The City Council is empowered to grant by ordinance a franchise
to any person, firm or corporation, whether operating under an existing
franchise or not, to furnish the City and its inhabitants with transportation,
communication, terminal facilities, water, light, heat, power, refrigeration,
storage or any other public utility or service, and to use the public
streets, ways, alleys and places, as the same now or may hereafter
exist, for the construction and operation of plants, works, or equipment,
necessary or convenient for the furnishing thereof, or necessary or
convenient for traversing any portion of the City for the transmitting
or conveying of any service elsewhere. The City Council may prescribe
the terms and conditions of any such grant. It may also provide, by
procedural ordinance, the method of procedure and additional terms
and conditions for making such grants, subject to the provisions of
this Charter.
Before granting any franchise, the City Council shall pass a
resolution declaring its intention to grant the same, stating the
name of the proposed grantee, the character of the franchise and the
terms and conditions upon which it is proposed to be granted. Such
resolution shall fix and set forth the day, hour and place when and
where any persons having any interest therein or any objection to
the granting thereof may appear before the City Council and be heard
thereon. It shall direct the City Clerk to publish said resolution
at least once within fifteen (15) days of the passage thereof, in
the official newspaper. The time fixed for such hearing shall not
be less than twenty (20) nor more than sixty (60) days after the passage
of said resolution.
At the time set for the hearing, the City Council shall proceed
to hear and pass upon all protests and its decision thereon shall
be final and conclusive. Thereafter it may grant, or deny, the franchise,
subject to the right of referendum of the people.
Every franchise shall state the term for which it is granted,
which, unless it be indeterminate as provided for herein, shall not
exceed twenty (20) years.
A franchise grant may be indeterminate, that is to say, it may
provide that it shall endure in full force and effect until the same,
with the consent of the Railroad Commission of the State of California,
shall be voluntarily surrendered or abandoned by its possessor, or
until the State of California, or some municipal or public corporation,
thereunto duly authorized by law, shall purchase by voluntary agreement
or shall condemn and take, under the power of eminent domain, all
property actually used and useful in the exercise of such franchise
and situate within the territorial limits of the State, municipal
or public corporation purchasing or condemning such property, or until
the franchise shall be forfeited for noncompliance with its terms
by the possessor thereof.
Any franchise granted by the City with respect to any given
utility service shall be in lieu of all other franchises, rights or
privileges owned by the grantee, or by any successor of the grantee
to any rights under such franchise, for the rendering of each such
utility service within the limits of the City as they now or may hereafter
exist, except any franchise derived under Section 19 of Article XI
of the Constitution of California as said section existed prior to
the amendment thereof adopted October 10, 1911. The acceptance of
any franchise hereunder shall operate as an abandonment of all such
franchises, rights and privileges within the limits of the City as
such limits shall at any time exist, in lieu of which such franchise
shall be granted.
Any franchise granted hereunder shall not become effective until
written acceptance thereof shall have been filed by the grantee thereof
with the City Clerk. Such acceptance shall be filed within ten (10)
days after the adoption of the ordinance granting the franchise and
when so filed, such acceptance shall constitute a continuing agreement
of such grantee that if and when the City shall thereafter annex,
or consolidate with, additional territory, any and all franchises,
rights and privileges owned by the grantee therein, except a franchise
derived under said constitutional provision, shall likewise be deemed
to be abandoned within the limits of such territory.
No franchise grant shall in any way or to any extent impair
or affect the right of the City to acquire the property of the grantee
thereof either by purchase or through the exercise of the right of
eminent domain, and nothing herein contained shall be construed to
contract away or to modify or abridge either for a term or in perpetuity
the City’s right of eminent domain with respect to any public
utility. Every franchise grant shall reserve to the City the right
to purchase the property of such utility either at an agreed price
or a price to be determined in a manner to be prescribed in the grant,
or in the procedural ordinance hereinabove mentioned. In fixing the
price to be paid by the City for any utility, no allowance shall be
made for franchise value (other than the actual amount paid to the
City at the time of the franchise acquisition), good will, going concern,
earning power, increased cost of reproduction, severance damage, or
increased value of right of way.
By its acceptance of any franchise hereunder, the grantee shall
covenant and agree to perform and be bound by each and all of the
terms and conditions imposed in the grant or by procedural ordinance,
and shall further agree to:
(a) Comply
with all lawful ordinances, rules and regulations theretofore or thereafter
adopted by the City Council in the exercise of its police power, governing
the construction, maintenance and operation of its plants, works or
equipment;
(b) Pay
to the City on demand the cost of all repairs to public property made
necessary by any of the operations of the grantee under such franchise;
(c) Indemnify
and hold harmless the City and its officers from any and all liability
for damages proximately resulting from any operations under such franchise;
(d) Remove
and relocate without expense to the City any facilities installed,
used and maintained under the franchise if and when made necessary
by any lawful change of grade, alignment or width of any public street,
way, alley or place, including the construction of any subway or viaduct;
and
(e) Pay
to the City during the life of the franchise, a percentage, to be
specified in the grant, of the gross annual receipts of the grantee
within the limits of the City, or such other compensation as the City
Council may prescribe in the grant.
The exercise by any person, firm or corporation of any privilege
for which a franchise is required, without procuring such franchise,
shall be a misdemeanor and each day that such condition continues
to exist shall constitute a separate violation.