
price set forth above, and DES shall execute such warranty deeds or other instruments of
conveyance to city as shall be necessary for this purpose.
(Ord. No. 17816, § 1, 3-28-91)
[Sec.] .23. Abandonment of service and removal of equipment upon abandonment,
termination or forfeiture.
If DES abandons the distribution facilities or any portion thereof, it shall give prompt written
notice to the city. "Abandon," as used herein, shall mean to remove from service and refrain
from using for three (3) years or more.
A. Upon aba�donment or upon termination or forfeiture of the franchise, DES shall remove the
piping conduits, wires and appliances from the streets, alleys and other public places within the
city to which such abandonment or termination or forfeiture applies if the city so requests in
writing. DES shail restore the area according to the standard specifications of the public works
director.
B. Should DES fail to remove the aforementioned equipment as requested by the city, the city
shall have the right to make such removal at the expense of DES.
(Ord. No. 17816, § 1, 3-28-91)
[Sec.] .24. Renewal or modification of franchise or change in Schedule A.
A. Procedure. Following the adoption and acceptance of the franchise and except as otherwise
specifically provided herein, all applications by the city or DES for a renewal or modification of
the franchise or by DES for a change in the rates, fees and/or charges provided in Schedule A
shall be made and processed in accordance with the following procedure:
(i)