HomeMy WebLinkAboutTR-82-98
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THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting:
General Purpose and Administration Committee
File #: L.eALa .
Date: November 16, 1998
Report #:
TR-82-98 File #:
Res.#:6PA ~ (ODI-97
By-Law #:j'r-/'7b
Subject:
FRANCHISE AGREEMENT WITH CONSUMERS' GAS
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report TR-82-98 be received;
2. THAT Council approve the form of draft By-Law (including the franchise
agreement forming part thereof) attached hereto and authorizes the
submission thereof to the Ontario Energy Board for approval pursuant to the
provisions of Section 9 of the Municipal Franchises Act; and '
3. THAT Council request the Ontario Energy Board to make an order dispensing
with the assent of the municipal electors of the attached draft By-Law
(including the franchise agreement forming part thereof) pursuant to the
provisions of Section 9(4) of the Municipal Franchises Act.
Background and Comments:
1.0 The Municipality of Clarington has an existing franchise agreement with Consumers'
Gas entered into on February 13, 1978. This original 20-year agreement has been
extended twice and will expire December 13, 1998. An additional extension has been
requested to allow processing time as the Ontario Energy Board requires ninety (90)
days to process the lease.
1.1 The franchise agreement must be approved by the Ontario Energy Board (OEB). In
1987, the OEB approved a model agreement for use when existing 20-year
agreements expired. See Attachment "B" for a copy of a letter received from
Consumers' Gas.
1.2 The Agreement provides that Consumers' Gas can use right-of-ways for the supply,
distribution and transmission of natural gas.
~ul
TR-82-98
FRANCHISE AGREEMENT WITH CONSUMERS' GAS
Page -2 -
1.3 The new franchise agreement has been reviewed by the Municipality's solicitor. The
primary concern outlined by the solicitor revolves around the calculation and sharing
of relocation costs incurred during construction of roads. The new Agreement
proposes to share costs on a 65/35 sharing ratio, where the municipality pays 35%
and Consumers' Gas contributes 65% of cost to relocate during road construction.
The previous lease did not stipulate so provincial legislation under the Public Service
Works on Highways Act, R.S.O. 1990, c.P.49 stipulated a 50/50 apportionment rule.
However, the calculation of the costs to be shared is determined differently in that the
definition of labour costs is expanded under the new agreement and an administrative
overhead charge of 22.5% is added in the new agreement.
1.4 The Public Works Department has reviewed the proposed cost sharing arrangement
and is of the opinion that the new agreement would generally result in minor cost
savings to the Municipality. This is reflected in the following chart (supplied by
Consumers' Gas):
Clarington Job Clarington Job Clarington Job Clarington Job Clarington
#40-4762-97 #40-4765-97 #40-4756-97 #40-4750-96 Job #40-4716-94
Scugog & Second St. Wellington St. Hwy. #2 King Street Church & Division
Total Job Cost $ 5,097.04 $58,486.90 $33,644.04 $ 4,970.30 $154,372.77
Amount Billed 1,930.70 20,456.00 10,764.45 1,766.51 56,865.28
35% Share 1,783.96 20,470.42 11,775.41 1,739.61 54,030.47
Variance 146.74 (14.42) (1,010.96) 26.91 2,834.81
Note: 7% GST not
included
Total amount billed to Clarington on 50/50 sharing basis
Total amount based on proposed 65/35 sharing basis
Variance
$91,782.94
89,852.24
1,930.70
1.5 The Treasury Department has investigated any potential for revenue generation in
deviating from the proposed agreement (ie. charging Consumers Gas for use of
municipal right-of-way). The Ministry of Municipal Affairs and Housing was contacted.
According to MMAH, a regulation was passed in 1998, made under Subsection
220.1 (13) of the Municipal Act to prevent municipalities from charging
telecommunication companies from occupying municipal right-of-ways. MMAH staff
were of the opinion that, even though gas companies are not currently covered under
this regulation, should municipalities commence charging the utilities, they would
likely appeal to the Province to be included in this regulation.
1.6 The OEB must approve the franchise agreement and also convenes hearings to
resolve disputes. Since the DEB has traditionally emphasized uniform rates
respectively across commercial, industrial or residential customers served by the
same distributor, the imposition of differing franchise fees in different municipalities
would not likely be supported by the DEB in a dispute between municipalities and
Consumers' Gas.
8u2
TR-82-98
FRANCHISE AGREEMENT WITH CONSUMERS' GAS
Page -3-
1.7 Treasury Staff have contacted Mr. Paul Pudge, Board Secretary, Ontario Energy
Board, who indicated that the OEB to-date has turned down Municipal requests to
vary from the model agreement developed by the OEB.
1.8 In the Region of Durham, The Town of Whitby has entered into the model agreement.
The old agreements in the other area municipalities have not yet expired.
Consumers' Gas has also signed model agreements with Lindsay, Manvers and
Township of Ops, in 1997.
Conclusion:
2.0 As the model agreement being proposed for use by Clarington was approved by the
Ontario Energy Board and there does not appear to be any potential for additional
revenue generation, it is recommended that the agreement be adopted. As indicated
above, the Public Works Department is of the opinion that the proposed sharing of
relocation costs is not detrimental to the Municipality.
Reviewed by:
~
&.;<<~ ;50., AMCT,
Acting Chief Administrative Officer.
~~
Stephen Vokes, P.Eng.,
Director of Public Works.
MM/NT/hjl
Attachments
bu3
Attachment" A"
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
BY-LAW 98-
Being a by-law to authorize a Franchise Agreement
between the Municipality of Clarington
And The Consumers' Gas Company Ltd.
WHEREAS, the Council of the Corporation deems it expedient to enter into the attached franchise
agreement with the Consumers' Gas Company Ltd.;
AND WHEREAS the Ontario Energy Board by its Order issued pursuant to the Municipal Franchises Act
on the .. ... day of .., ... ... ...., 1998 has approved the terms and conditions upon which and the period
for which the franchise provided for in the attached agreement is proposed to be granted, and has
declared and directed that the assent of the municipal electors in respect of this By-Law is not necessary;
AND WHEREAS, the Consumers' Gas Company Ltd. has provided the Corporation with a consent to the
repeal of the By-Law hereinafter referred to:
NOW THEREFORE BE IT ENACTED BY THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY
OF CLARINGTON
1. THAT the attached franchise agreement between the Corporation and the Consumers' Gas Company
LId. is hereby authorized and the franchise provided for therein is hereby granted.
2. THA T the Mayor and Clerk are hereby authorized and instructed on behalf of the Corporation to enter
into and execute under its corporate seal and deliver the aforesaid agreement, which agreement is
hereby incorporated into and shall form part of this By-Law.
3. THA T the By-law referred to in Schedule" A" annexed hereto and forming part of this By-Law is
hereby repealed insofar as it applies to any area within the present geographic limits of the
Corporation.
Mayor
Clerk
ou4
SCHEDULE "A"
8y-Law No. 7S-S passed by the: COWlcil of the corporatio~ of the Town of Newcastle on the 13th day of
Fcbroary, 1978 .
S,\LEGAL\RllGGOV\fM..NC~\RENBW AI .sIDYCLAR..SAM
(juS
THE CONSUMERS' GAS COMPANY LTD.
FRANCHISE ACREEMENT
THIS AGR~P-MRN1' made: this
BETWEEN:
day of
119
THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON
hereinafter caned the "Corporation"
-and-
THE CONSUMERS' CAS COMPANY LTD.
hereinafter called tJlI: "Gas Company"
WHEREAS Ute Gas Company desires to d~tn"butc and sell gas in the Municipality UpOn the tennsllnd
conditions of this Agreement;
AND WHEREAS by by-law passed by the Coun<:fl of6111 Corporation (the "By_law"), the Mayor and the
Cleric have been authorized and directed to execute this Agreement on behalf of the Corporation;
THEREfURE the Corporation and the GlCi Company agree as follows;
Definitions
1. In this Aweement:
(a) "gas" means natural gas, manufacmred gas. synUtctic naturnl gas, liquefied petrolc:um gas or
propanc-aif gas, or a mixtUre of any ofthcm, but does not Include 1Iliqucficd petroleum ps that is
distributed by means other than a pi~llne;
(0) "gas system" means such mains, pllll1ts. pipes, conduits, services. valvea. regulators, curb boxes,
smtion."I, drips 01' such omer e<I11lpment lIS the Gas Company may require or deem desirable for the
supply, transmission and diS1rlbudon of gas in or through the Mwticipality;
(e) "hIghway" means all common and public highways and shall include any bridge. viaduct or
$tnJctun: funning part of a highway. and any public square. road allowance or walkway and shall
include not only the travelled portion of such hlgbWlSY, but 111$0 ditches, driveways, :sidcwG,lks. iUld
sodded areas fanning part of the road allowance now or 1ItlU1Y time during th" term hcrcofunder
the juri!:diction uf the Corporation;
(d) "Municipality" means the terrltorialllmlts uflbe Corporation on the date when this Agreement
tJk6S lll'foot, and any territory which may thereafter be brought within the jurisdiction of the
Corporation;
(e) "Engineer/Road Superintendent" means the most senior individual emptgycd. by the corporation
with responsibilltles for hlghWll)'::l within the Municipality or the perSon ddignnted by such &tnlor
employee or such other per:wri as may from time to time be dllSlgnated by the Council ofthe
Corporation.
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II Rights Gnnted
I. To provide gas service.
l1le consent of the Corpontion ill baeby given ~ gnmted to the Ga& Company to supply gas in the
Munlelpatity to me Corporlltion and to dle Inhabitants of the M\U\icipality.
2. To use rold 1Il1QWBnces.
The consent of the CorpOration Is hereby given zmd. granted to the Gas Company to enter upon all highways
now or at any time hemlfter under the juriOOiction of the Corporation and to IL\Y, oonstrUct. maintain,
replace, remove. operate and repair CL gas system for the supply, distribution and tranSmission of gas in and
through die Munlc:Jpltllty.
3. DI1ratfon of Agreement and Renewal procedures.
The r1ghu hereby given and grunted shall be fur Zl term of twenty (20) years. fTom the date offlnal past:ing
ofUie By-law.
At any lime within two years prior to the expiration of this Agreement, either party may ~ve notil:ll to the
other mat It clealres to enter into negotiations fer a renewed 1Tanchise upon such temtS and conditions as
may be agm:ci upOn. Ul1til such renewalnas been lStttlod, the terms and conditiON of this Agreement shall
continue. notwithstanding the expiration of this Agreement. Nothing herein stated sMlI preclude either party
1tom applying to the OnUltio Energy Board for a nmewal of the Agreement pursuant to section 10 of the
Municipal Fnn~hlses Act.
III Conditions
1. Approval ofConlMJClion.
Befon: bcginnill8 construction of or any extension or changc to the gns system (except service lateral:;;
which do not Interfere with municipal works in the highway), the Go5 Company :shall tile with tha
Engin~/Road Superintendent a plan, satisfactory to the EngineerlRoad Superintendent. drawn to GCale and
of 5\lffi~mt Q~! ~n~idcring the complexity of the 6pe<:iflc tocatio~ showinl the hi;bways In u-hich it
proposes to lay its gas system IUld the particular partS thereof it proposes to occupy. Gc:ocletic information
will not be required except in complex urban intersections in order to facilitate known projects, being
J)t'Ojects which are reasonably anticipated by the ErlgineerlRoad Superintcndc:nt. The EngineerlRoad
SuPerintendent may require sectiolU oftbe gas system to be laid at a greater depth than required b)'
C^ N/CSA- Z 184-M92 to facilitate known projects. The location of the work Il5 shown on the said plan
must be approved by the EngineerlRoad Superintendent before the commencement of the woric and the
timing, terms and conditions relating to thlil installation of such works shall be to his satisfactlon.
NotWithStmding the provisions or the above noted paragraph, in the event it is proposed to affix a part of
the gas system to a bridge. visluct \.Ir $(nlcmre. the Engineer/Road Superintendent may, if the
Engineer/Road Superintendent approves of such location, requins special conditions or a sepamte
agreement.
No excavation. opening or work which slus11 disturb or Interfere with the surface of the trave lled portion of
any highway shall be made or done unless a permit thmlfor bas first been obtained from the: Engineer/Road
Superintendent and all works shall be done to his satisfaction.
6The tithts gl"cn md ~ fot a rtl'St 'IfOCl1\ent ,h~1 be for Il tmn of 20 ye8B. The riab ~VClI and KfIIlled fur lIl1Y $U~t ~
shill be for lllerm of not more mll11 I S ~ unless both parties agree: to c:xtcnd the: lam to I tam of20 yeatS maximum.
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S:\LEGAL\AEGGO\I\FRANCH\RENEWALS\AGTCLAR.SAM
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The EngineerlRoad S~tlntendcnt's approval, where required 1hroughoutthis section, shall not be withheld
unteasonably.
2. At. Built OrilwlrIp.
The Gas Company shalt not deviate from 1be approved \(lcation fur any part of the gas system wllc:;s the
prior approval oftbe EngillltrlRoad Superintendent to do l'O is reccived. After completion QrOIl~
constJuction, where plans were initialty filed, an "as bullt" plan of Cl1W1l quality to the pre-constrUClion plan
or certification .that the pre-conmuction plan is "as built" will be flied with the Engineer/Road
Superintendent.
3. Emergencies.
In the event of 811 entergetlq involving the gas system. the Gas Company will proceed with the wort and in
any Instance wbcrc: prior approval of the Bn~neer/Road Superintendent is nonnall)' required, shall use its
best efforts to Immediately nodt}t the engineerlRoad Superintendent of the loamon and nature of the
emerg~cy and the work being done ~nd, if it deems apprOpriate, notifY the police force haVing jurisdlctfon.
4. Re$tOrIrtion.
The Gas Company &hall well and sufficiently restore, to the reasonable satisfaction of the El\2ineer/Road
Superintendent, al1 highways, mlDlicipal works or improVements which it 1IIIl)' excavate or interfere with in
the course of laying, constructin~ repairing or n:movina its &as system, and shalt make good any seetling: ur
roh&idcnee thereafter caused by such excavation or lnterferenee. If the Gas Company fails at any time to do
any work required by this paragraph within a neasonable period oHime, the Corporation may do or cawe
such work to be done and the Gas Company sba1~ en dernat.d. pay ar.y reasonable account therefor as
certified by the EngineerlRoad Superintendent.
5. Indemni1icntion.
The Gas Company shall. at alt timc:s~ indemnifY and save harmless the Corporation from and against all
c1ailT'.s, including costs related thuno, for all damaiei or injllries including death to any person or persons
lIJld for damage to any property, ar1$mg 0i1l of the C.-as Company operating, constructing, and maintaining
its gas system in the Municipality, or utilizing its g""AS system for the carriage of gas owned by others.
Provided that the Gols Company &hall not be required to indemnify or save harmless lhe Corporation from
and against clDims. j~luding costs related thereto. which it may incur by reason of damages or injuries
including dcam to any person or persons and (or dama~ to any property, resulting from lhe negli~nee or
wrongful act of1l1e Corporation, its servants. ~ OT IIm1ployccs.
6. Alternative Easement.
The Corporation ll~es, in the event of the proposed sale or closing of any highWllY Or any part of a
highway where thel'$ Is a gas line in exlsttmce, to gi~ the Gas Company reasonllble notice of such proposed
sale or closing and to provide, if it is feasible. the Gas Company with easements over that part oftbe
highway proposed to be sold or closed sufficient to ~l1ow the Gas Company to preserve any part of the gas
system in its then existine: location. In the event that such easements cannot be provided, tho COrpOration
will6h~ as provided in clause Ill, 7 of this Agreemenr, in the cost of relocating or alttmng the gas system
to faciliwc continUity of gas semcc.
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S:\LEG.AL\FIEGGOVlFRANCH\RENEWAL.S\AGTCLAA.SAM
DuB
7. Pipeline RelOQllion.
Iftn the c:ourac of COIIStrlx7ting, n:eoostnlCtin" dl!D1ging, alterfn& or improving any highway or any
. ,municipal works, the Corporation deems that it 18 n~ to take "P, l'MIove or chllnge the location of
any pan of the eas system. the Gas COmpany,shalt, upon notice to do so. remove lII1d1or relocate within a
reasonable period oftfme such part of the gas system to a location approved by the Engineer/Road
Superintendent,
Whcre all)' part of the &as system relocated In accordance with this section is locllted on a brldite. viaduct or
$tl'Ueture. the Gas Company shan alter or rtllocate, at its sole expense, $uch part of the gas system.
Where any part of the gas system ",I~d In acc:ordancc with this section is located other than on a bridge,
viaduct or structUte. the costs of relocation shall be $bared bcrwcc" the Corporation III1d the Gas Company
on the basis ortbe total relOGation eost&, exc11lding the value ofan)' upgrading of the au syMm, and
deducting any contn1J\Ition paid to the Gu Company by others in respect to such reloc:atlo,,; and for the.~
purpose~ che total relocation oosts shall be the aggrepto of the following:
(a) the amount paid to Gas Company employees up to III1d including field supervisors for ~ hours
worked on the project plus the cum:nt cost of fiinge benefits for these mnployees,
(b) the amowrt paid for rental equipment while in use on the project and an lImOWlt, char~ at the UJ'!it
rate, for Gt.s Company equipment whilt in use on the project,
(c) the amount paid by the Gz Company to contractors for work related to the project,
(d) the cost to the Gas Company for materials 1l$ed in .connection with the project., and
(e) a reasonable amount for project engineering and project administrative casts which shall be 22.5%
of the a~ of the amounts detenninc:d in items (a), (b), (0) and (d) above.
The total.relocation costs as ca1rolat"d above shall be paid 35% by the Corporation and 65% by tile Gas
Company.
8. Notice to Drainage Superintendent.
In a case where me ps system may affect a municipal drain, the Gas Company shall file with th. Drainage
Superintcndent, for purposes of the Dnlinage Ad, or other person responsible for the drain, a copy of the
plan rcqui~d to be filed with the EngineeriRoad Superintendent.
IV Procedunl And Other Matters
1. Municipal By-taws of General ^pplication.
This Agreement and the r'espective rights and obligation& hereWlto of the parties hereto are hereby declared
to be subject to ~e provisions of all regulating st!tutes and all municipal by-laws of gener81 appliCalion and
to all orders and regulations made thcrC1JJldc:r fium time to time remaining in effect save and except by-laws
which Impose permit fec:s Wld by.laws which have the effect of amending this AgreelTlent.
2.' Giving NOlicc.
Notices may be given by delivay or by mlll~ and If mailed, by prepaid T'Cglstered post, to the Gas Company
stlts head office or to the Clerk of the Corporation at its municipal offict=S, as dle caw may be..
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S:\LEGAL\REGOOV\FRANCH\RENEWALS\AGTCLAR.SAM
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3. DlspolSltion of Gas System.
Durin& the term of this Agtllernent, if the Gas Company abandons a part of its gas system affixed to a
bridge., v ieduct or stmcture, the Gas Company shalt, at Its sole .~. remove that part of its gas system
affixed to the bridge, viaduct or $tn1d:Ure.
If at any time the Gas Company abandonnny other part of its gas system, it shall ~eaotivate thal part of It,
gas system In the: Municipality. Thereafter, ihe Oas Company shall have the fight; but nothing hemn
contained shall ~quif\: it. to remove Its &as &yStem.lf'the Gas Company fulls to remove its gas system and
the Corpomon requires the rernoval of all or any of the gas system for the purpose of altering or Improving
a hfihway or in order to facllftate the construction ofutJ1ity or other works In any highway, the Corpor.ltion
may remove: lII1d dispose of so I111.Xlh ofihe dcladivated:as 5)'StCm AS the Corponltion mOlY require Tor such
purpollCS and neither party shan bCMI recourse agaimt 1hc ocher for any lo&&, cost, expense or damage
occssioned thereby.
4. Agreement 8inding Parties.
This A~'m(:nt shall extend to, benefit and bind the parties thereto, their sl1OcessOr'6 and assigns,
respealvely.
IN WITNESS WHEREOF the parties hereto have duly executed these presents with ef&ct from the date
first above written.
TIiE CORPORATION OFTHE
MUNICIPALITY OF CLARINGTON
Mayor
Clerk
TIiECONSUMERStGASCOMP^NY LTD.
5
S:\LEGAL\REGOOVlFRANCH\RENEWALS\AGTCL4.A.SAM
010
'. '
. 10/92/98 15: 27
-,
'C'905 666 6159
CONSUMERS GAS
I4J 001
ATTACHMENT "B"
~1 Consumers G,
September 29, 1998
RECEIVED
OCl 0 2 1995 .
500 EIg"l Mills Road EsEt
Richmond Hill. Onrario L4C 5G
","':~""";f~:.''':' .........~
lISIIIIlIBiIllI'On:::...., , ". ,c...;" .'
sml.i!,.r:'::~~i~4,1
The Corporation of the Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
L 1 C 3A6
Attention: Mr. Tony Cannella, Manager of Engineering
Dear Mr. Cannella:
Re: The Consumers' Ga~ Company Ltd. . Franchise AgrA8rnent Renewal
MunicIpality of Clarington .
, am sending this note as a foJfowup to our telephone conversation last Friday.
As discussed, all renewed franchise agreements will follow the model FranchIse
Agreement which was approved by the Ontario Energy Board In 1987_ To date, the
Town of Whitby Is thli only Durham Region munIcIpality with the model Franchise
Agreement in place. f have attached a copy of their agreement which was executed on
January 16, 1989.
I would flke to emphasize how important the timely execution of the Resolution is for the
renewal of the Franchise Agreement. The Ontario Energy Board ('tOES") has Issued
two Interim Orders extending the expiry date ofthe current Franchise Agreement As
you know, the expiry date Is now December 13, 1998.
Consumers Gas would like to proceed with the Application as soon as possible. but are
unable to do $0 until such time that we receive the executed Rlisolution from your
office. The OES is very busy at the present time and in order for us to avoid having to
request an add/tionallnterim Order to extend the expiry date further, we would ask that
you provide us with the executed Resolution as soon as possible.
M'PI., Ri~hmo"d HiIIlno Thornhill;
(illS, 8a4-91 05
Auroru. Brsdforll. ~iel( Qnd NIWII\urket
(005) 895""577
Bel.Arten. lioodwaad. J.tkson'$ Pelnt, KJ.lnburg,
M.rld1am. Nob/lUln, rolt BOlstar, StOllffville.
sulton. Unlenvill., UxbriaQ' .nd Woodbridge
1.800.361 -0621
~
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, . ..~0/92/98 15:28
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'C'905 666 6159
CONSUMERS GAS
141002
I would be pleased to attend a Council meeting. If I can be of any assistance, feel free
to contact me directly at (905) 883.3316.
Yours truly,
(P~
Cindy Graham, P. Eng.
Manager, Distribution Operations,
Central Region, North
CG/dem
cc: Steve Vokes, DIrector of Public Works
Patti Barrie, ClerkL"
bee: L. Chiotti
,/
R. Drysdale V
J. Clark
012