Sec. 866-5. - Terms and conditions.
The council hereby authorizes nonexclusive district cooling system franchises for the downtown subject to the following general terms and conditions:
(1) Franchise agreement. The franchise holder shall enter into a contractual agreement with the city for a term of twenty-five (25) years. Such agreement shall reflect the terms and conditions stated in this chapter.
(2) Renewal. At or before the end of the twenty-five-year term, the council may, upon application by the franchise holder or its successor, renew the franchise. In deciding whether to renew, the council shall apply a standard of public interest, taking into account (among other things) credit to the franchise holder or its successor for adequate performance under the franchise. The council shall make the decisions described in this paragraph, without delegation to a subordinate tribunal or official.
(3) Termination. Unless renewed, the franchise shall terminate at the end of its term. Before the end of the franchise term, the council may terminate the franchise if it finds, after notice and hearing on a record, that the franchise holder or its successor has abandoned the franchise or has abandoned good faith efforts to promote the franchise. In the event that the franchise holder or its successor has continued service in, and efforts to promote, only a portion of the franchise's geographic area, the franchise may be terminated only as to the remaining geographic area. The council shall make the decisions described in this paragraph without delegation to any subordinate tribunal or official.
(4) Abandonment of franchise. The franchise holder or its successor shall not abandon service until one (1) year after it has given the council and the mayor written notice of its intention to do so. The council may, however, consent to abandonment on less than one (1) year's notice. The council shall make the decisions described in this paragraph without delegation to any subordinate tribunal or official.
(5) Sale of franchise. The franchise holder or its successor must obtain council approval for the sale or transfer of the franchise. Any request for approval should contain adequate information about the acquiring person's identity, character, financial ability and competence in providing chilled water service.
(6) Right of first refusal. If the franchise holder or its successor makes a request for approval of a sale or transfer, the council, on behalf of the city, may exercise a right of first refusal to acquire the district chilled water system and operation. In the event that the council declines to exercise the right of first refusal, it shall grant a request for sale or transfer unless it finds that the acquiring party is not responsible.
(7) Valuation upon exercise of right of first refusal. If the council declines to approve a sale or transfer to a person who is responsible and instead exercises a right of first refusal in order to take over the chilled water system, it shall pay a price equal to the bona fide offer.
(8) Valuation on refusal to renew. If the council declines a request to renew the franchise, the council may, but is not obligated to, acquire the chilled water system facilities. If the council acquires the chilled water system facilities, it shall pay a price equal to fair market value, based on three (3) independent mutually agreed upon appraisals.
(9) Valuation upon other termination. In the event of the franchise's termination by reason of abandonment or absence or a request for renewal, the council may, but is not required to, purchase the chilled water system facilities at depreciated investment value.
(10) Geographic area. The franchise shall cover the downtown area bounded by the following perimeter: 2200 North, 1200 East, White River, Bloomington Street, Washington Street, extended White River Parkway, Interstate I-70, Harding Street, Kentucky Avenue, on the west, and 2200 South. In the event that the franchise holder later requests an extension of the franchise boundaries to serve additional areas that are part of its long term plans, the council will take into account credit to the franchise holder or its successor for adequate performance of service in the area previously awarded.
(11) Service rates. The franchise holder or its successor will negotiate its rates by individual contracts with customers. In light of this, the council will not request any rate cap.
(12) Favorable city treatment. The franchise holder or its successor shall provide that the contracts negotiated with the city will be amended to include any more favorable term, included in any other customer's contract, relating to rates and discounts. For the purpose of this subsection, the city will be deemed to include the following buildings: City-County Building and any future annex, City Market, Marion County Jail, Market Square Arena, Convention Center and Hoosier Dome, State Museum, Indianapolis Sports Center, and a future baseball stadium.
(13) Construction standards. The franchise holder or its successor will be bound by the right-of-way restoration standards contained in General Ordinance 24, 1985. If, subsequent to the granting of a franchise, revisions to the ordinance alter the above standard, such alterations shall not be applicable to Phase One construction (as outlined in exhibit A which is attached to General Ordinance 96, 1990 and made a part hereof) prior to April 1, 1991, provided that an extension may be provided by the department of public works for good cause thereon. The council shall direct the city to contract with a private consultant, at the franchise holder's or its successor's expense, to provide inspection services on call and as needed at the sole discretion of the city for the inspection of the work being performed within the public right-of-way. However, such inspection need not be provided on a resident basis.
(14) Location of chilled water facilities. The department of public works may designate the sides of the streets and the locations thereon along which any of the franchise holder's or its successor's facilities, whether separately or jointly, shall be placed. The department of public works may refuse to permit the franchise holder or its successor to lay mains or conduits along both sides of or in more than one (1) part of any street except in cases of emergency or cases of clear necessity.
The franchise holder or its successor shall submit its plans for location of facilities with the department of metropolitan development. The department shall approve or disapprove the plans within twenty (20) days of submittal, which approval shall not be unreasonably withheld. If the department fails to approve or disapprove a submitted proposal within the twenty (20) days, the plans shall be deemed to be approved.
(15) Relocation of chilled water facilities. Whenever the department of public works shall deem it necessary that the location of any of the franchise holder's or its successor's facilities in any public right-of-way or public place shall be changed, the department shall order in writing the change of location thereof, designating the proper location therefor, and provide a reasonable time for compliance by the franchise holder or its successor. Changes in the location of the franchise holder's or its successor's facilities within the public right-of-way or public grounds necessitated by work initiated by or financed by the department of public works shall be at the expense of the franchise holder or its successor. However, in its project plans, the department of public works shall coordinate with the franchise holder or its successor to ensure that the facility relocation costs are limited to the maximum extent possible. Changes in location of the facilities in, over or through the public rights-of-way or public grounds necessitated by work initiated by or financed by any party other than the department of public works shall be at the expense of such other party.
(16) Conduit. During street excavation, the franchise holder or its successor will install up to two (2) conduits, four (4) inches or six (6) inches in diameter, up to a cost limit of fifty thousand dollars ($50,000.00). After the above stated cost limit is reached, the franchise holder or its successor will continue to install conduit at its expense. In such case, the city shall reimburse the franchise holder or its successor for the cost of conduit material. All such conduits will be the property of the city.
(17) Risk allocation. The franchise holder or its successor shall supply conduit meeting the generally acceptable industry standards and specifications. The franchise holder or its successor shall obtain standard one-year warranties for labor and materials from contractors and suppliers and further will assign all rights, including contract remedies, to the city. There will be no further franchise holder liability after installation of conduit. The city and the franchise holder or its successor shall give each other mutual releases of liability.
(18) Franchise fee.
a. Method of payment. The franchise fee without interest shall be paid semiannually, forty-five (45) days after the end of June and December.
b. Amount of fee. The amount of the fee to be paid to the city by the franchise holder shall be as follows:
Year | Projected Gross Annual Revenue | Franchise Fee
1991 | $1,925,000.00 | $0.00
1992 | 3,933,000.00 | 50,000.00
1993 | 5,869,000.00 | 100,000.00
1994 | 8,217,000.00 | 200,000.00
1995 | 9,728,000.00 | 381,000.00
1996 | 10,982,000.00 | 424,000.00
1997 | 11,964,000.00 | 462,000.00
1998 | 12,959,000.00 | 500,000.00
1999 | 14,044,000.00 | 4%
2000 | 15,234,000.00 | 4%
2001 | 16,028,000.00 | 4%
2002 | 16,783,000.00 | 4%
2003 | 17,581,000.00 | 4%
2004 | 18,415,000.00 | 4%
2005 | 19,283,000.00 | 4%
2006 | 20,196,000.00 | 4%
2007 | 21,153,000.00 | 4%
2008 | 22,148,000.00 | 4%
2009 | 23,198,000.00 | 4%
2010 | 24,299,000.00 | 4%
2011 | 25,446,000.00 | 4%
2012 | 26,656,000.00 | 4%
2013 | 27,914,000.00 | 4%
2014 | 29,239,000.00 | 6%
2015 | 30,624,000.00 | 6%
1. The above franchise fees listed for years 1991 through 1998 are minimum fees payable and are guaranteed by the franchise holder.
2. For the years 1999 through 2015, the franchise fee shall be calculated by subtracting prior years' paid franchise fees from the present year's gross annual revenue and multiplying that remainder by the applicable percentage.
3. For any year in which the project exceeds the projected gross annual revenues, the franchise holder shall pay an additional franchise fee equal to six (6) percent of the amount in excess of the projected gross annual revenue.
4. Gross annual revenue means any and all compensation accrued from providing chilled water services or district cooling products, in whatever form, exchange or otherwise, directly or indirectly by the franchise holder.
(19) Police power. The council, the department of public works or any other agency of the city shall have the power to adopt, in addition to the provisions contained in this chapter, the franchising contract, and any other applicable ordinances or regulations as of the effective date of General Ordinance 96,1990, such additional ordinances or regulations as they shall find necessary in the exercise of the police power.
(20) Applicable law. The franchise agreement shall be governed by the laws of the state.
(21) Changes to franchise agreement. Any additions, deletions, waivers, exceptions, amendments or alterations of any kind to the franchise agreement must be made by express consent and agreement between the franchise holder or its successor and the council. The council itself shall make the decisions described in this paragraph without delegation to any subordinate tribunal or official.
(22) Remedies. Nothing in this chapter shall limit the city's right to pursue any and all rights and remedies available to it under the terms of the franchise agreement.
(G.O. 96, 1990, § 1; G.O. 15, 2001, § 142)
