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HomeMy WebLinkAboutOrdinance No. 98-1055 ORDINANCE NO. ~-/d~)~.~ AN ORDINANCE WHEREBY THE CITY OF THE COLONY, TEXAS, AND COSERV, L.L.C. AGREE THAT, FOR THE PURPOSE OF OPERATING ITS COMMUNICATIONS BUSINESS, THE TELEPHONE COMPANY SHALL CONSTRUCT, ERECT, BUILD, EQUIP, OWN, MAINTAIN AND OPERATE IN, ALONG, UNDER, OVER AND ACROSS THE STREETS, AVENUES,' ALLEYS, BRIDGES, VIADUCTS AND PUBLIC GROUNDS OF THE CITY, SUCH POSTS, POLES, WIRES, CABLES, CONDUITS AND OTHER APPLIANCES, STRUCTURES AND FIXTURES NECESSARY OR CONVENIENT FOR RENDITION OF TELEPHONE AND OTHER COMMUNICATION SERVICES IN SAID CITY AND FOR CONDUCTING A GENERAL LOCAL AND LONG-DISTANCE TELEPHONE BUSINESS; PRESCRIBING THE CONDITIONS GOVERNING THE USE OF PUBLIC RIGHTS-OF-WAY FOR THE TELEPHONE COMPANY'S COMMUNICATION BUSINESS; PRESCRIBING THE ANNUAL COMPENSATION DUE THE CITY UNDER THIS ORDINANCE; PROVIDING AN INDEMNITY CLAUSE; SPECIFYING GOVERNING LAWS; PROVIDING FOR ASSIGNMENT; FOR A PERIOD OF AGREEMENT; FOR FLrII.rRE CONTINGENCIES; FOR REPEAL OF CONFLICTING ORDINANCES; FOR RELEASE OF ALL CLAIMS UNDER PRIOR ORDINANCES; FOR ALTERNATE DISPUTE RESOLUTION; FOR A LIMITATIONS PERIOD; FOR VENUE; AND FOR METHOD OF ACCEPTANCE. WHEREAS, CoServ, L.L.C., hereinafter referred to as the Telephone Company, is now authorized by the Texas Public Utility Commission to engage in the telecommunications business in the State of Texas and in furtherance thereof, will erect and maintain certain items of its physical plant in the City of The Colony, Texas, hereinafter referred to as the City, pursuant to such rights as have been granted it by and under the laws of the State of Texas, and subject to the reasonable exercise of the police powers granted by and under said laws to the City: and WHEREAS, it is recognized by the parties hereto that changes in the telecommunications industry, changes in technology, changes in state and federal law, and changes in the accounting practices mandated by the uniform System of Accounts promulgated by the Federal Communications Commission ("FCC"), along with regulatory requirements of the Public Utility Commission of Texas ("PUC"), have caused the traditional method of determining the amount of compensation to municipalities to become impractical for communications utilities. In order to address these issues in a manner beneficial to both the City and the Telephone Company, the City and the Telephone Company have chosen the method of determining the amount of compensation provided for in this Ordinance to eliminate the expense and time related to audits, to achieve administrative simplicity, to provide the City with predictable revenues and an oppommity for growth and to avoid the expense and delays of litigation which could be necessary to resolve any issues in controversy between the parties; and WHEREAS, it is to the mutual advantage of both the City and the Telephone Company that an agreement should be entered into between the Telephone Company and the City establishing the conditions under which the Telephone Company shall maintain and construct its physical plant in the public rights-of-way within the City's corporate limits in the future; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, THAT: SECTION 1. DEFINITIONS Whenever used in this Ordinance, the following words and terms shall have the definitions and meanings provided in this section: A. City_: The City of The Colony, Texas B. Basic Local Telecommunication Services shall include: (1) flat rate residential and business local exchange telephone service, including primary directory listings; (2) tone dialing services; (3) access to operator services; (4) access to directory assistance services; (5) access to 911 service where provided by a local authority or dual party relay service; (6) the ability to report service problems seven days a week; (7) lifeline and tel-assistance services; and (8) any other service the Public Utility Commission of Texas, after a hearing, determines should be included in Basic Local Telecommunication Services. C. Facilities: All Telephone Company duct spaces, manholes, poles, conduits, underground and overhead passageways, and other equipment, structures and appurtenances and all associated Transmission Media, which are located in the City Rights-of-Way. D. Telecommunication Services: All services, of any nature, offered for sale by the Telephone Company to subscribers in the City, which services are delivered to such subscribers by transmission over the Telephone Company's Transmission Media. E. Ri~,hts of Way: All present and future streets, avenues, highways, alleys, bridges, viaducts and public grounds within the city limits of the City. F. Telephone Company: CoServ, L.L.C. G. Transmission Media: All Telephone Company cables, fibers, wires or other physical devices used to transmit and/or receive communication signals for telecommunication purposes whether analog, digital or of other characteristics, and whether for voice, video, or data or other telecommunication purposes, which are physically located in the City Rights-of-Way. SECTION 2. CONSTRUCTION AND MAINTENANCE OF TELEPHONE PLANT AND SERVICE Pursuant to the laws of the State of Texas, the Telephone Company has the non- exclusive right and privilege to use and occupy the public rights-of-way in the City for the delivery of Telecommunications Services and the operation of a telecommunications system. ~ The Telephone Company's Facilities and Transmission Media used in or incident to the provision of Telecommunications Services and to the maintenance of a telecommunications business by the Telephone Company in the City as now constructed shall be subject to such changes as under the conditions prescribed in this Ordinance may be considered necessary to the public health and safety by the City in the exercise of its lawful police powers and such changes and extensions as may be considered necessary by the Telephone Company in the pursuit of its telecommunications business. The terms of this Ordinance shall apply throughout the City, and shall include the provision of Telecommunications Services in any newly annexed areas upon the effective date of such annexation. SECTION 3. SUPERVISION BY CITY OF LOCATION OF POLES AND CONDUITS A. All poles to be placed shall be of sound material'and reasonably straight, and shall be so set that they will not interfere with the flow of water to any gutter or drain, and so that the same will interfere as little as practicable with the ordinary travel on the street or sidewalk. The location and route of all poles, stubs, guys, anchors, conduits, cables and any other Facilities to be placed and constructed by the Telephone Company in the construction and maintenance of its telecommunications system in the City, and the location of all conduits to be laid by the Telephone Company within the limits of the City under this Ordinance, shall be subject to the reasonable and proper regulation, control and direction of the City Council or of any City official to whom such duties have been or may be delegated. B. The City expressly reserves the right to change the grade, install, maintain, repair, relocate, or widen the public streets, sidewalks, bikeways, alleys, public thoroughfares, highways, landscaping, and public way and places within the present limits of the City and within said limits as same may from time to time by extended, and the Telephone Company shall relocate or place underground, at its own expense, its Facilities and Transmission Media, in order to accommodate the installation, maintenance, repair, relocation widening, or changing of the grade of any such public street, sidewalk, bikeway, alley, public thoroughfare, highway or public ways, including if necessary relocating such Facilities and Transmission Media to a sufficient distance from the edge of the pavement to permit a reasonable work area for machinery and individuals engaged in installing, relocating, maintaining, repairing, widening, or changing the grade of any public street, sidewalk, bikeway, alley, public thoroughfare, highway or public way. C. Whenever by reason of changes in the grade of a thoroughfare, street or other public right-of-way or in the location or manner of constructing a water pipe, gas pipe, sewer, or other aboveground or underground structure, it is deemed necessary by the City to remove, alter, change, adapt, or conform the underground or aboveground Facilities of the Telephone Company, the Telephone Company shall make the alterations as soon as practicable when ordered in writing by the City without claim for reimbursement or damages against the City, its officials, officers, employees and agents. D. Whenever it shall be necessary to require Telephone Company to alter, change, adapt, or conform its Facilities within the Right-of-Way, such alterations or changes shall be made promptly, with consideration given to the magnitude of such alterations or changes, without claim for reimbursement or damages against the City, its officials, officers, employees and agents. If any such requirements impose a financial hardship upon the Telephone Company, the Telephone Company shall have the right to present alternative proposals to the City, and the City shall give due consideration to any such alternative proposals. If the City requires the Telephone Company to adapt or conform its Facilities to enable any other entity or person, except the City, to use, or to use with greater convenience, Rights-of-Way or public property, Telephone Company shall not be required to make any such changes until such other entity or person shall reimburse or made arrangements satisfactory to Telephone Company to reimburse the Telephone Company for any loss and expense caused by or arising out of such change; provided, however, that the City shall never be liable for such reimbursement. Nothing in this Ordinance is intended to add to or detract from any authority granted by the Legislature of the State of Texas to the City. E. All work done in connection with the construction, expansion, reconstruction, maintenance or repair of the Facilities and Transmission Media shall be subject to and governed by all laws, rules, and regulations of the City. F. The City reserves the right to lay and permit to be laid, sewer, gas, water, and other pipe lines or cables and conduits, and to do and permit to be done, any underground and overhead work that may be deemed_ necessary or proper by the City in, across, along, over or under any public street, alley, or right-of-way occupied by Telephone Company, and to change any curb or sidewalk or the grade of any street. In permitting such work to be done, the City shall not be liable to Telephone Company for any damages not directly caused by the negligence of the City; provided, however, nothing herein shall relieve any other person or entity from liability for damage to the Facilities. SECTION 4. ATTACHMENTS TO POLES AND SPACE IN DUCTS Nothing contained in this Ordinance shall be construed to require or permit any pole attachments for electric light or power wires or communications facilities or systems not provided by the Telephone Company to be attached to the Telephone Company's poles or other Facilities or placed in the Telephone Company's conduit. If the City desires pole attachments for electric light or power wires or communications facilities or systems not provided by the Telephone Company, or if the City desires to place communications facilities or systems for its internal use not provided by the Telephone Company in any Telephone Company duct, then a further separate, noncontingent agreement shall be prerequisite to such attachment(s) or such use of any duct by the City. Nothing contained in this Ordinance shall obligate or restrict the Telephone Company in exercising its rights voluntarily to enter into pole attachment, pole usage, joint ownership or other wire space or facilities agreements with light anclfor power companies or with other wire-using companies which are authorized by the City to operate within the City. Notwithstanding any other provision of this Agreement, subject to reasonable availability and agreement between the parties conceming maintenance, access, liabilities, indemnities, security and other relevant issues, the Telephone Company may be required by the City to share duct trench space owned and maintained by the Telephone Company or by another person or entity upon reasonable, non-discriminatory terms and at fair market value. The intent of this section is to encourage shared use of the infrastructure and decrease excavation of the City's Rights-of-Way. Any facilities of other persons or entities that are attached to or within the Telephone Company's Facilities shall be placed, replaced, maintained and removed in a safe manner so that the attachment does not interfere unnecessarily with the erection, replacement, operation, repair or maintenance of the Facilities or Transmission Media or other persons or entities using the same Facilities. The Telephone Company shall not be required to share trench space of any other person or entity franchised by the City, if it can be satisfactorily shown that thereby the Telephone Company will be subjected to increased risks of interruption to its service or to increased liability for accidents, or if the facilities of such other person or entity are not of the character, design and construction required by, or are not being maintained in accordance with current practice. SECTION 5. STREETS TO BE RESTORED TO GOOD CONDITION The surface of any street, avenue, alley, highway, viaduct or public ground within the City disturbed by the Telephone Company in building, constructing, renewing, or maintaining its telecommunications system shall be restored within a reasonable time after completion of the work in compliance with the applicable provisions of the Code of Ordinances and maintained to the satisfaction of the City Council, or of any City official to whom such duties have been or may be delegated, for a period of one (1) year following completion of the restoration, after which time responsibility for the maintenance shall revert to the City; provided, that Telephone Company shall have no duty or obligation to perform any such maintenance prior to receipt of written notice from City as to the required maintenance. No such street, avenue, alley, highway, viaduct or public ground shall be encumbered for a longer period than shall be necessary to execute the work. SECTION 6. TEMPORARY REMOVAL OF AERIAL WIRES The Telephone Company on the request of any person shall remove or raise or lower its wires within the City temporarily to permit the moving of houses or other bulky structures. The expense of such temporary removal, raising or lowering of wires shall be paid by the benefitted party or parties, and the Telephone Company may require such payment in advance. The Telephone Company shall be given not less than forty-eight (48) hours advance notice to arrange for such temporary wire changes. The clearance of wires above ground shall conform to the basic standards of the National Electrical Safety Code, National Bureau of Standards, United States Department of Commerce, as promulgated at the time of erection thereof. SECTION 7. TREE TRIMMING In the pursuit of maintaining its telecommunication system, the Telephone Company, its contractors, agents, successors and assigns shall have the right to trim trees upon and overhanging the streets, avenues, alleys, bridges, viaducts and 'public grounds of the City, so as to prevent the branches of such trees from coming into contact with the wires, cables or other Facilities of the Telephone Company. SECTION 8. COMPENSATION TO THE CITY A. For the reason that the Rights-of-Way to be used and occupied by the Telephone Company in the provision of Telecommunications Services within the boundaries of the City are valuable public properties, acquired and maintained by the City at great expense to its taxpayers, and because the grant to the Telephone Company of the use and occupancy of said Rights-of-Way is a valuable property right without which the Telephone Company would be required to invest substantial capital in right-of-way costs and acquisitions, the Telephone Company agrees to pay to the City an Annual Fee for each year during the term of this Agreement. B. The initial Annual Fee shall be four percent (4%) of the Telephone Company's Gross Revenues from Basic Local Telecommunication Services provided and billed to subscribers for Telecommunication Services within the City limits. As used in this paragraph 8(b) the term "Gross Revenues" shall mean the aggregate amount of all sales and charges calculated in accordance with Generally Accepted Accounting Principles that are attributable to Basic Local Telecommunication Services provided by the Telephone Company within the City during any period less discounts, credits, refunds, sales taxes, and uncollectible accounts actually charged off during the period. These services will remain in the base whether they are regulated or deregulated. C. It is the intent of the City that all similarly situated providers of telecommunications services within the City shall be required to pay compensation to the City for the use of the City's Rights-of-Way on a competitively neutral and non-discriminatory basis. Accordingly, if a subsequent franchise to another similarly situated telecommunications utility provider providing similar telecommunication services contains provisions which if applied to Telephone Company would result in Telephone Company paying less compensation to City, the City and Telephone Company shall immediately enter into negotiations regarding an amendment to the compensation provisions of this Agreement so as to make this Agreement competitively neutral and non-discriminatory with respect to such other agreement. D. The Annual Fee payment shall be made in quarterly payments on or before the 20~ day of the month following the end of the preceding calendar quarter during the term of this Agreement. The first quarterly payment shall be due on A quarterly payment shall be due on the 20~ day of each January, April, July, and October thereafter during the term of this Agreement. All payments shall be made to the City by draft payable to the City of The Colony. The sum of the quarterly payments is the Annual Fee for the year. With the payment for the last calendar quarter of each year, the Telephone Company shall additionally provide the City with a report showing the Gross Revenues received by the Telephone Company for Basic Local Telecommunication Services. E. The acceptance of any statement or payment shall not estop the City or the Telephone Company from asserting that the amount paid is not the amount due or from recovering any deficit or overpayment by any lawful proceeding. F. The payment of the Annual Fee by the Telephone Company shall be in lieu of business licenses, permit fees for work in the Rights-of-Ways, registration fees, special taxes on poles or conduits and other fees sought to be assessed on the Telephone Company's use of the Rights-of-Way under this Agreement, but shall not be in lieu of ad valorem taxes; provided, however, that notwithstanding any other provision of this Agreement, nothing in this franchise shall be construed to prohibit the City from levying the usual general or special ad valorem taxes which the City is authorized to levy and impose upon real and personal property, general sales and use taxes, assessments for public improvements, and sums to which the City may be entitled under Section 51.006 of the Public Utility Regulatory Act.. There shall be no deduction allowed for ad valorem taxes against the Annual Fee. G. Telephone Company shall file annually with the City no later than one hundred and twenty (120) days after the end of the Grantee's fiscal year, a statement of Gross Revenues (for that year) attributable to the provision of Basic Local Telecommunication Services within the City pursuant to this Agreement. This statement shall present, in a form prescribed by the City, a detailed breakdown of Gross Revenue for the year. Telephone Company shall provide the City with access at reasonable times and for reasonable purposes, to examine, audit, review, its books, accounts, documents, maps, plans and other records of Grantee pertaining to this agreement ordinance. Grantee shall fully cooperate in making available its records and otherwise assisting in these activities. H. Any transactions which have the effect of circumventing payment of required fees and/or evasion of payment of fees by non-collection or non-reporting of Gross Revenue, bartering, or any other means which evade the actual collection of revenues for business pursued by Grantee are prohibited. SECTION 9. SUCCESSORS AND ASSIGNS The rights, powers, limitations, duties and restrictions herein provided for shall inure to and be binding upon the parties hereto and upon their respective successors and assigns. This Ordinance and any rights or privileges hereunder shall not be assigned, transferred or otherwise conveyed by Telephone Company without the express prior written consent of the City, which consent shall not be unreasonably withheld. Such consent shall be by an ordinance which shall recite the terms and conditions, if any, upon which such consent is given. Should Telephone Company sell, assign, transfer, convey or otherwise dispose of any of its rights or its interests under this agreement ordinance, or attempt to do so, in violation of this requirement to obtain prior consent, the City may, after notice and reasonable opportunity to cure, deem such transfer as a material breach in accordance with Section 22, revoke this Agreement for default, in which event all rights and interest of Telephone Company shall cease and no purported sale, assignment, transfer or conveyance shall be effective. Plant and Facilities owned by Telephone Company located within public property shall never be leased or subleased to a provider or reseller of similar services unless such provider or seller has a similar franchise or is otherwise authorized to conduct business in The Colony under state or federal law. SECTION 10. PERIOD OF AGREEMENT This agreement shall be in full force and effect for the period beginning with the effective date hereof and ending five (5) years after such date. This Ordinance may be extended for an additional five (5) year period if mutually agreed to in writing by both parties. SECTION 11. FUTURE CONTINGENCIES Notwithstanding anything to the contrary herein, the parties agree to meet and negotiate in good faith to adjust the fees and make other appropriate modifications to this (Ordinance) as may be commercially reasonable under the circumstances if: A. at that time the provision regarding the fees charged or any other provision in this Ordinance is no longer commercially reasonable or competitive under the circumstances then existing; B. there has been a change in the rules, regulations or other laws which materially impact (1) upon the providing of utility services within towns and cities, or (2) upon the use of public right-of-ways, or (3) upon the rights, duties or obligations of the parties to franchise agreements such as this Ordinance; C. this Ordinance or any part of this Ordinance, including any procedure provided or charge imposed becomes or is declared or determined to be excessive, unrecoverable, unenforceable, void or unlawful by an administrative authority or a court of final jurisdiction. SECTION 12. GOVERNING LAW A. This Ordinance shall be construed in accordance with the laws of the State of Texas. B. This Ordinance shall be construed and deemed to have been negotiated at arms length and drafted by the combined efforts of the City and the Telephone Company. SECTION 13. ALTERNATE DISPUTE RESOLUTION A. Notwithstanding any other provision of this Ordinance, the Parties hereto agree that any claim, cause of action or other dispute based upon or arising out of this Ordinance (a "dispute") shall be conducted, decided, determined and/or resolved pursuant to and in accordance with the provisions of this Section. The parties desire to resolve disputes arising out of this Ordinance without litigation. Accordingly, in the event of any dispute hereunder, the Parties hereto agree to attempt in good faith to resolve their dispute between themselves. At the written request of a party, each party will appoint a knowledgeable, responsible representative to meet and negotiate in good faith to. resolve any dispute arising under this Ordinance. The parties intend that these negotiations be conducted by non-lawyer, business representatives. B. Except for action seeking a temporary restraining order or injunction related to the purposes of this Ordinance, or suit to compel compliance with this dispute resolution process, the parties agree to use the following alternative dispute resolution procedure, and also agree not to sue any party to this Ordinance with respect to any controversy or claim arising out of or relating to this Ordinance or its breach prior to exhausting the procedures set out in this section. C. If the Parties are unable to settle their dispute within sixty (60) days of the initial request, either party may, on written notice to the other party, initiate non-binding mediation of the dispute before a single mediator in Denton County, Texas mutually agreeable to the parties. Mediation is a forum in which an impartial person, the mediator, facilitates communication between the Parties to promote reconciliation, settlement, or understanding among them. A mediator may not impose his own judgment on the issues for that of the parties. Unless expressly authorized by the parties, the mediator may not disclose to either party information given in confidence by the other and shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute. Unless the parties agree otherwise, all matters, including the conduct and demeanor of the parties and their counsel during mediation, are confidential and shall be inadmissible as settlement discussion pursuant to Rule 408 of the Federal Rules of Evidence or the applicable state roles. The mediator shall be selected by agreement of the parties within thirty (30) days after each party first requests mediation of the other. If a single mediator cannot be agreed upon, then each party shall select its own mediator from those on the Judicial Arbitration and Mediation Services, Inc. approved list; those two mediators will then select a third independent mediator who will conduct the mediation session(s). The mediator's fees will be borne equally by both parties. In the event mediation is requested, the applicable statutes of limitations shall be automatically tolled until the mediator declares an impasse. In the event mediation fails, the parties may then resort to means outside the scope of this Section. SECTION 14. LIMITATIONS PERIOD The City and the Telephone Company mutually agree that any dispute, claim or cause of action one party may have against the other party arising from or in any way related to this Agreement must be brought to the attention of the other party, by written notice received no later than four (4) years from the date of the act or omission giving rise to the dispute, claim or cause of action; otherwise, such dispute, claim or cause of action shall be waived and the party asserting such dispute, claim or cause of action shall be barred from pursuing the same. 10 SECTION 15. INDEMNITY The Telephone Company shall indemnify the City, its officials, officers, employees and agents (together, for purposes of this Section 15, the "City") against, and hold the City harmless from any and all liability, actions, causes of action, lawsuits, judgments, claims, damages, costs, fees or expenses (including reasonable attorney's fees and costs or expenses incidental to the investigation and defense of claims and lawsuits) (together, "Damages") for any injury to or the death of any person or damage to or destruction of any property to the extent such Damages result from negligent or other wrongful acts or omissions of the Telephone Company, its officers, employees, subcontractors and agents under this franchise (including, but not limited to, the construction, reconstruction, expansion, repair, maintenance, use, operation, or removal of the Telephone Company's Facilities or the conduct or operation of the Telephone Company's business). This provision is not intended to create a cause of action or liability for the benefit of third parties but is solely for the benefit of the Telephone Company and the City. Notwithstanding the above provision, the City and the Telephone Company each waives all claims for Damages against the other to the extent the Damage is covered by insurance of either party. No indemnity will be provided for Damages otherwise covered by insurance of the indemnified party nor shall indemnity be provided to a party for its own negligence or other wrongful act or omission. The provisions and the obligations of this Section 15 shall survive the termination of this franchise. SECTION 16. REPEAL OF CONFLICTING PROVISIONS To the extent that another ordinance of the City or another agreement between the City and the Telephone Company conflicts with the provisions of this Ordinance, the terms of this Ordinance shall control. SECTION 17. VENUE Venue for any proceeding under this Agreement shall be in Denton County, Texas. SECTION 18. NOTICE For any purpose related to this Ordinance, notice to the City shall be to: City Manager City of The Colony, Texas 5151 North Colony Boulevard. The Colony, Texas 75056 11 Notice to Telephone Company shall be to: President CoServ, L.L.C. 3501 FM 2181 Corinth, Texas 76205 Notice will be effective upon delivery at the above addresses until the City or Telephone Company notifies the other, in writing, of a change of address. SECTION 19. ADDITIONAL AUTHORITY REQUIRED The Telephone Company is not authorized to provide cable television service as a cable operator in the City under this Ordinance, but must f'u'st obtain a franchise from the City for that purpose, under such terms and conditions as may be required by law. SECTION 20. LIABILITY INSURANCE A. Minimum Coverage. Simultaneous with the acceptance of this franchise by Telephone Company as set forth in Section 21 hereof, Telephone Company shall file with the City Manager and shall maintain throughout the term of this fi'anchise, at its sole cost, a policy of commercial general liability as well as other liability insurance in the amounts set forth below, issued by insurance companies duly authorized to do business in the State of Texas and acceptable to the City insuring the City and Telephone Company with respect to the operation of the Telephone Company's business and the installation, construction, reconstruction, maintenance, repair, use, operation and removal of Telephone Company's Facilities. The amounts designated herein are minimum requirements and do not establish the limits of the franchisee's liability: 1) Commercial General Liability: One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. 2) Automobile Liability: One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and property damage. 3) Worker's Compensation and Employers Liability: Workers' Compensation limits statutory for the State of Texas and Employers Liability limits of One Million Dollars ($1,000,000.00) per accident. 4) Excess and Umbrella Liability Insurance in a form following the underlying coverages in an amount of One Million Dollars ($1,000,000.00) each occurrence and One Million Dollars ($1,000,000.00) aggregate. 12 B. Notice of Cancellation or Reduction. Such liability_ insurance shall contain the provisions that written notice of expiration, cancellation, reduction or material change in coverage of the policy shall be delivered to the City Manager and to Telephone Company at least thirty (30) days in advance of the effective date thereof. C. Term. Such liability insurance shall be kept in full force and effect by Telephone Company during the existence of this franchise and thereafter for a period of not less than 12 months. D. Review. City reserves the right to review the insurance requirements contained herein and to reasonably adjust coverages and limits when deemed necessary and prudent by the City. E. Additional Requirements. All such insurance shall name the City as an additional insured and contain a waiver of subrogation endorsement in favor of the City. Certified copies of all of such policies shall be delivered to the City upon the execution of this Agreement; provided, however, that the City, in its sole discretion and in lieu of certified copies of such policies, may permit the delivery of certificates of insurance together with the declaration page of such policies, along with the endorsement naming the Owner as an additional insured. SECTION 21. RULES AND REGULATIONS A. The City may establish, after reasonable notice and hearing such rules and regulations as may be in the public interest regarding Telephone Company operations within the City. B. In order to ascertain relevant facts, the City shall have full power and authority from the Telephone Company to (i) inspect, or cause to be inspected, the books and records of Telephone Company, (ii) inventory and appraise, to cause to be inventoried or appraised, the property of Telephone Company within the City, and (iii) obtain access to relevant books and records of Telephone Company. SECTION 22. VIOLATIONS If the City has reason to believe that Telephone Company is in violation of this Ordinance, the City shall notify Telephone Company in writing of the violation, setting forth the nature of such violation. Within ten (10) days of receipt of such notice, Telephone Company shall respond in writing to provide explanation or documentation to support that the violation did not occur. Telephone Company shall be allowed thirty (30) days to cure violations after written notice is received from the City. 13 Upon evidence being received by the City that any violation of this Ordinance, any City Charter provisions, or any ordinances lawfully regulating Telephone Company in the construction and operation of its Facilities is occurring, or has occurred, the City may cause an investigation to be made. If the City finds that such a violation exists or has occurred, the Telephone Company shall take appropriate steps to comply with the terms of this Ordinance and any lawful regulation. Should Telephone Company fail to comply, after notice and reasonable opportunity to cure, then the City may take any action authorized by law, including forfeiture of this agreement in the event of a substantial breach under the termination provisions of this Ordinance and a suit in court to compel compliance. If, in any such proceeding, default is finally established, Telephone Company shall be required to pay to the City the reasonable expenses incurred in the prosecution of such suit and all the City's damages and costs (including attorney's fees), but Telephone Company shall be allowed either by the court in the judgment of forfeiture or by order of the City Council, a reasonable time thereafter, as fixed by such judgment or order, to correct the default and pay such expenses, damages and costs as it may be adjudged to pay, and if Telephone Company does so correct and so pay within such time, forfeiture shall not become effective nor be enforced. SECTION 23. TERMINATION In addition to all other rights and powers retained by the City under this Ordinance or otherwise, the City reserves the right to terminate this Ordinance and the agreements herein made, and all rights and privileges of Telephone Company hereunder shall cease in the event of substantial breach, subject to reasonable notice and opportunity to cure as set forth in Section 22. A substantial breach by Telephone Company shall include, but shall not be limited to, the following: A. Telephone Company's violation of any material provision of this Ordinance or any material role, order, regulation or determination of the City made pursuant to this Ordinance; B. Telephone Company's failure to properly compensate the City as required in this Ordinance; C. Telephone Company's attempt to evade any material provision of this Ordinance or to practice any fraud or deceit upon the City or upon Telephone Company's customers or interexchange carriers; D. Telephone Company's attempt to sell, transfer, convey or assign any of the rights and privileges granted pursuant to this Ordinance without City Council approval as provided for herein; E. Telephone Company's failure to respond to or comply with City requested reports, audits, statements and other information in a timely manner; 14 F. Telephone Company's material misrepresentation of fact in its application or negotiations during the agreement process; or the conviction of any director, officer, employee or agent of Telephone Company for the offense of bribery or fraud connected with or resulting from the award of this franchise by Telephone Company. SECTION 24. PARTIAL INVALIDITY AND REPEAL PROVISIONS If any section, sentence, clause or phrase in this Ordinance is for any reason held to be illegal, ultra vires or tmconstitutional, such invalidity shall no affect the validity of the remaining portions. All ordinances and agreements and parts of ordinances and agreements in conflict herewith are hereby repealed. SECTION 25. ACCEPTANCE OF AGREEMENT The Telephone Company shall have sixty (60) days from and after the passage and approval of this Ordinance to file its written acceptance thereof with the City Secretary. This Ordinance shall be in full force and effect from and after its passage, publication and written acceptance by Telephone Company and it is so ordained. PASSED this the ~L%clay of ~ ~) (_~.l)~'f' , A.D. 1998. ~M~ the~~ e~f T~ny(T,~x ~ ~~~. ATTEST: City Secretary 15 ACCEPTANCE WHEREAS, the City Council of the City of The Colony, Texas, did on the 3rdday of August 1998 enact an Ordinance entitled: ORDINANCE NO. 98-1055 AN ORDINANCE WHEREBY THE CITY OF THE COLONY, TEXAS, AND COSERVE, L.L.C. INCORPORATED AGREE THAT, FOR THE PURPOSE OF OPERATING ITS COMMUNICATIONS BUSINESS, THE TELEPHONE COMPANY SHALL CONSTRUCT, ERECT, BUILD, EQUIP, OWN, MAINTAIN AND OPERATE IN, ALONG, UNDER, OVER AND ACROSS THE STREETS, AVENUES, ALLEYS, BRIDGES, VIADUCTS AND PUBLIC GROUNDS OF THE CITY, SUCH POSTS, POLES, WIRES, CABLES, CONDUITS AND OTHER APPLIANCES, STRUCTURES AND FIXTURES NECESSARY OR CONVENIENT FOR RENDITION OF TELEPHONE AND OTHER COMMUNICATION SERVICES IN SAID CITY AND FOR CONDUCTING A GENERAL LOCAL AND LONG-DISTANCE TELEPHONE BUSINESS; PRESCRIBING THE CONDITIONS GOVERNING THE USE OF PUBLIC RIGHTS-OF-WAY FOR THE TELEPHONE COMPANY'S COMMUNICATIONS BUSINESS; PRESCRIBING THE ANNUAL COMPENSATION DUE THE CITY UNDER Tills ORDINANCE; PROVIDING AN INDEMNITY CLAUSE; SPECIFYING GOVERNING LAWS; PROVIDING FOR ASSIGNMENT; FOR A PERIOD OF AGREEMENT; FOR FUTURE CONTINGENCIES; FOR REPEAL OF CONFLICTING ORDINANCES; FOR RELEASE OF ALL CLAIMS UNDER PRIOR ORDINANCES; FOR ALTERNATE DISPUTE RESOLUTION; FOR A LIMITATIONS PERIOD; FOR VENUE; AND FOR METHOD OF ACCEPTANCE; and WHEREAS, said Ordinance was on the 3ra day of August 1998 duly approved by the Mayor of said City and the seal of said City was thereto affixed and attested by the City Secretary; NOW THEREFORE, in compliance with the terms of said Ordinance as enacted, approved and attested, CoServ, L.L.C. hereby accepts said Ordinance and files this its written acceptance with the City Secretary of the City of The Colony, Texas, in his office. Datedthis ~ day of ~ff/6~4/d.;'k ,A.D. 19..~__. COSER¥, L.L.C. By.~ ,~x ~r~ent ATTEST: Assistant Secretary Acc, c~eptance filed in the office of the City Secretary of The Colony as, this day of City Secretary