Ord 29-07
i
ORDINANCE N0.29-07
AN ORDINANCE GRANTING TO FLORIDA POWER &
LIGHT COMPANY, ITS SUCCESSORS AND ASSIGNS,
A N ELECTRIC FRANCHISE, IMPOSING PROVISIONS AND
CONDITIONS RELATING THERETO, PROVIDING
FOR MONTHLY PAYMENTS TO THE CITY OF DELRAY
BEACH, AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Defray Beach, Florida recognizes
that the City of Defray Beach and its citizens need and desire the continued benefits of electric
service; and
WHEREAS, the provision of such service requires substantial investments of
capital and other resources in order to construct, maintain and operate facilities essential to the
provision of such service in addition to costly administrative functions, and the City of Delray
Beach does not desire to undertake to provide such services; and
WHEREAS, Florida Power & Light Company (FPL) is a public utility which has
the demonstrated ability to supply such services; and
WHEREAS, there is currently in effect a franchise agreement between the City of
Delray Beach and FPL, the terms of which are set forth in City of Delray Beach Ordinance No.
11-81 passed and adopted March 10, 1981, and FPL's written acceptance thereof dated March
27, 1981 granting to FPL, its successors and assigns, a thirty (30) year electric franchise
("Current Franchise Agreement"); and
WHEREAS, FPL and the City of Delray Beach desire to enter into a new
agreement (New Franchise Agreement) providing for the payment of fees to the City of Dekay
Beach in exchange for the nonexclusive right and privilege of supplying electricity and other
services within the City of Dekay Beach free of competition from the City of Delray Beach,
pursuant to certain terms and conditions, and
WHEREAS, the City Commission of the City of Delray Beach deems it to be
in the best interest of the City of Delray Beach and its citizens to enter into the New
Franchise Agreement prior to expiration of the Current Franchise Agreement;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA:
Section 1. There is hereby granted to Florida Power & Light Company, its
successors and assigns (hereinafter called the "Grantee'7, for the period of 30 years from the
effective date hereof, the nonexclusive right, privilege and franchise (hereinafter called
"franchise") to construct, operate and maintain in, under, upon, along, over and across the
present and future roads, streets, alleys, bridges, easements, rights-of--way and other public
places (hereinafter called "public rights-of-way") throughout all of the incorporated areas, as
such incorporated areas may be constituted from time to time, of the City of Delray Beach,
Florida, and its successors (hereinafter called the "Grantor"), in accordance with the Grantee's
customary practice with respect to construction and maintenance, electric light and power
facilities, including, without limitation, conduits, poles, wires, transmission and distribution
lines, and all other facilities installed in conjunction with or ancillary to all of the Grantee's
operations (hereinafter called "facilities'7, for the purpose of supplying electricity and other
2 ORD N0.29-07
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services to the Grantor and its successors, the inhabitants thereof, and persons beyond the
limits thereof.
Section 2. The facilities of the Grantee shall be installed, located or relocated so as
to not unreasonably interfere with traffic over the public rights-of--way or with reasonable egress
from and ingress to abutting property. To avoid conflicts with traffic, the location or relocation
of all facilities shall be made as representatives of the Grantor may prescribe in accordance
with the Grantor's reasonable rules and regulations with reference to the placing and
maintaining in, under, upon, along, over and across said public rights-of--way; provided,
however, that such rules or regulations (a) shall not prohibit the exercise of the Grantee's right
to use said public rights-of--way for reasons other than unreasonable interference with motor
vehicular traffic, (b) shall not unreasonably interfere with the Grantee's ability to furnish
reasonably sufficient, adequate and efficient electric service to all of its customers, and (c) shall
not require the relocation of any of the Grantee's facilities installed before or after the effective
date hereof in public rights-of--way unless or until widening or otherwise changing the
configuration of the paved portion of any public right-of--way used by motor vehicles causes
such installed facilities to unreasonably interfere with motor vehicular traffic, Such rules and
regulations shall recognize that above-grade facilities of the Grantee installed after the effective
date hereof should be installed near the outer boundaries of the public rights-of--way to the
extent possible. When any portion of a public right-of--way is excavated by the Grantee in the
location or relocation of any of its facilities, the portion of the public right-of--way so excavated
shall within a reasonable time be replaced by the Grantee at its expense and in as good condition
as it was at the time of such excavation. The Grantor shall not be liable to the Grantee for any
cost or expense in connection with any relocation of the Grantee's facilities required under
subsection (c) of this Section, except, however, the Grantee shall be entitled to reimbursement
of its costs from others and as may be provided by law.
3 ORD N0.29-07
Section 3. The Grantor shall in no way be liable or responsible for any accident
or damage that may occur in the construction, operation or maintenance by the Grantee of its
facilities hereunder, and the acceptance of this ordinance shall be deemed an
agreement on the part of the Grantee to indemnify the Grantor and hold it harmless
against any and all liability, loss, cost, damage or expense which may accrue to the
Grantor by reason of the negligence, default or misconduct of the Grantee in the
construction, operation or maintenance of its facilities hereunder.
Section 4. All rates and rules and regulations established by the Grantee from time
to time shall be subject to such regulation as may be provided by law.
Section 5. As a consideration for this franchise, the Grantee shall pay to the
Grantor, commencing 90 days after the effective date hereof, and each month thereafter for the
remainder of the term of this franchise, an amount which added to the amount of all licenses,
excises, fees, charges and other impositions of any kind whatsoever (except ad valorem property
taxes and non-ad valorem tax assessments on property) levied or imposed by the Grantor
against the Grantee's property, business or operations and those of its subsidiaries during the
Grantee's monthly billing period ending 60 days prior to each such payment wiIl equa15.9 percent of
the Grantee's billed revenues, less actual write-offs, from the sale of electrical energy to residential,
commercial and industrial customers (as such customers are defined by FPL's tariff) within the
incorporated areas of the Grantor for the monthly billing period ending 60 days prior to each
such payment, and in no event shall payment for the rights and privileges granted herein exceed
5.9 percent of such revenues for any monthly billing period of the Grantee.
4 ORD N0.29-07
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The Grantor understands and agrees that such revenues as described in the preceding
paragraph are limited, as in the. existing franchise Ordinance No. 11-81, to the precise revenues
described therein, and that such revenues do not include, by way of example and not limitation: (a)
revenues from the sale of electrical energy for Public Street and Highway Lighting (service for lighting
public ways and areas); (b) revenues from tither Sales to Public Authorities (service with elig~bifiry restricted
to governmental entities); (c) revenues from Sales to Railroads and Railways (service supplied for
propulsion of electric transit vehicles); (d) revenues from Sales for Resale (service to other utilities for
resale purposes); (e) franchise fees; (f) Late Payment Charges; (g) Field Collection Charges; (h)
other service charges.
Section 6. If during the term of this franchise the Grantee enters into a
franchise agreement with any other municipality located in Palm Beach County, Florida, where the
number of Grantee's active electrical customers is equal to or less than the number of Grantee's
active electrical customers within the incorporated area of the Grantor, the terms of which provide
for the payment of franchise fees by the Grantee at a rate greater than 5.9% of the Grantee's residential,
commercial and industrial revenues (as such customers are defined by FPL's tarif fl, under the same
terms and conditions as specified in Section 5 hereof, the Grantee, upon written request of the
Grantor, shall negotiate and enter into a new franchise agreement with the Grantor in which the
percentage to be used in calculating monthly payments under Section 5 hereof shall be no greater than
that percentage which the Grantee has agreed to Use as a basis for the calculation of payments to the
other Palm Beach County municipality, provided, however, that such new franchise agreement shall
include additional benefits to the Grantee, in addition to all benefits provided herein, at least equal to
those provided by its franchise agreement with the other Palm Beach County municipality. Subject to all
5 ORD N0.29-07
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limitations, terms and conditions specified in the preceding sentence, the Grantor shall have the
sole discretion to detemune the percentage to be used in calculating monthly payments, and the
Grantee shall have the sole discretion to determine those benefits to which it would be entitled, under
any such new franchise agreement.
Section 7. As a further consideration, during the term of this franchise or any
extension thereof, the Grantor agrees: (a) not to engage in the distribution and/or sale, in competition
with the Grantee, of electric capacity and/or electric energy to any ultimate consumer of electric
utility service (herein called a "retail customer'? or to any electrical distubution system established
solely to serve any retail customer formerly served by the Grantee, (b) not to participate in any
proceeding or contractual atrangernent, the purpose or terms of which would be to obligate the
Grantee to transmit and/or distribute, electric capacity and/or electric energy from any third
party(ies) to any other retail customer s facility(ies), and (c) not to seek to have the Grantee transmit
and/or distribute electric capacity and/or electric energy generated by or on behalf of the Grantor at
one location to the Grantor's faciliry(ies) at any other location(s). Nothing specified herein shall
prohibit the Grantor from engaging with other utilities or persons in wholesale transactions which are
subject to the provisions of the Federal Power Act
Nothing herein shall prohibit the Grantor, if permitted by law, (r) from purchasing electric
capacity and/or electric energy from any other person, or (u) from seeking to have the Grantee transmit
and/or distribute to any facility(es) of the Grantor electric capacity. and/or electric energy
purchased by the Grantor from any other person; provided,
ORD N0.29-07
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however, that before the Grantor elects to purchase electric capacity and/or electric energy from
any other person, the Grantor shall notify the Grantee. Such notice shall include a sumtr~aty of the
specific rates, terms and conditions which have been offered by the other person and identify the
Grantor's facilities to be served under the offer. The Grantee shall thereafter have 90 days to
evaluate the offer and, if the Grantee offers rates, temis and conditions which are equal to or better
than those offered by the other person, the Grantor shall be obligated to continue to purchase from
the Grantee electric capacity and/or electric energy to serve the previously-identified facilities of the
Grantor for a term no shorter than that offered by the other person. If the Grantee does not agree to
rates, terms and conditions which equal or better the other person's offer, all of the terms and
conditions of this franchise shall remain in effect
Section 8. If the Grantor grants a right, privilege or franchise to any other person or
otherwise enables any other such person to constn~ct, operate or maintain electric light and power
facilities within any part of the incorporated areas of the Grantor in which the Grantee may lawfully
serve or compete on terms and conditions which the Grantee determines are more favorable
than the terms and conditions contained herein, the Grantee may at any time thereafter temunate
this franchise if such terns and conditions are not remedied within the time period provided hereafter.
The Grantee shall give the Grantor at least 60 days advance written notice of its intent to terminate.
Such notice shall, without prejudice to any of the rights reserved for the Grantee herein, advise the
Grantor of such terms and conditions that it considers more favorable. The Grantor shall then have 60
days in which to correct or otherwise remedy the terms and conditions complained of by the
Grantee. If the Grantee determines that such terms or conditions are not remedied by the Grantor
within said time period, the Grantee may ternnate this franchise agreement by delivering written
notice to the Grantors Clerk and temunation shall be effective on the date of delivery of such
7 ORD N0.29-07
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notice.
Section 9. If as a direct or indirect consequence of any legislative, regulatory or other
action by the United States of America or the State of Florida (or any department, agency, authority,
instrumentality or political subdivision of either of them) any person is permitted to provide electric
service within the incorporated areas of the Grantor to a customer then being served by the
Grantee, or to any new applicant for electric service within any part of the incorporated areas of the
Grantor in which the Grantee may lawfully serve, and the Grantee determines that its obligations
hereunder, or otherwise resulting from this franclse in respect to rates and service, place it at a
competitive disadvantage with respect to such other person, the Grantee may, at any time after the
taking of such action, termminare this franchise if such competitive disadvantage is not remedied within the
time period provided hereafter. The Grantee shall give the Grantor at least 90 days advance
written notice of its intent to terminate. Such notice shall, without prejudice to any of the rights reserved
for the Grantee herein, advise the Grantor of the consequences of such action which resulted in the
competittve disadvantage. The Grantor shall then have 90 days in which to correct or otherwise
remedy the competitive disadvantage. If such competitive disadvantage is not remedied by the
Grantor within said time period, the Grantee may terminate this franchise agreement by
delivering written notice to the Grantor's Clerk and rerrrmmiination shaIl take effect on the dare of delivery
of such notice.
Section 10. Failure on the part of the Grantee to comply in any substantial respect
with any of the provisions of this franchise shall be grounds fox forfeiture, but no
$ ORD N0. 29-07
such forfeiture shall take effect if the reasonableness or propriety thereof is protested by the Grantee
until there is final detPrrr,ination (after the expiration or exhaustion of all rights of appeal) by a court of
competent jurisdiction that the Grantee has failed to comply in a substantial respect with any of the
provisions of this franchise, and the Grantee shall have six months after such final detextnination to make
good the default before a forfeiture shall result with the right of the Grantor at its discretion to grant
such additional time to the Grantee for compliance as necessities in the case require.
Section 11. Failure on the part of the Grantor to comply in substantial respect with any of
the provisions of this ordinance, including but not limited to: (a) denying the Grantee use of public
rights-of--way for reasons other than unreasonable interference with motor vehicular traffic; (b) imposing
conditions for use of public rights-of--way contrary to Florida law or the teens and conditions of this
franchise; (c) unreasonable delay in issuing the Grantee a use pemut, if any, to construct its facilities in
public rights-of--way, shall constitute breach of this franchise and entitle the Grantee to withhold all
or part of the payments provided for in Section 5 hereof until such time as a use pemut is issued or a
court of competent jurisdiction has reached a final determination in the matter. The Grantor
recogivzes and agrees that nothing in this fianchise agreement constitutes or shall be deemed to
constitute a waiver of the Grantee's delegated sovereign right of condemnation and that the
Grantee, in its sole discretion, may exercise such ri~t
Section 12. The Grantor may, upon reasonable notice and within 90 days after each
anniversary date of this fi~nchiSe, at the Grantor's expense, examine the records of the Grantee relating
to the calculation of the franchise payment for the year preceding such anniversary date. Such
examination shall be during normal business hours at the
9 ORD N0.29-07
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Grantee's office where such records are maintained. Records not prepared by the Grantee in the
ordinary course of business may be provided at the Grantor's expense and as the Grantor and the
Grantee may agree in writing. Information identifying the Grantee's customers by name or their electric
consumption shall not be taken from the Grantee's premises. Such audit shall be impartial and all
audit findings, whether they decrease or increase payment to the Grantor, shall be reported to the
Grantee. The Grantor's right to examine the records of the Grantee in accordance with this Section shaIl
not be conducted by any third party employed by the Grantor whose fee, in whole or part, for
conducting such audit is contingent on findings of the audit.
Grantor waives, settles and bars all claims relating in any way to the amounts paid by the
Grantee under the Current Franchise Agreement embodied in Ordinance No. 11-81.
Section 13. The provisions of this ordinance are interdependent upon one another,
and if any of the provisions of this ordinance are found or adjudged to be itnTalid, illegal, void or of no
effect, the entire ordinance shall be null and void and of no force or effect.
Section 14. As used herein "person" means an individual, a partnership, a corporation,
a business trust, a joint stock company, a gust, an incorporated association, a joint venture, a
governmental authority or any other entity of whatever nature.
Section 15. Ordinance No. 11-81, passed and adopted March 10, 1981 and all other
ordinances and parts of ordinances and all resolutions and parts of resolutions in conflict herewith,
are hereby repealed.
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Section 16. As a condition precedent to the taking effect of this ordinance, the Grantee
shall file its acceptance hereof with the Grantor's Clerk within 30 days of adoption of this ordinance. The
effective date of this ordinance shall be the date upon which the Grantee files such acceptance.
PASSED and ADOPTED on second reading this 21 s` day of August, 2007.
ATTEST:
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City Clerk
First Readin ~ ~ ~~~
Second Reading
•
MAYOR
11 ORD N0.29-07
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All-America City
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1993 CERTIFICATION
2001
I, CHEVELLE D. NUBIN, City Clerk of the City of Delray Beach, do hereby
certify that the attached document is a true and correct copy of Ordinance No.
29-07, as the same was passed and adopted by the Delray Beach City
Commission in regular session on the 21St of August 2007.
IN WITNESS WHEREOF, I have hereunto set my hand and the official
seal of the City of Delray Beach, Florida, on this the 28th day of August, 2007.
C~
Chevelle D. Nubin, CMC
City Clerk
City of Delray Beach, Florida
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Printed on Recycled Paper
THE EFFORT eWLWAYS MATTERS
CITE OF DELRA~ BEACH
DELRAY BEACH C ~ T 1 ~ e ~ ~y
1 L Ids ' CO t~,i.111. ? si ,tiV~ vUE s i~Ei.t=H.''{ ~ERi:.`~, F_i7Rir~A 33444
All-America City
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1993 CERTIFICATION
2001
® 561;243-;;^0~~
I, CHEVELLE D. NUBIN, City Clerk of the City of Delray Beach, do hereby
certify that the attached document is a true and correct copy of Ordinance No.
29-07, as the same was passed and adopted by the Delray Beach City
Commission in regular session on the 21St of August 2007.
IN WITNESS WHEREOF, I have hereunto set my hand and the official
seal of the City of Delray Beach, Florida, on this the 22"d day of August, 2007.
Chevelle D. Nubin, CMC
City Clerk
City of Delray Beach, Florida
(SEAL)
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ACCEPTANCE OF ELECTRIC FRANCHISE
ORDINANCE NO. 29-07
BY FLORIDA POWER & LIGHT COMPANY
City of Delray Beach, Florida August 30, 2007
Florida Power & Light Company does hereby accept the electric franchise
in the City of Delray Beach, Florida, granted by Ordinance No. 29-07, being:
AN ORDINANCE GRANTING TO FLORIDA POWER & LIGHT
COMPANY, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC
FRANCHISE, IMPOSING PROVISIONS AND CONDITIONS RELATING
THERETO, PROVIDING FOR MONTHLY PAYMENTS TO THE CITY OF
DELRAY BEACH, AND PROVIDING FOR AN EFFECTIVE DATE.
which was passed and adopted on August 21, 2007.
This instrument is filed with the City Clerk of the City of Delray Beach,
Florida, in accordance with the provisions of Section 16 of said Ordinance.
FLORIDA POWER & LIGHT COMPANY
By
Je .Bartel, Vice President
ATTES
eon, Assistant ecretary
I HEREBY ACKNOWLEDGE receipt of the above Acceptance of Electric
Franchise Ordinance No. 29-07 by Florida Power & Light Company, and certify that I
have filed the same for re o d in the permanent file and records of the City of Delray
Beach, Florida on this 3~day of , 2007.
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City Cler~,;~City of Delray,Beach, Florida
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www.bocanews.com • Boca Raton/Delray Beach News -Friday-Saturday, August 10-11, 200
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CfrY OF OELRAY BEACH,FLORIOA
NOTICE OF PUBLIC HEARING
A PUBLIC HEARING wiN be held on
the bllowittg proposed ordinances al
7:00 p.m. on TUESDAY, AUGUST 21,
2007 or at any continuation of such
meeting which is set by the
Commission), in the City Commisson ~,
Chamtlers, 100 N.W. 1st Avenue, Del-
ray Beach, Florida, al which time the I
City Commission will consider Iheu
adoption- The proposed ordinances
may be inspected at the Office of the
City Gerk at City Hall, 100 N.W. 1st
Avenue, Delray Beach, Florida, be-
tween the hours of 8:00 a.m. and 5:00
p.m., Monday through Fritlay, except
holidays. Aq interested parfies are in-
vited to attend and be heard with re- ,
sped to the proposed ordinances. '
I ORDINANCE N0.29-07
AN ORDINANCE GRANTING TO
FLORIDA POWER & LIGHT COMPA-
NY, ITS SUCCESSORS AND AS-'~
SIGNS, AN ELECTRIC FRANCHISE, '
IMPOSING PROVISIONS AND CON-
DITIONS RELATING THERETO,
PROVIDING FOR MONTHLY PAY-
MENTS TO THE CITY OF DELRAV
BEACH, AND PROVIDING FOR AN
EFFECTIVE DATE.
ORDINANCE N0. 30-07
AN ORDINANCE OF THE CITY COM-
MISSION OF THE CITY OF DEI.RAY
BEACH, FLORIDA, AMENDING
CHAPTER 717, `LANDLORD PER-
MITS° OF THE CODE OF ORDI~
NANCES BY AMENDING SECTION
117.02, `PERMIT FEES', TO PRO-
VIDE FOR AN INCREASE IN THE
LANDLORD PERMIT FEE; PROVID-
fNG ASAVING CLAUSE, A GENER-
AL REPEALER CLAUSE, AND AN
EFFECTIVE DATE.
Pfease be advised that N a person de-
cides to appeal any decision made by
!the City Commission with respect to ;
any Mader considered at these hear-'
ings, such person may need to enswe I
that a verbatim record includes thei
testimony and evidence upon which:
the appeal is to be based. The City
does not provide nor prepare such
record pursuant to F S. 286.0105.
CITY OF DELRAY BEACH
Chevelk D. Nubin, CMC
Ctly CIerS~
PUBLISH' Friday, August 10, 2007
Boca Raton/Defray Beach News
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
FROM: CITY MANAGER U
SUBJECT: AGENDA ITEM # I O ' 1- -REGULAR MEETING OF AUGUST 21, 2007
ORDINANCE NO 29-07 - "FPL FRANCHISE AGREEMENT"
DATE: AUGUST 17, 2007
ITEM BEFORE COMMISSION
This ordinance is before Commission for second reading for an ordinance replacing an existing
Florida Power and Light Company (FPL) Franchise Agreement that is set to expire in 2011.
BACKGROUND
At the first reading on August 7, 2007, the Commission passed Ordinance No. 29-07.
FUNDING SOURCE
N/A
RECOMMENDATION
Recommend approval of Ordinance No. 29-07 on second and final reading.
S:\City Ckrk\AGENDA COVER MEMOS\Ordinan« Agenda Memos\Ord 29-07 FPL Franchise Agreemrntdoc
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
DAVID T. HARDEN, CITY MANAGER
FROM: SUSAN A. RUBY, CITY ATTORNEY
DATE: JULY 23, 2007
SUBJECT: AGENDA ITEM # ~ ~ . ~ REGULAR MEETING OF AUGUST 7, 2007
FPL FRANCHISE ORDINANCE N0.29-07
ITEM BEFORE COMMISSION
Ordinance No. 29-07 replaces an existing FPL franchise agreement which is set to expire in 2011.
BACKGROUND
The new FPL franchise if approved by the City Commission will have a thirty (30) year duration (to
2037). The ordinance provides for a revised and simplified franchise fee calculation methodology.
The fee contained in the ordinance is 5.9% with no offset for property taxes paid. The current
ordinance provides fora 6% fee with the property tax offset. It is expected that increased revenues
will inure to the City and a more simplified calculation will be the result if this franchise ordinance
is adopted.
FUNDING SOURCE
N/A
RECOMMENDATION
City Staff recommends approval of Ordinance No. 29-07.
cc: Doug Smith, Assistant City Manager
Chevelle Nubin, City Clerk
Joe Safford, Finance Director
Tony Newbold
July 24, 2007
Ms. Susan Ruby
City Attorney
City of Delray Beach
100 N.W. 1st Avenue
Delray Beach, FL 33444
RE: Early Renewal of Delray Beach's Electric Franchise.
Dear Ms. Ruby:
I was able to attend the City's workshop regarding the impact of the proposed property
tax reduction and realizing that Delray Beach will be adversely affected. I asked myself
the question, how can I help?
Realizing that the Franchise Agreement expires in March of 2011, I thought that since
FPL has changed the formula used to calculate the franchise fees paid to the holder, why
not pursue early renewal now rather than at the end of the existing agreement. I therefore
had my accounting department run the numbers based on the new formula and
amazingly, and to my surprise, I learned that the City can realize an immediate cash flow
increase often percent on revenues currently received from the franchise as well as and
additional $449,858.00 in property tax savings. Under a new agreement, calculated
revenues would increase from $4,620,162.00 to $5,427,635.00.
The existing formula allows FPL to recover the property taxes paid to the City whereas
the new formula does not nor does the new formula pay you ninety percent of the
calculated revenues until the anniversary date when the account is trued up. I see this
opportunity of early renewal as a significant benefit to the City and would ask that you
encourage approval so that the City can receive the benefits of this new Agreement.
Thank you in advance for pursuing this great opportunity to increase the cash flow
revenues from the franchise as well as the significant savings from property taxes. Please
feel free to call on me for any additional information that you may need.
Sincerely,
Anthony L. Newbold
Area Manager, External Affairs
FPL
June 20, 2007
Mr. David T. Harden
City Manager
City of Delray Beach
100 N.W. 1 st Avenue
Delray Beach, FL 33444
RE: Early Renewal of Delray Beach's Electric Franchise.
Dear Mr. Harden:
FPL has enhanced the formula by which it calculates the franchise fee to be paid to the City of
Delray Beach and other municipalities and counties renewing or entering into new franchise
agreements with FPL. The new formula streamlines the process and generally results in increased
franchise fee payments to most municipalities, including the City of Delray Beach. This new
formula is found in Section 5(a) of the new agreement, while the old formula is found at Section 6
of the existing agreement.
Under the new agreement, the process of calculating and paying the franchise fees is streamlined
and simplified as follows:
• FPL pays 100% of the franchise fee on a monthly basis
• There is no need to true up the payments at the end of the year (under the existing franchise
FPL is obligated to make estimated payments at a rate of 90% per month with an annual true
up at the end of the franchise year)
• The new formula is simpler and will provide additional revenue
A significant difference between the existing franchise agreement and the new agreement is the
franchise fee rate. The existing franchise agreement involves a calculation resulting in FPL paying
franchise fees under a formula that is simply stated as follows:
Franchise fee + property taxes paid by FPL + permits/fees = 6% of specified revenue
Under the new franchise, FPL uses a simpler formula as follows:
Franchise fees + permits/fees = 5.9% of specified revenue
Because the new formula excludes the property taxes paid by FPL in calculating the 5.9%, the new
formula yields a higher franchise fee payment to the City of Delray Beach than the old formula
utilizing 6%.
The new formula used by FPL in calculating franchise fee payments does not affect property
taxes paid by FPL. FPL continues to pay its property taxes but will no longer include that amount
in calculating the franchise fees paid to the City.
Thank you for providing the time to explore the possibility of renewing the electric franchise early.
I am available for further discussions with you and others so that we can expedite the renewal, thus
allowing the City to benefit from the change in the franchise formula.
Sincerely,
Anthony L. Newbold
Area Manager, External Affairs
Cc: Ken Rubin, Esq.
ORDINANCE NO.29-07
AN ORDINANCE GRANTING TO FLORIDA POWER &
LIGHT COMPANY, ITS SUCCESSORS AND ASSIGNS,
AN ELECTRIC FRANCHISE, IMPOSING PROVISIONS AND
CONDITIONS RELATING THERETO, PROVIDING
FOR MONTHLY PAYMENTS TO THE CITY OF DELRAY
BEACH, AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Defray Beach, Florida recognizes
that the City of Defray Beach and its citizens need and desire the continued benefits of electric
service; and
WHEREAS, the provision of such service requires substantial investments of
capital and other resources in order to construct, maintain and operate facilities essential to the
provision of such service in addition to cosily administrative functions, and the City of Delray
Beach does not desire to undertake to provide such services; and
WHEREAS, Florida Power & Light Company (FPL) is a public utility which has
the demonstrated ability to supply such services; and
WHEREAS, there is currently in effect a franchise agreement between the City of
Defray Beach and FPL, the terms of which are set forth in City of Defray Beach Ordinance No.
11-81 passed and adopted March 10, 1981, and FPL's written acceptance thereof dated March
27, 1981 granting to FPL, its successors and assigns, a thirty (30) year electric franchise
("Current Franchise Agreement"); and
WHEREAS, FPL and the City of Delray Beach desire to enter into a new
agreement (New Franchise Agreement) providing for the payment of fees to the City of Dekay
Beach in exchange for the nonexclusive right and privilege of supplying electricity and other
services within the City of Delray Beach free of competition from the City of Delray Beach,
pursuant to certain terms and conditions, and
WHEREAS, the City Commission of the City of Delray Beach deems it to be
in the best interest of the City of Delray Beach and its citizens to enter into the New
Franchise Agreement prior to expiration of the Current Franchise Agreement;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA:
Section 1. There is hereby granted to Florida Power & Light Company, its
successors and assigns (hereinafter called the "Grantee"), for the period of 30 years from the
effective date hereof, the nonexclusive right, privilege and franchise (hereinafter called
"franchise") to construct, operate and maintain in, under, upon, along, over and across the
present and future roads, streets, alleys, bridges, easements, rights-of--way and other public
places (hereinafter called "public rights-of-way") throughout all of the incorporated areas, as
such incorporated areas may be constituted from time to time, of the City of Delray Beach,
Florida, and its successors (hereinafter called the "Grantor"), in accordance with the Grantee's
customary practice with respect to construction and maintenance, electric light and power
facilities, including, without limitation, conduits, poles, wires, transmission and distribution
lines, and all other facilities installed in conjunction with or ancillary to all of the Grantee's
operations (hereinafter called "facilities"), for the purpose of supplying electricity and other
2 ORD N0.29-07
services to the Grantor and its successors, the inhabitants thereof, and persons beyond the
limits thereof.
Section 2. The facilities of the Grantee shall be installed, located or relocated so as
to not unreasonably interfere with traffic over the public rights-of--way or with reasonable egress
from and ingress to abutting property. To avoid conflicts with traffic, the location or relocation
of all facilities shall be made as representatives of the Grantor may prescribe in accordance
with the Grantor's reasonable rules and regulations with reference to the placing and
maintaining in, under, upon, along, over and across said public rights-of--way; provided,
however, that such rules or regulations (a) shall not prohibit the exercise of the Grantee's right
to use said public rights-of--way for reasons other than unreasonable interference with motor
vehicular traffic, (b) shall not unreasonably interfere with the Grantee's ability to furnish
reasonably sufficient, adequate and efficient electric service to all of its customers, and (c) shall
not require the relocation of any of the Grantee's facilities installed before or after the effective
date hereof in public rights-of--way unless or until widening or otherwise changing the
configuration of the paved portion of any public right-of--way used by motor vehicles causes
such installed facilities to unreasonably interfere with motor vehicular traffic, Such rules and
regulations shall recognize that above-grade facilities of the Grantee installed after the effective
date hereof should be installed near the outer boundaries of the public rights-of--way to the
extent possible. When any portion of a public right-of--way is excavated by the Grantee in the
location or relocation of any of its facilities, the portion of the public right-of--way so excavated
shall within a reasonable time be replaced by the Grantee at its expense and in as good condition
as it was at the time of such excavation. The Grantor shall not be liable to the Grantee for any
cost or expense in connection with any relocation of the Grantee's facilities required under
subsection (c) of this Section, except, however, the Grantee shall be entitled to reimbursement
of its costs from others and as may be provided by law.
3 ORD N0.29-07
Section 3. The Grantor shall in no way be liable or responsible for any accident
or damage that may occur in the construction, operation or maintenance by the Grantee of its
facilities hereunder, and the acceptance of this ordinance shall be deemed an
agreement on the part of the Grantee to indemnify the Grantor and hold it harmless
against any and all liability, loss, cost, damage or expense which may accrue to the
Grantor by reason of the negligence, default or misconduct of the Grantee in the
construction, operation or maintenance of its facilities hereunder.
Section 4. All rates and rules and regulations established by the Grantee from time
to time shall be subject to such regulation as may be provided by law.
Section 5. As a consideration for this franchise, the Grantee shall pay to the
Grantor, commencing 90 days after the effective date hereof, and each month thereafter for the
remainder of the term of this franchise, an amount which added to the amount of all licenses,
excises, fees, charges and other impositions of any kind whatsoever (except ad valorem property
taxes and non-ad valorem tax assessments on property) levied or imposed by the Grantor
against the Grantee's property, business or operations and those of its subsidiaries during the
Grantee's monthly billing period ending 60 days prior to each such payment w>71 equal 5.9 percent of
the Grantee's billed revenues, less actual write~ffs, from the sale of electrical energy to residential,
commercial and industrial customers (as such customers are defined by FPL's tariff) within the
incorporated areas of the Grantor for the monthly billing period ending 60 days prior to each
such payment, and in no event shall payment for the rights and privileges granted herein exceed
5.9 percent of such revenues for any monthly billing period of the Grantee.
4 ORD N0.29-07
The Grantor understands and agrees that such revenues as described in the preceding
paragraph are limited, as in the existing franchise Ordinance No. 11-81, to the precise revenues
described therein, and that such revenues do not include, by way of example and not limitation: (a)
revenues from the sale of electrical energy for Public Street and Highway Lighting (seLVice for lighting
public ways and areas); (b) revenues from C-dler Sales to Public Authorities (service with eligibility restricted
to governmental entities); (c) revenues from Sales to Railroads and Railways (service supplied for
propulsion of electric transit vehicles); (d) revenues from Sales for Resale (service to other utilities for
resale purposes); (e) franchise fees; (f) Late Payment Charges; (g) Field Collection Charges; (h)
other service charges.
Section 6. If doting the term of this franchise the Grantee enters into a
franchise agreement with any other municipality located in Palm Beach County, Florida, where the
number of Grantee's active electrical customers is equal to or less than the number of Grantee's
active electrical customers within the incorporated area of the Grantor, the terms of which provide
for the payment of franchise fees by the Grantee at a rate greater than 5.9% of the Grantee's residential,
commercial and industrial revenues (as such customers are defined by FPL's tariff), under the same
terms and conditions as specified in Section 5 hereof, the Grantee, upon written request of the
Grantor, shall negotiate and enter into a new franchise agreement with the Grantor in which the
percentage to be used in calculating monthly payments under Section 5 hereof shall be no greater than
that percentage which the Grantee has agreed to Use as a basis for the calculation of payments to the
other Palm Beach County municipality, provided, however, that such new franchise agreement shall
include additional benefits to the Grantee, in
addition to all benefits provided herein, at least equal to those provided by its franchise agreement
5 ORD NO. 29-07
with the other Palm Beach County municipality. Subject to all limitations, terms and conditions
specified in the preceding sentence, the Grantor shall have the sole discretion to determine the
percentage to be used in calculating monthly payments, and the Grantee shall have the sole discretion to
detemune those benefits to which it would be entitled, under any such new franchise agreement.
Section 7. As a further consideration, during the term of this franchise or any
extension thereof, the Grantor agrees: (a) not to engage in the distribution and/or sale, in competition
with the Grantee, of electric capacity and/or electric energy to any ultimate consumer of electric
utility service (herein called a "retail customer ~ or to any electrical distribution system established
solely to serve any retail customer formerly served by the Grantee, (b) not to participate in any
proceeding or contractual arrangement, the purpose or terms of which would be to obligate the
Grantee to transmit and/or distribute, electric capacity and/or electric energy from any third
party(ies) to any other retail customers faciliry(ies), and (c) not to seek to have the Grantee transmit
and/or distribute electric capacity and/or electric energy generated by or on behalf of the Grantor at
one location to the Grantor's faciliry(ies) at any other location(s). Nothing specified herein shall
prohibit the Grantor from engaging with other utilities or persons in wholesale transactions which are
subject to the provisions of the Federal Power Act
Nothing herein shall prohibit the Grantor, if permitted by law, ~ from purchasing electric
capacity and/or electric energy from any other person, or (u) from seeking to have the Grantee transmit
and/or distribute to any faciliry(es) of the Grantor electric capacity. and/or electric energy
purchased by the Grantor from any other person; provided,
ORD N0.29-07
however, that before the Grantor elects to purchase electric capacity and/or electric energy from
any other person, the Grantor shall notify the Grantee. Such notice shall include a summary of the
specific rates, temps and conditions which have been offered by the other person and identify the
Grantor's facilities to be served under the offer. The Grantee shall thereafter have 90 days to
evaluate the offer and, if the Grantee offers rates, terms and conditions which are equal to or better
than those offered by the other person, the Grantor shall be obligated to continue to purchase from
the Grantee electric capacity and/or electric energy to serve the previously-identified facilities of the
Grantor for a term no shorter than that offered by the other person. If the Grantee does not agree to
rates, terms and conditions which equal or better the other persons offer, all of the terms and
conditions of this franchise shall remain in effect
Section 8. If the Grantor grants a right, privilege or faanchise to any other person or
otherwise enables any other such person to construct, operate or maintain electric light and power
facilities within any part of the incorporated areas of the Grantor in which the Grantee may lawfully
serve or compete on terms and conditions which the Grantee determines are more favorable
than the terms and conditions contained herein, the Grantee may at any tune thereafter tem~inate
this ftaxichise if such terms and conditions are not remedied within the time period provided
hereafter. The Grantee shall give the Grantor at least 60 days advance written notice of its intent to
terminate. Such notice shall, without prejudice to any of the rights reserved for the Grantee herein,
advise the Grantor of such terms and conditions that it considers more favorable. The Grantor shall
then have 60 days in which to correct or otherwise remedy the terms and conditions complained
of by the Grantee. If the Grantee determines that such terms or conditions are not remedied by
the Grantor within said time period, the Grantee may terminate this franchise agreement by
delivering written notice to the Grantors Clerk and termination shall be effective on the date of
delivery of such notice.
'7 ORD N0.29-07
Section 9. If as a direct or indirect consequence of any legislative, regulatory or other
action by the United States of America or the State of Florida (or any deparnnent, agenry, authority,
instrumentality or political subdivision of either of them) any person is permitted to provide electric
service within the incorporated areas of the Grantor to a customer then being served by the
Grantee, or to any new applicant for electric service within any part of the incorporated areas of the
Grantor in which the Grantee may lawfully serve, and the Grantee determines that its obligations
hereunder, or otherwise resulting from this franchise in respect to rates and service, place it at a
competitive disadvantage with respect to such other person, the Grantee may, at any time after the
taking of such action, terminate this franchise if such competitive disadvantage is not remedied within the
time period provided hereafter. The Grantee shall give the Grantor at least 90 days advance
written notice of its intent to terminate. Such notice shall, without prejudice to any of the rights reserved
for the Grantee herein, advise the Grantor of the consequences of such action which resulted in the
competitive disadvantage. The Grantor shall then have 90 days in which to correct or otherwise
remedy the competitive disadvantage. If such competitive disadvantage is not remedied by the
Grantor within said time period, the Grantee may terminate this franchise agreement by
delivering written notice to the Grantor's Clerk and teanination shall take effect on the date of delivery
of such notice.
Section 10. Failure on the part of the Grantee to comply in any substantial respect
with any of the provisions of this franchise shall be grounds for forfeiture, but no
g ORD N0.29-07
such forfeiture shall take effect if the reasonableness or propriety thereof is protested by the Grantee
until there is final detP+rnination (after the expiration or exhaustion of all rights of appeal) by a court of
competent jurisdiction that the Grantee has failed to comply in a substantial respect with any of the
provisions of this franchise, and the Grantee shall have six months after such final determination to make
good the default before a forfeiture shall result with the right of the Grantor at its discretion to grant
such additional time to the Grantee for compliance as necessities in the case require.
Section 11. Failure on the part of the Grantor to comply in substantial respect with any of
the provisions of this ordinance, including but not limited to: (a) denying the Grantee use of public
rights-of--way for reasons other than unreasonable interference with motor vehicular traffic; (b) imposing
conditions for use of public rights-of--way contrary to Florida law or the teens and conditions of this
franchise; (c) unreasonable delay in issuing the Grantee a use permit, if any, to construct its facilities in
public rights-of--way, shall constitute breach of this franchise and entitle the Grantee to withhold all
or part of the payments provided for in Section 5 hereof until such time as a use permit is issued or a
court of competent jurisdiction has reached a final determination in the matter. The Grantor
recogYUZes and agrees that nothing in this fi~nchise agreement constitutes or shall be deemed to
constitute a waiver of the Grantee's delegated sovereign right of condemnation and that the
Grantee, in its sole discretion, may exercise such right
Section 12. The Grantor may, upon reasonable notice and within 90 days after each
anniversary date of this franchise, at the Grantor's expense, examine the records of the Grantee relating
to the calculation of the franchise payment for the year preceding such anniversary date. Such
examination shall be during nom~al business hours at the
9 ORD N0.29-07
Grantee's office where such records are maintained. Records not prepared by the Grantee in the
ordinary course of business may be provided at the Grantors expense and as the Grantor and the
Grantee may agree in writing. Infom~ation identifying the Grantee's customers by name or their electric
consumption shall not be taken from the Grantee's premises. Such audit shall be impartial and all
audit findings, whether they decrease or incxease payment to the Grantor, shall be reported to the
Grantee. The Grantor's right to examine the records of the Grantee in accordance with this Section shaIl
not be conducted by any third party employed by the Grantor whose fee, in whole or part, for
conducting such audit is contingent on findings of the audit.
Grantor waives, settles and bars all claims relating in any way to the amounts paid by the
Grantee under the Current Franchise Agreement embodied in Ordinance No. 11-81.
Section 13. The provisions of this ordinance are interdependent upon one another,
and if any of the provisions of this ordinance are found or adjudged to be invalid, illegal, void or of no
effect, the entire ordinance shall be null and void and of no force or effect.
Section 14. As used herein "person" means an individual, a partnership, a corporation,
a business trust, a joint stock company, a trust, an incorporated association, a joint venture, a
governmental authority or any other entity of whatever nature.
Section 15. Ordinance No. 11-81, passed and adopted March 10, 1981 and all other
ordinances and parts of ordinances and all resolutions and parts of resolutions in conflict herewith,
are hereby repealed.
10 ORD NO. 29-07
Section 16. As a condition precedent to the taking effect of this ordinance, the Grantee
shall file its acceptance hereof with the Grantor's Clerk within 30 days of adoption of this ordinance. The
effective date of this ordinance shall be the date upon which the Grantee files such acceptance..
PASSED on first reading this day of , 2007.
ATTEST:
City Clerk
First Reading
Second Reading
MAYOR
11 ORD NO.29-07