In addition to the city's power to buy, construct, lease, maintain, operate and regulate public utilities and to manufacture, distribute and sell the output of such utility operations, the city shall have such further powers as may now or hereafter be granted under the Constitution and Laws of the State of Texas.
The right of control and use of the public streets, highways, sidewalks, alleys, parks, public squares and public places of the city, including all that above and below, is hereby declared to be inalienable by the city except by ordinances not in conflict with the provisions of this charter. The city council shall have the power by ordinance to grant, renew and extend all franchises of all public utilities of every character operating within the city and, with consent of the franchise holder, to amend the same. No franchise shall be granted for an indeterminate term and no franchise shall be granted after the effective date hereof for a term of more than twenty-five (25) years. No public utility franchise shall be transferred by the holder thereof except with the approval of the city council expressed by ordinance. No act or omission by the council or any officer or agent of the city shall be construed to grant, renew, extend, or amend, expressly or by estoppel or implication, any right, franchise, or easement affecting said public streets, highways, sidewalks, alleys, parks, public squares, public places and other real property, except as provided in this charter.
The right to use the public streets, highways, alleys and thoroughfares of this city, which necessitates the digging up or displacement thereof, for the installation of equipment, appliances or appurtenances, either on, above or below the surface of same, to make the intended use thereof practicable, shall be deemed and considered "a franchise", granting of which shall be governed and controlled in the manner herein provided.
The use of the said public streets, highways, alleys or highways for the installation of equipment, appliances or appurtenances, to make the intended use possible, shall be treated and considered as "a privilege" subject to the control and disposition of the city council, and such privilege over and under the said public streets, alleys, highways, and thoroughfares of the city shall not be granted to any person or corporation excepting when public necessity and convenience may require such use and when given by ordinance passed by a majority vote of the city council present and voting.
All franchises for the use and occupancy of public streets, highways, alleys and thoroughfares of the city shall, in the event public necessity and convenience so require, be subject to cancellation by the city council; and the City of Sherman reserves the right to require all public utilities holding franchises from the City of Sherman to conform to street grades, and alter or lower their existing structures to meet changing conditions.
The City of Sherman shall have the power by ordinance to grant any franchise or right mentioned in the preceding sections hereof, which ordinance shall not be passed and adopted until its second and final reading and shall be at two (2) separate regular meetings of the city council of the City of Sherman, the last of which shall take place not less than thirty (30) days from the first. No ordinance granting a franchise shall pass any reading except by a majority vote of the city councilmembers present and voting and such ordinance shall take effect immediately upon signature of the mayor, the deputy mayor, or automatically seven (7) days after its adoption; provided, however, that if at any time before such ordinance shall finally take effect a petition shall be presented to the city council signed by not less than five hundred (500) of the bona fide qualified voters of the City of Sherman, the city council shall submit the question of the granting of said franchise to a vote of the qualified voters of the City of Sherman at the next succeeding general election to be held in said city, provided that notice thereof shall be published at least twenty (20) days successively in the official newspaper of the City of Sherman prior to the holding of said election. Ballots shall be used briefly describing the franchise to be voted on and the terms thereof and containing the words, "For the granting of a franchise," and "Against granting a franchise." The vote shall be canvassed by the governing body and, should it result in a majority of those voting thereon casting their votes "For the granting of a franchise," then, by order entered in its minutes, the city council shall so declare and said franchise shall at once take effect. But should a majority of such votes be cast "Against granting a franchise," as ascertained by the city council, then said city council by order entered in its minutes shall so declare and such franchise shall not take effect. In case a franchise is refused by the city council, then the matter may be submitted to the qualified voters by petition, as hereinabove provided, and a failure to finally pass on an application within six (6) months after the filing of such application shall be construed as a refusal. The city council, in passing an ordinance granting a franchise, may provide therein that it shall not take effect until the same shall have been submitted to and approved by a majority of the qualified voters voting therein at a general election. The franchise shall be published prior to the second reading by the city council, and all expenses of publication shall be borne by the applicant for the franchise, who shall make a deposit in advance to cover the estimated cost of publication, to be determined by the city manager.
Provisions governing the granting of a franchise shall be as follows:
(a) 
No exclusive franchise or privilege shall ever be granted, nor a franchise nor a privilege to commence at any time after six (6) months subsequent to the effective date of the ordinance granting the same.
(b) 
No franchise shall be directly or indirectly extended beyond the term originally fixed by the ordinance granting the same, except as provided by the terms of the city charter.
(c) 
No franchise shall be granted to any person, firm or corporation, their associates, assigns or successors, to acquire the physical property, rights, or franchise of another person, firm or corporation to whom or which a franchise has already been granted by the City of Sherman extending beyond the time of the expiration of the franchise of the person, firm or corporation selling such physical properties, rights or franchise unless the public welfare will be promoted by permitting or requiring the properties of two (2) or more companies doing the same character of business to be under one common ownership. The City of Sherman may grant a franchise for such properties, allowing or requiring the ownership of such properties to become vested in one ownership or one corporation, provided that no debts or obligations of any of the said companies so consolidated shall be assumed by the corporation, person or association of persons acquiring the ownership of such properties, except such debts and obligations of said companies or either of them which could, at the time of the creation of such indebtedness, lawfully be created under the Constitution and Laws of the State of Texas, and only to the extent that the assumption of such indebtedness is permitted under the provisions of the ordinance granting such franchise, and the amount of such indebtedness shall be fixed or limited in such ordinance, and the same shall not thereafter be increased except by such actual moneys as may hereafter be expended pursuant to the rules and regulations to be formulated by the city council from time to time.
(d) 
No franchise shall be renewed before one year prior to its expiration.
(Ordinance 3048, sec. 2(29), adopted 4/5/75; Ordinance 4745, sec. 2, adopted 3/8/99; Ordinance 4927, sec. 4(6), adopted 5/5/01; Sec. 2 amnd. by amendment 2 approved at an election held November 2, 2010 and certified by Resolution 5535 adopted 11/15/10)
No determinate or fixed term franchise shall ever be granted for a longer term than twenty-five (25) years, nor shall any right, privilege or franchise now in existence be extended beyond the period now fixed for its termination, directly or indirectly, or through any means whatsoever, and any ordinance in violation or evasion of this prohibition shall be absolutely void; provided, however, that any corporation, person or association of persons now holding any franchise under any charter or charters or ordinances of the City of Sherman, may, with the consent of the City Council of the City of Sherman, surrender such franchise or franchises, subject to the provisions of the city charter then in force, and take a new franchise under such charter, or a new franchise may be granted to a new company or another person with the privilege of acquiring the properties of such franchise holder upon the surrender of the franchise rights then held. No subsidiary franchise or franchises of any character appertaining or relating to any other franchise holder or to any person, firm or corporation acting directly or indirectly for such franchise holder, shall be granted, and such grant in violation of this prohibition shall be absolutely void to the extent of the excess in time beyond the life of such main franchise. No franchise, privilege or easement shall ever be used or operated so as to extend or enlarge any other franchise or privilege granted by said city except upon surrender of such original franchise as herein provided, and any violation of this prohibition shall operate as a forfeiture of each and all such franchise privileges or easements. No holder of a franchise heretofore or hereafter granted shall have a right (unless such right is granted in the franchise) to transfer or assign its properties and franchise to any other person, firm or corporation without the consent of the city, and such consent when given shall not operate as the granting of a franchise or as a new franchise.
The city council shall have the power to compel all persons, firms or corporations operating any public utilities in this city, whether operating under existing franchise or franchises that may be hereafter granted, to extend their service, lines, pipes, etc., if the person to be benefited by such extension will pay the costs hereof, or if it can be shown that the revenue resulting from such extension will, within a reasonable time after same is made, pay a reasonable return on the investment, after making the customary allowance for depreciation.
All public utility franchises in the City of Sherman shall be held, whether expressed in the ordinance or not, subject to the right of the city (each of the following being a condition), after public hearing and reasonable notice:
(a) 
To repeal the same by ordinance at any time for failure to begin construction or operation within the time prescribed or otherwise to comply with the terms of the franchise, such power to be exercised only after due notice and hearing.
(b) 
To require an adequate extension of plant and service, and the maintenance of the plant and fixtures at the highest reasonable standard of efficiency.
(c) 
To establish reasonable standards of service and quality of products and prevent unjust discrimination in service or rates.
(d) 
To prescribe the form of the accounts kept by each utility and to require reports on the operations of the utility including such form and containing such information as the council may by order prescribe, which shall include accurate information in every particular of all additions or replacement of any and every kind made during the preceding year.
(e) 
At any time to examine and audit the accounts and other records of any such utility and to require annual and other reports, including reports of local operations by each such public utility.
(f) 
To impose such reasonable regulations and restrictions as may be deemed desirable or conducive to the safety, welfare and accommodation of the public.
(g) 
To fix and regulate the price and rates for the service to be performed under the franchise.
(h) 
To require such compensation, rental and tax as may be permitted by the Laws of the State of Texas.
(i) 
To declare, after a hearing, a forfeiture of any such franchise by ordinance for failure of the holder thereof to comply with the terms of this franchise. Such power shall be exercised only after written notice to the franchise holder stating wherein the franchise holder has failed to comply with the terms of the franchise and setting a reasonable time for the correction of such failure.
(j) 
To require every franchise holder to furnish to the city, without costs to the city, full information regarding the location, character, size, length, and terminals of all facilities of such franchise holder in, over, and under the streets, alleys and other public property of the city, and to regulate and control the location, relocation and removal of such facilities.
(k) 
To collect from every public utility operating in the city such proportion of the expense of repairing and maintaining public places of the city as represents the increased cost of such public places resulting from the occupancy of such public places by such public utility and such proportion of such operations as result from the damage to or disturbance of such public places caused by such public utility.
(l) 
To require every franchise holder to allow other public utilities to use its poles and other facilities, including bridges and viaducts, whenever in the judgment of the council such use shall be in the public interest; provided that in such event a reasonable rental shall be paid such owner of facilities for such use and further provided:
(1) 
That no franchise owner shall be required, under the purview of this subsection, to permit a public utility engaged in direct competitive business to use the facilities of such franchise holder.
(2) 
That the city shall not, under the purview of this subsection, impair the validity of existing contract between public utilities concerning the use of their respective facilities.
(3) 
That the city shall not, under the purview of this subsection, impair the enforcement by any such franchise holder of the usual accepted industry standards of safety regulations with respect to the use of facilities.
Every public utility franchise hereafter granted shall be subject to the terms and conditions of this charter, whether such terms and conditions are specifically mentioned in the franchise or not.
The city council shall have the power by ordinance to fix and regulate, after public hearing and reasonable notice, the price of water, gas, and electric power, and to regulate and fix the fares, tolls, and charges of local telephone service and charge of all public vehicles used for hire, whether transporting passengers, freight or baggage, and generally to fix and regulate the rates, tolls, and charges of all public utilities of every kind operating within the corporate limits of the City of Sherman.
Prior to the purchase of any existing franchised public utility system, either according to the terms of the franchise or by eminent domain, the city council must submit the question of the purchase to the qualified voters of the City of Sherman, and the same must be approved by a majority of those voting in the election.
The director of public works shall have authority to compel the making of sewer, water, gas and other connections whenever, in view of contemplated street improvements or as a sanitary regulation, sewer, water, gas and other connections should in his or her judgment be constructed. He or she shall cause written notice of his or her determination thereof to be given to the owner of each lot or parcel of land to which such connections are to be made, which notice shall state the number and character of connections required. Such notice shall be served by a person designated by the director of public works, in the manner provided for the service of process in civil actions in state courts. Nonresidents of the city, or persons who cannot be found, may be served by one publication of such notice on the City's official website. The notice shall state the time within which connections shall be constructed; and, if they be not constructed within the said time, the work may be done by the city, and the cost thereof, together with a penalty of five percent (5%), assessed against the lots and lands for which such connections are made. Said assessments shall be certified and collected as other assessments for street improvements.
(Ordinance 6247 adopted 9/3/19)
The city council shall have the power by ordinance to grant to any owner of property abutting upon the streets or other property of the city, the use thereof, or to go over or under the same in any manner which may be necessary or proper to the enjoyment of said abutting property by the owner; provided, however, that such use be not inconsistent with, and does not unreasonably impair, the public use to which said street or other public property may be dedicated, or the use being made of the same by a public service franchise holder from the city. The city council shall fix the terms, conditions, and fees of any such grant, and the time for which it shall exist. Whether expressed or not, the right is expressly reserved to the city, acting through the city council, to terminate such license when deemed inconsistent with the public use of the property of the city, and when the same may become a nuisance.
The city council shall have the power to grant minor or temporary privileges in the streets, public ways, and public places of the city by ordinance or resolution. Such permit shall be unconditionally revocable at the will of the city council, and shall not be deemed to be a franchise as used in this charter.