APPENDIX B – FRANCHISESAPPENDIX B – FRANCHISES\ORDINANCE NO. 829 (ELECTRIC)

AN ORDINANCE, granting to The Victory Electric Cooperative Association, Inc., its successors and assigns, an electric franchise, prescribing the terms thereof and relating thereto, and repealing all ordinances or parts of ordinances inconsistent with or in conflict with the terms hereof.

BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BUCKLIN, KANSAS:

SECTION 1. That in consideration of the benefits to be derived by the City of Bucklin, Kansas, and its inhabitants, there is hereby granted to The Victory Electric Cooperative Association, Inc., a Kansas Corporation, hereinafter designated as "Company", said Company being an electrical cooperative corporation operating a system for the transmission of electric current between two or more incorporated cities in the State of Kansas, into and through which it has built or acquired transmission lines, the right, privilege, and authority for a period of twenty (20) years from the 16th day of September, 2008, to occupy and use the several streets, avenues, alleys, bridges, parks, public rights of way, and public places of the City, for the placing and maintaining of equipment and property necessary to carry on the business of selling and distributing electricity for all purposes to the City of Bucklin, Kansas, its inhabitants and additions thereto, and through said city and beyond the limits thereof, to obtain said electricity from any source available; and to do all things necessary to carry on the business of selling electricity from any source available; and to do all things necessary or proper to carry on such business in the City of Bucklin, Kansas.

SECTION 2. As further consideration for the granting of this franchise, and in lieu of any City occupation, license or other revenue taxes, the Company shall return to the City during the term of this franchise, Two Percent (2%) of its gross revenue from all sales of electric energy within the corporate limits of the City, commencing on the date of the franchise, and continuing at such rate for a period of one year, and then at the rate of two and one-half percent (2.5%) for the next succeeding one year, and then at the rate of three percent (3%) for the next succeeding one year, and then at the rate of three and one-half percent (3.5%) for the next succeeding one year, and then at the rate of four percent (4.0%) for the next succeeding one year, and then at the rate of four and one-half percent (4.5%) for the next succeeding one year, and then at the rate of five (5.0%) for the remainder of the franchise period. The City may reconsider the franchise rate every 24 months, commencing on the date of the franchise. At the end of such initial two-year term, the City of Bucklin may establish any rate not to exceed Five Percent (5.0%), for the next succeeding two-year period, and may likewise establish a new rate at the two-year anniversary of each succeeding two-year period during the term of this franchise, so long as the rate does not exceed Five Percent (5.0%). The City must give written notice of a rate change to the Company at least 60 days prior to the expiration of a two-year period, and if no notice is given, then the existing rate shall continue until the expiration of the following two-year period. All such payments of franchise fees shall be made semi-annually for the preceding semi-annual period.

SECTION 3. That the Company, its successors, and assigns, in the construction, maintenance, and operation of its electric transmission, distribution, and street lighting system, shall use all reasonable and proper precaution to avoid damage or injury to persons or property, and shall hold and save the City of Bucklin, Kansas, from any and all damage, injury, and expense caused by the sole negligence of said Company, its successors and assigns, or its or their agents or servants. SECTION 4. That within sixty (60) days from and after the passage of the approval of this ordinance, the Company shall file with the City Clerk of the City of Bucklin, Kansas, its unconditional written acceptance of this ordinance.

SECTION 5. That any and all ordinances in conflict with the terms hereof are hereby repealed.

SECTION 6. That this ordinance shall become effective and shall be and become a binding contract between the parties hereto, their successors and assigns, from and after its passage, approval, publication as required by law, and acceptance by the Company.

SECTION 7. That this ordinance, when accepted as above provided, shall constitute the entire agreement between the City and the Company relating to this franchise and the same shall supercede and cancel any prior understandings, agreements, or representations regarding the subject matter hereof, or involved in negotiations pertaining thereto, whether oral, or written.

SECTION 8. This franchise is granted pursuant to the provisions of K.S.A. 12-2001.

SECTION 9. Should the Kansas Corporation Commission take any action with respect to this franchise ordinance which would or may preclude The Victory Electric Cooperative Association, Inc., from recovering from its customers and cost provided for hereunder, the parties shall renegotiate this franchise and ordinance in accordance with the ruling of the Kansas Corporation Commission.

(09-09-2008)