CHAPTER XX. FRANCHISE AND PUBLIC UTILITIES1

1 Vote of people required.

No franchise shall be granted, extended or renewed by the City without the approval of a majority of the qualified electors residing within its corporate limits voting thereon at a general or special election; and the Council shall submit any matter for approval or disapproval to such electors at any general municipal election, or call a special election for such purpose at any time upon thirty (30) days’ notice; and the Council shall require, before calling any such general or special election, that the estimated expense thereof (to be determined by the Council) shall be first deposited by the applicant for such franchise with the City Clerk.

2 Franchise to be specific.

All franchises or privileges hereafter granted shall be specific in their terms and shall plainly specify on what particular geographical area and upon what specific type of public right-of-way or public property therein the same shall apply, and no franchise or privilege shall hereafter otherwise be granted by the City.

(Election of 3-8-2005, eff. 3-22-2005)

3 Regulation of rates, fares, service, etc.

Limited only by the constitution of the State of Arizona, the power to regulate the rates, fares and charges for public utility corporations is hereby reserved to the people, to be exercised by them by ordinance of the Council, or in the manner herein provided for initiating and referring an ordinance.

Any right or regulation shall further include the right to require the uniform, convenient and adequate service to the public, and reasonable extensions of such service and of such public utility works.

4 Ordinances granting rights, privileges, etc., to be unambiguous.

No franchise, right or privilege or license shall be considered as granted by any ordinance except when granted therein in plain and unambiguous terms, and any and every ambiguity shall be construed in favor of the City and against the claimant under such ordinance.

5 Stock issues in connection with franchises.

Every ordinance granting any franchise shall prohibit the issuing of any stock on account thereof by any corporation holding or doing any business under said franchise. Any violating of the terms off this section shall, at the option of the City, operate as a forfeiture of said franchise.

6 Additional taxes on property of public utilities.

The City shall have the right to license or tax street cars, telephones, gas meters, electric meters, water meters, or any other similar device for measuring services; also telephone, telegraph, electric light and power poles, subways and wires. The said license or tax shall be exclusive of and in addition to all other taxes upon the property of the holder thereof.

7 Policemen, firemen and mailmen to ride streetcars, etc., free.

The grant of every franchise for a street, suburban or interurban railroad shall provide that all United States mail carriers and all policemen and firemen of the City in uniform shall, at all times, while in the actual discharge of their duties, be allowed to ride on the cars of such railroad within the boundaries of the City, without paying therefor, and with all the rights of other passengers.

8 Authority of Council to order railroad companies to raise or lower their tracks.

The Council shall by ordinance require, under proper penalties, any railroad company, whether steam or electric, to elevate or lower any of its tracks running over, along or across any of the streets, avenues or alleys of the City, whenever in the opinion of the Council the public safety or convenience require.

9 Right of City to secure the public welfare, etc.

The grant of every franchise or privilege shall be subject to the right of the City, whether in terms reserved or not, to make all regulations which shall be necessary to secure, in the most ample manner, the safety, welfare and accommodation of the public, including among other things the right to pass and enforce ordinances to require proper and adequate extensions of the service of such grant, and to protect the public from danger or inconvenience in the operation of any work or business authorized by the grant of the franchise, and the right to make and enforce all such regulations as shall be reasonably necessary to secure adequate, sufficient and proper service, extensions and accommodations for the people and insure their comfort and convenience.

10 Exclusive franchises prohibited; renewal of franchises.

No exclusive franchise shall ever be granted, and no franchise shall be renewed before three (3) years prior to its expiration.

11 Leasing, etc., of franchises.

No franchise granted by the City shall ever be leased, assigned or otherwise alienated without the express consent of the City, and no dealing with the lessee or his assigns on the part of the City to require the performance of any act or payment of any compensation by the lessee or his assigns shall be deemed to operate as such consent.

12 Extension of franchises; side track and switch privileges.

No extension or enlargement of any franchise, or grant, or rights, or powers, previously granted to any corporation, person or association of persons, shall be made except in the manner and subject to all the conditions herein provided in this chapter for the making of original grants and franchises; provided, however, that the provisions of this Chapter shall not apply to the granting by ordinance of revocable licenses or privileges for side track or switch privileges, to railway companies for the purpose of reaching and affording railway connection and switch privileges to the owners or users of any industrial plant, warehouse or mercantile establishment it being the intention to permit the City to grant such revocable license or privilege to railway companies whenever in its judgment the same is expedient, necessary or advisable, and application for such a privilege is accompanied by the assent in writing of the owners of the major part of the frontage of the lots or tracts of land of the blocks fronting on each side of any street, or parts of a street, over or on which it is desired to lay or construct such side tracks or switches.

13 Common use of tracks, poles, etc.

The Council shall have the power by proper ordinance to provide, or to incorporate in the franchise or privilege granted, or to be granted, suitable provisions for the common use of the tracks, poles, or other property of the corporation securing the privilege or franchise, by other corporation carrying on the same or a similar kind of business; providing, however, for suitable compensation to the owner of such property, or for the free use thereof as the Council shall deem proper.

14 Annual reports required of franchise holders; inspection of books and property by City Manager.

The Manager shall have general supervision over all corporations operating under franchises or privileges granted them by the City, and shall at least once in each year demand and receive reports from all such corporations, covering the condition of the business, the gross earnings, the net earnings and the extent to which the franchise of such corporation is being exercised, and shall have the right to appoint one (1) or more persons to inspect the books and property of said corporation, for such purposes and to verify such reports; and any such failure to make such reports when demanded, or to permit such inspection, shall be ground, at the option of the Council, for the forfeiture of such franchise or privilege.

15 Franchise record to be kept; contents; applicability of section.

The Manager shall provide and cause to be kept in the office of the City Clerk a franchise record, indexed and of proper form in which shall be transcribed accurate and correct copies of all franchises and grants by the City to any person, persons or corporation, owning or operating any public utility. The index of said record shall give the name of the grantee and thereafter the name of any assignee thereof. Said record shall be a complete history of all franchises granted by the City and shall include a comprehensive and convenient reference to actions, contests or proceedings at law, if any, affecting the same, together with all reports and inspection reports as herein provided and such other matters of information and public interest as the Mayor or Manager may, from time to time, acquire, and such other matters as the Council may by ordinance direct. All annual and inspection reports may by direction of the Council be published once in the official newspaper of the City, or printed and distributed in pamphlet form, as the Council may deem best, and in case annual reports are not filed and inspections are not made as provided, the Mayor shall, in writing, report to the Council the reason therefor, which report shall be transcribed in the record of the person, persons or corporation owning or controlling said franchise or grant, and published in the official newspaper of the City, or printed and distributed in pamphlet form as the Council shall deem best.

The provisions of this section shall apply to all persons or corporations operating under any franchise now in force or hereafter granted by the City.

16 Account books.

Suitable books shall also be provided by the Manager for keeping account of the various moneys paid in by persons or corporations in connection with franchises or privileges granted by the City, and such books of account shall always be open for examination by proper City officials or any citizen of the City.

17 Time limit of franchises; compensation to City.

No franchise shall be granted, extended or renewed by the City for a period longer than twenty-five (25) years from the date of granting such franchise, and the Council shall provide in each and all such franchises and grants suitable compensation to the City, to be figured and based on the gross earnings, or the value of the property used by such grantee in connection with such franchise, as to the Council may seem proper, and for the best interest of the City. The franchise may also include additional compensation to the City for the cost of relocating the grantee’s facilities in the public right-of-way due to design and construction of a transportation system to transport passengers by rail, the rail system, and provisions for payment to grantee from such additional compensation if grantee relocates such facilities due to the design and construction of the rail system at its own costs with satisfactory documentation of such relocation costs to the City.

(Election of 3-8-2005, eff. 3-22-2005)

18 Purchase of public utilities by City; conditions of grants; right of City to operate or sell plants and property acquired.

Every grant of a franchise or right shall provide that the City may upon payment thereof of its fair valuation, to be made as provided in the grant, purchase and take over the property and plant of the grantee in whole or in part.

The procedure to effect such purchase shall be as follows: When the Council shall, by resolution, direct the Manager to ascertain whether any such property, or part thereof, should be acquired by the City, or in the absence of such action of the Council, when a petition subscribed by ten (10) per centum of the qualified tax paying electors requesting that the Manager shall ascertain whether any such property, or part thereof should be acquired by the City, shall be filed with the City Clerk, the Manager shall forthwith carefully investigate said property and report to the Council:

(1)    At what probable cost said property may be acquired.

(2)    What, if any, probable additional outlays would be necessary to operate the same.

(3)    Whether, if acquired, it could be operated by the City at a profit or advantage in quality or cost of service, stating wherein such profit or advantage consists.

(4)    Whether, if acquired, it could be paid for out of its net earnings, and if so, within what time.

(5)    Such other information touching the same as he shall have acquired.

Such report shall be made in writing, shall include a statement of facts in relation thereto with such particularity as will enable the Council to judge of the correctness of his findings, and immediately after submission to the Council, shall be filed with the City Clerk, recorded in the Public Utility Record, and published once in the official newspaper of the City, or printed and distributed in pamphlet form, as the Council may direct.

(a)    If, within sixty (60) days after the filing of said report, a petition be filed with the City Clerk subscribed by fifteen (15) per cent of the qualified electors of the City, as provided in Chapter XV of this Charter, and requesting that there be submitted to a vote of the qualified electors the proposition whether or not the City shall acquire said property, the Council shall provide by ordinance for the submission of the proposition to a vote of the qualified electors.

(b)    Every grant reserving to the City the right to acquire the plant, as well as the property, if any, of the grantee, situated in, on, above or under any of the streets, avenues, alleys or public places in the City, or elsewhere, used in connection therewith, shall in terms specify the method of arriving at a valuation thereof, and shall further provide that, upon the payment by the City of such valuation, the plant and property so valued, purchased and paid for shall become the property of the City by virtue of the grant and payment thereunder; and every such grant shall make adequate provision by way of forfeiture of the grant, or otherwise, for the effectual securing of efficient service and for the continued maintenance of the property in good order and repair throughout the entire term of the grant.

(c)    Whenever any plant or property shall become the property of the City it shall have the right to operate the same on its own account, or by ordinance to sell the same to the highest bidder at public auction, but no sale thereof shall be made until submitted to and approved by the people as in the manner provided by Chapter XVI of this Charter.

19 Additional conditions of grants.

The enumeration and specification of particular matters in this Charter which must be included in every grant shall not be construed as impairing the right of the Council to insert in such franchise or grant, such other and further matters, conditions, covenants, terms, restrictions, limitations, burdens, taxes, assessments, rates, fares, rentals, charges, control, forfeiture, or any other provision whatever which the Council shall deem proper to protect the interests of the people.

20 Temporary permits and licenses for use of streets, alleys, etc.

The Manager shall have the right and power to issue revocable temporary permits and licenses to any person, association or corporation operating under a franchise or grant from the City, for the purpose of temporarily making use of a part of the streets, avenues, alleys or other public places in the City, for the better carrying out of the object of the said franchise or grant and as an aid for rendering better or more convenient service to the people of the City, or such of them to whom such service is or might be rendered within the contemplation of such franchise or grant; such license or permit to be subject to revocation or discontinuance at any time in the discretion of the Manager or Council, and shall be subject to such restrictions, limitations, burdens and regulations as the Council may impose. The licensee or permittee of such licensee or permit, upon receiving notice from the Manager of the revocation of such license or permit, shall forthwith remove any property or obstruction on, in or under any street, avenue, alley, public place or building described in such notice; and, upon failure to remove said property or obstruction immediately upon the receipt of such notice, the licensee or permittee of such license or permit revoked, and all other persons acting for or in behalf of such licensee or permittee, operating upon or using any street, avenue, alley or public place or building for the operation or use of which the license or permit therefor is revoked, shall be considered and treated as trespassers, be removed therefrom, and shall be guilty of a misdemeanor.


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State Law referencePublic utilities, A.R.S. § 9-501 et seq.