water, wastewater, solid waste and gas, known collectively as the Las Cruces Utilities,

COUNCIL BILL NO. 13-025 ORDINANCE NO. 2680 AN ORDINANCE GRANTING A FRANCHISE TO THE CITY OF LAS CRUCES ON BEHALF OF THE LAS CRUCES UTILITIES TO CONSTRUCT, OPERATE AND MAINTAIN SAID UTILITIES ON, UNDER AND WITHIN CITY OWNED RIGHTS OF WAY AND WITHIN THE LAS CRUCES SERVICE TERRITORIES. The City Council is informed that: WHEREAS, the City of Las Cruces operates four (4) utility systems, specifically water, wastewater, solid waste and gas, known collectively as the Las Cruces Utilities, under the organizational structure of the City' s Utilities Department; and WHEREAS, the Las Cruces Utilities are administered as four ( 4) distinct enterprise funds and pay all of their operational expenses as well as charges assessed through the City's budget process from revenue collected from approved rates, fees and charges; and WHEREAS, the City of Las Cruces has been charging the Las Cruces Utilities through the budget process a fee equal to 2% of the gross revenue collected by it for the provision of utility service, which fee the Las Cruces Utilities have been collecting from its utility customers; and WHEREAS, the 2% fee was previously designated as a " payment in lieu of franchise fee" and is now designated as a " franchise fee" for each of the four (4) utilities on current City utility bills; and WHEREAS, concerns were raised by the Ratepayers Advisory Committee during the recent natural gas rate case before the Utilities Board as Case No. 2011-003( G) as to whether the Las Cruces Utilities could lawfully charge such a fee to its gas utility customers without a franchise ordinance so authorizing; and

WHEREAS, inquiries were also raised by Utilities Board Commissioners during the public hearing on the unopposed Stipulation in the gas rate case held on June 28, 2012 as to whether the City Council could increase the 2% assessment. Las Cruces Utilities staff indicated that such an increase was a possibility and that the increase would be added to utility bills; and WHEREAS, the Las Cruces Utilities are obligated to collect the 2% fee assessed on it through the budget process and, therefore, desire that the City Council approve a franchise ordinance to formalize the assessment of that fee for all four (4) of its utilities; and WHEREAS, the City's existing franchises with Jornada Water Company, Mesa Development Center, Moongate Water Company, and River Valley View expire by operation of law on or about July 18, 2013, being twenty -five years after these franchises were adopted, if the parties to those franchises do not negotiate new franchise agreements or if they cancel the existing implied franchise contracts as held by the New Mexico Court of Appeals in Moongate vs. City of Las Cruces, Case No. 26,386; and WHEREAS, staff intends to offer to all four ( 4) of the above identified private water utilities a franchise containing many of the provisions contained herein; and WHEREAS, the City of Las Cruces is willing to grant a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. NOW, THEREFORE, Be it ordained by the governing body of the City of Las Cruces:

120 THAT the Franchise Ordinance Agreement, attached hereto as Exhibit " A ", is hereby adopted. THAT City staff is hereby authorized to do all deeds necessary in the accomplishment of the herein above. DONE AND APPROVED this 18th day of March 13 APPROVED: ATTEST: Mayor y Clerk VOTE: Mayor Miyagishima: SEAL) Moved by: Seconded by: Sorg Thomas Councillor Silva: Councillor Smith: Councillor Pedroza: Councillor Small: Councillor Sorg: Councillor Thomas: Ave Aye Ave Aye Aye Aye APPROVED AS TO FORM: Marcia B. Drig Utilities Attorney

Exhibit "A" FRANCHISE ORDINANCE AGREEMENT BETWEEN THE CITY OF LAS CRUCES AND THE CITY OF LAS CRUCES ON BEHALF OF THE LAS CRUCES UTILITIES THIS FRANCHISE ORDINANCE AGREEMENT as approved in City of Las Cruces Ordinance No. ; 6 u v is entered into on this Imo- day of March, 2013 between the CITY OF LAS CRUCES ( " City "), a New Mexico municipal corporation, and the CITY OF LAS CRUCES ON BEHALF OF THE LAS CRUCES UTILITIES ( "Las Cruces Utilities ") I) RIGHTS THAT Las Cruces Utilities is authorized to construct, operate and maintain its water system, its wastewater system, its natural gas system and its solid waste collection system, on, under and within City owned rights of way, which include roadways, alleys and bridges and within the Las Cruces Utilities service territories. II) RESPONSIBILITIES The placement of Las Cruces Utilities infrastructure shall not interfere with the use of said rights of way by motor vehicles and pedestrians or with any underground utility lines or other underground facilities. Las Cruces Utilities infrastructure within City owned rights of way shall meet applicable City standards such as City design standards. Prior to any non - emergency construction within City owned rights of way, Las Cruces Utilities shall coordinate the construction with appropriate City departments; and shall obtain any permits required from non- City regulatory agencies.

III) FRANCHISE NOT EXCLUSIVE Las Cruces Utilities' right to use and occupy City owned rights of way is not exclusive, and the City reserves the right to grant a similar use of its rights of way to any other person or entity. IV) ONE CALL NOTIFICATION SYSTEM - DAMAGE REPORT Las Cruces Utilities shall comply with the requirements of the appropriate one call notification system and applicable state statutes. Las Cruces Utilities shall appropriately report any damage to underground utility lines and underground facilities caused by excavation undertaken by or on behalf of it in compliance with appropriate state requirements. V) EXCAVATION Las Cruces Utilities shall restore the surface of any City owned rights of way following any excavation therein by it. However, Las Cruces Utilities shall not recreate any pre - existing defective condition, but rather shall restore the surface to a reasonably useful condition. The replacement of pavement shall be performed in accordance with City standards. All expenses associated with such replacement of pavement shall be borne by Las Cruces Utilities whether completed by private contractors for Las Cruces Utilities, or by or on behalf of the City. VI) RELOCATION OF INFRASTRUCTURE When it is detennined by the City that any portion of Las Cruces Utilities' infrastructure is located in conflict with an authorized City construction project, the City will jointly coordinate with the appropriate City department to relocate such portions of its system to a location acceptable to the City. All such relocation work, including any right of way acquisition from 2

third parties, shall be fully performed by Las Cruces Utilities at no expense to the City. Las Cruces Utilities may contract with the City for the City to perform any such relocation required under this franchise ordinance at its expense, or as otherwise negotiated between the parties. VII) INABILITY TO TIMELY RELOCATE The City reserves the right to complete the required relocation of any portion of Las Cruces Utilities' infrastructure located in conflict with an authorized City construction project if Las Cruces Utilities is unable to timely relocate such portions of its system within the time requested by the City, and to bill Las Cruces Utilities for the City' s reasonable relocation expenses including the cost of any right of way acquisition from third parties. VIII) TERM AND EFFECTIVE DATE This franchise ordinance shall expire on January 1, 2038. It shall become effective thirty 30) days after adoption by the City Council and acceptance by the City Manager on behalf of Las Cruces Utilities. The dates of adoption and acceptance are set forth below. After such adoption and acceptance and within said thirty (30) day period, this franchise ordinance shall be published twice in full by the City Clerk at Las Cruces Utilities' sole expense not less than seven 7) days apart as provided in NMSA 1978, Section 3-42 -1 ( 1965). IX) ACCEPTANCE OF FRANCHISE This franchise ordinance shall be accepted by Las Cruces Utilities in writing within thirty 30) days from the date this ordinance is adopted by the City Council. If not so accepted, this franchise ordinance shall be repealed and negotiation for a new franchise may take place between the City and Las Cruces Utilities at the City' s sole discretion. After this franchise

ordinance has been accepted by Las Cruces Utilities in the space provided at the end of this instrument, this ordinance franchise shall become a contract duly executed between the City and the City on behalf of Las Cruces Utilities. X) SCOPE This franchise ordinance incorporates all of the understandings between the parties hereto concerning the subject matter hereof, and all such understandings have been merged into this written franchise ordinance. No prior understanding, verbal or otherwise, of the parties or their agents shall be enforceable unless embodied in this franchise ordinance. XI) ASSIGNMENT This franchise ordinance may not be assigned by Las Cruces Utilities on behalf of any of its utilities. XII) AMENDMENTS This franchise ordinance shall not be amended except by ordinance in writing executed by the parties hereto. XIII) SAVINGS CLAUSE If at any provision of this franchise ordinance, except the provision containing the franchise fee, shall be adjudged invalid or unconstitutional, the same shall not affect the validity of this ordinance as a whole or any provision thereof, other than the part so decided to be invalid or unconstitutional. 4

XIV) PARAGRAPH HEADINGS The paragraph headings of this franchise ordinance are inserted only for reference and in no way define, limit, or describe the scope or intent of this franchise ordinance nor affect its provisions. XV) PAYMENT BY FRANCHISEE Las Cruces Utilities shall pay to the City during the term of this franchise a franchise fee in the amount of 2% of the gross revenue received by Las Cruces Utilities for the provision of utility service to all customers within and without the City limits. Gross revenue shall not include the franchise fee, New Mexico gross receipts tax, water or wastewater development impact fees, or water rights fees. To facilitate the City' s annual budget process, and as part of Las Cruces Utilities budget submissions to the City, it will provide the City with an estimate of such gross revenue for the upcoming fiscal year. One - twelfth ( 1/ 12) of that estimated sum shall be paid to the City on or before the 21s' day of each month during the upcoming fiscal year. The monthly payments based on estimated gross revenue shall be reconciled against the actual gross revenue collected before the close of the City' s fiscal year, and the appropriate credit or additional payment will be processed. The City reserves the right to inspect Las Cruces Utilities' monthly gross receipts reports to determine the appropriate franchise fee payment. The City further reserves the right to adjust the franchise fee to any or all of its utilities by City Council resolution so that the fee is comparable to franchise fees charged to other utilities in New Mexico and in the region. 5

XVI) COLLECTION OF CITY GROSS RECEIPTS TAX Las Cruces Utilities is required to collect and pay the applicable gross receipts tax notwithstanding the franchise fee required to be paid to the City. IQ4 EXECUTED on thisjday of March, 2013. CITY OF LAS CRUCES ATTEST By: en Miyagishima, Mayor Esther Martinez - Carrill City Clerk MC T - 6

ACCEPTANCE OF FRANCHISE ORDINANCE AGREEMENT The City of Las Cruces on behalf of Las Cruces Utilities accepts the conditions set forth in the above Franchise Ordinance Agreement on this LU day of N\&V-di, 2013. CITY OF LAS CRUCES i4l - By: CEL Robert L. Garza, P. E. City Manager

jocity of Las Cruces PEOPLE HELPING PEOPLE Council Action and Executive Summary Item # 6 Ordinance /Resolution# 2580 For Meeting of February 19, 2013 For Meeting of March 18, 2013 Ordinance First Reading Date) ( Adoption Date) Please check box that applies to this item: QUASI JUDICIAL LEGISLATIVE ADMINISTRATIVE TITLE: AN ORDINANCE GRANTING A FRANCHISE TO THE CITY OF LAS CRUCES ON BEHALF OF THE LAS CRUCES UTILITIES TO CONSTRUCT, OPERATE AND MAINTAIN SAID UTILITIES ON, UNDER AND WITHIN CITY OWNED RIGHTS OF WAY AND WITHIN THE LAS CRUCES SERVICE TERRITORIES. PURPOSE( S) OF ACTION: To grant a franchise to the City on behalf of the Las Cruces Utilities. COUNCIL DISTRICT: N/ A Drafter /Staff Contact: Marcia B. Driggers City Manager Signature: Department/Section: Legal /City Attorney n-2 Phone: 575) 541-2128 BACKGROUND / KEY ISSUES / CONTRIBUTING FACTORS: The City of Las Cruces operates four ( 4) utility systems, specifically water, wastewater, solid waste and gas, known collectively as the Las Cruces Utilities, under the organizational structure of the City's Utilities Department. The Las Cruces Utilities are administered as four ( 4) distinct enterprise funds and pay all of their operational expenses as well as charges assessed through the City' s budget process from revenue collected from approved rates, fees and charges. The City of Las Cruces has historically been charging the Las Cruces Utilities through the budget process a fee equal to 2% of the gross revenue collected by it for the provision of utility service, which fee the Las Cruces Utilities have been collecting from its utility customers. The 2% fee was previously designated as a " payment in lieu of franchise fee" and is now designated as a " franchise fee" for each of the four (4) utilities on current City utility bills. Concerns were raised by the Ratepayers Advisory Committee during the recent natural gas rate case before the Utilities Board as to whether the Las Cruces Utilities could lawfully charge such a fee to its gas utility customers without a franchise ordinance so authorizing. Inquiries were also raised by Utilities Board Commissioners during the public hearing on the unopposed Stipulation in the gas rate case held on June 28, 2012 as to whether the City Council could increase the 2% assessment. Las Cruces Utilities staff indicated that such an increase was a Rev. 02/ 2012 Continue on additional sheets as required)

Council Action and Executive Summary Page 2 possibility and that the increase would be added to utility bills. Therefore, in Article XV, staff reserved to the City the right to adjust the franchise fee to any or all of its utilities by City Council resolution so that the fee is comparable to franchise fees charged to other utilities in New Mexico and in the region. The Las Cruces Utilities are obligated to collect the 2% fee assessed on it through the budget process and, therefore, desire that the City Council approve a franchise ordinance to formalize the assessment of that fee for all four (4) of its utilities. Mesa Development Center, The City' s existing franchises with Jornada Water Company, Moongate Water Company, and River Valley View expire by operation of law on or about July 18, 2013, being twenty -five years after these franchises were adopted, if the parties to those franchises do not negotiate new franchise agreements or if they cancel the existing implied franchise contracts as held by the New Mexico Court of Appeals in Moongate vs. City of Las Cruces, Case No. 26, 386. Staff intends to offer to all four (4) of the above identified private water utilities a franchise containing many of the provisions contained herein. The City of Las Cruces is willing to grant a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. SUPPORT INFORMATION: 1. Ordinance. 2. Exhibit "A ", Franchise Ordinance Agreement Between the City of Las Cruces and the City of Las Cruces on Behalf of the Las Cruces Utilities. SOURCE OF FUNDING: Is this action already budgeted? Does this action create any revenue? Yes No Budget Adjustment Attached Yes No See fund summary below If No, then check one below: Expense reallocated from: Proposed funding is from a new revenue source ( i. e. grant; see details below) Proposed funding is from fund balance in the Fund. Funds will be deposited into this fund: FY_ in the amount of $ There is no new revenue generated by this action. for Rev. 02/ 2012 Continue on additional sheets as required)

Council Action and Executive Summary Revised Page 3 BUDGET NARRATIVE: N/ A FUND EXPENDITURE SUMMARY: Fund Name( s) Account Number(s) Expenditure Proposed Available Budgeted Funds in Current FY Remaining Funds Gas ( 5200) 763100 209, 844 209, 844 0 N/ A 763102 254, 791 254, 791 0 N/ A Purpose for Remaining Funds Water (5300) 763100 285, 880 285, 880 0 N/ A Wastewater (5400) 763100 216, 900 216, 900 0 N/ A Solid Waste ( 5500) 763100 191, 110 191, 110 0 N/ A OPTIONS / ALTERNATIVES: 1. Vote " Yes "; this will approve the City granting a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. 2. Vote " No "; this will not approve the City granting a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. 3. Vote to "Amend "; this could allow Council to propose modifications to the ability of the City to grant a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. 4. Vote to " Table "; this could allow Council to postpone consideration of the City granting a franchise to itself on behalf of the Las Cruces Utilities to construct, operate and maintain its utilities on, under and within City owned rights of way and within the Las Cruces Utilities service territories. Rev. 02/ 2012 Continue on additional sheets as required)

Council Action and Executive Summary Page 4 REFERENCE INFORMATION: The resolution( s) and /or ordinance( s) listed below are only for reference and are not included as attachments or exhibits. Rev. 02/ 2012 Continue on additional sheets as required)

SIC) City of Las Cruces PEOPLE NELPIN6 PEOPLE COUNCIL ACTION AND EXECUTIVE SUMMARY PACKET ROUTING SLIP For Meeting of February 19, 2013 For Meeting of March 18, 2013 Ordinance First Reading Date) ( Adoption Date) TITLE: N ORDINANCE GRANTING A FRANCHISE TO THE CITY OF LAS CRUCES O EHALF OF THE LAS CRUCES UTILITIES TO CONSTRUCT, OPERATE AND MAINTAI AID UTILITIES ON, UNDER AND WITHIN CITY OWNED RIGHTS OF WAY AND WITHI HE LAS CRUCES SERVICE TERRITORIES. Purchasing Manager' s Request to Contract (PMRC) ( Required?) Yes No DEPARTMENT SIGNATURE PHONE NO. DATE Drafter /Staff Contact Department Director YI A 116 I ;, l 1 Other Assistant City Manager / CAO Management & Budget Manager 79 i 2 274113 i - Assistant City Manager/COO CityAttorneyl i City Clerk rr 1 r Ak lc Rev. 8/ 2011

Legal Advertising Affidavit Stephanie L. Griffin, who, being duly sworn as the Assistant to the Publisher of the Las Cruces BULLETIN, a weekly newspaper of general distribution published in the City of Las Cruces, County of Dona Ana, State of New Mexico, disposes and states that the legal advertising for City of Las Cruces Notice of Adoption I / M /O Ordinance No. 2680 In accordance with the laws of the State of New Mexico, the attached was published in its entirety one time(s) in the Las Cruces BULLETIN, the first publication date being gi?9ii g and subsequent publications being NOTICE OF ADOPTION The City Council of The City of Las Cruces, New Mexico, Hereby Gives Notice of Its Adoption of The Following Ordinance at a Regular City Council Meeting Held on March 18, 2013: 1. Council Bill No. 13-025; Ordinance No. 2680: An Ordinance Granting a Franchise to the City of Ias Cruces on Behalf of the Las Cruces Utilities to Construct, Operate and Maintain said Utilities On, Under and Within City Owned Rights of Way and Within the Ias Cruces Service Territories. Copies Are Available for Inspection During Working Hours at the Office of the City Clerk Witness My Hand and Seal of the City of Las Cruces on this the 19th day of March 2013. Esther Martinez - Carrillo, CMC City Clerk Pub # 12835 Dates 3122, 2013 Sworn to and subscribed before me this 29 day of MaF h 2013 in the CITY OF LAS CRUCES COUNTY OF DONA ANA STATE OF NEW MEXICO My Commission expires: October 28, 2015 um - Notary Public 2(3 ' I5 Advertising Costs

Legal Advertising Affidavit Stephanie L. Griffin, who, being duly sworn as the Assistant to the Publisher of the Las Cruces BULLETIN, a weekly newspaper of general distribution published in the City of Las Cruces, County of Dona Ana, State of New Mexico, disposes and states that the legal advertising for City of Las Cruces Notice of Intent to Adopt I / M /O Ordinance 2680 NOTICE OF INTENT TO ADOPT The City Council of The City of Las Cruces, New Mexico, Hereby Gives Notice of Its Intent to Adopt The Following Ordinance at a Regular City Council Meeting to be Held on March 18, 2013: I. Council Bill No. 13-025; Ordinance No. 2680: An Ordinance Granting a Franchise to the City of Las Cruces on Behalf of the Las Cruces Utilities to Construct, Operate and Maintain said Utilities On, Under and Within City Owned Rights of Way and Within the Las Cruces Service Territories. In accordance with the laws of the State of New Mexico, one the attached was published in its entirety time( s) in the Las Cruces BULLETIN, the first publication date being 3/ 1/ 13 and subsequent N/ A publications being Copies Arc Available for Inspection During Working Hours at the Office of the City Clerk. Witness My Hand and Seal of the City of Las Cruces on this the 20th day of February 2013. Esther Martinez - Carrillo, CIVIC City Clerk v Pub # 12756 Dates 3/ 1, 2013 Stephanie L. Griffin Sworn to and subscribed before me this 1 day of March 2013 in the CITY OF LAS CRUCES COUNTY OF DONA ANA STATE OF NEW MEXICO My Commission expires: October 28, 2015 Jacgk e NlZpllum - Notary Public 27. 21 Advertising Costs

www.lesun -news. corn low LAS CRUCES SUN ṈEWS PROOF OF PUBLICATION I, being duly sworn, Frank Leto deposes and says that he is the Publisher of the Las Cruces Sun - News, a newspaper published daily in the county of Dona Ana, State of New Mexico; that the notice 51581 is an exact duplicate of the notice that was published once a week/day in regular and entire issue of said newspaper and not in any supplement thereof for 1 consecutive week(s) / day( s), the first publication was in the issue dated February 24, 2013 and the last publication was February 24, 2013 Despondent further states this newspaper is duly qualified to publish legal notice or advertisements within the meaning of Sec. Chapter 167, Laws of 1937. Signed Publisher Official Position STATE OF NEW MEXICO ss. County of Dona Ana Subscribed and sworn before me this day of" L 1 7I NOTICE OF INTENT TO ADOPT The City Council of The City of Las Cruces, New Mexico, Hereby Gives Notice of Its Intent to Adopt The Following Ordinance at a Regular City Council Meeting to be Held on March 18, 2013: 1. Council Bill No. 13-025; Ordinance No. 2680: An Ordinance Granting a Franchise to the City of Las Cruces on Behalf of the Las Cruces Utilities to Construct, Operate and Maintain said Utilities On, Under and Within City Owned Rights of Way and Within the Las Cruces Service Territories. Copies Are Available for Inspection During Working Hours at the Office of the City Clerk. Witness My Hand and Seal of the City of Las Cruces on this the 20th day of February 2013. Esther Martinez - Carrillo, CMC City Clerk Publication # 51581 Run Date: Feb 24, 2013 V 1 ( Lat qj Notary Public in and for Ana County, New Mexico Donal lli My Term Expires OFFICIAL SEA MARIA ISABEL DEL VILLAR Notary Public State of New MYY Expires - co II

mwwkalw*4w. s_co. s LAS CRUCES SuN-NEws PROOF OF PUBLICATION I, being duly sworn, Frank Leto deposes and says that he is the Publisher of the Las Cruces Sun - News, a newspaper published daily in the county of Dona Ana, State of New Mexico; that the notice 51702 is an exact duplicate of the notice that was published once a week/day in regular and entire issue of said newspaper and not in any supplement thereof for 1 consecutive week(s) /day(s), the first publication was in the issue dated March 24, 2013 and the last publication was March 24, 2013 Despondent further states this newspaper is duly qualified to publish legal notice or advertisements within the meaning of Sec. Chapter 167, Laws of 1937. Signed Publisher Official Position NOTICE OF ADOPTION The City Council of The City of Las Cruces, New Mexico, Hereby Gives Notice of Its Adoption of The Following Ordinance at a Regular City Council Meeting Held on March 18, 2013: 1. Council Bill No. 13-025; Ordinance No. 2680: An Ordinance Granting a Franchise to the City of Las Cruces on Behalf of the Las Cruces Utilities to Construct, Operate and Maintain said Utilities On, Under and Within City Owned Rights of Way and Within the Las Cruces Service Territories. Copies Are Available for Inspection During Working Hours at the Office of the City Clerk. Witness My Hand and Seal of the City of Las Cruces on this the 19th day of March 2013. STATE OF NEW MEXICO ss. County of Dona Ana Subscribed and sworn before me this I day ot" I Esther Martinez - Carrillo, CMC City Clerk Publication# 51702 Run Date: Mar 24, 2013 Notary Public in and for Dona Ana County, New Mexico My Term )Expires OFFICIAL SEAL f '', MARIA ISABEL DEL VILLAR Notary Public State of New x l My Comm. Expires