Ordinance 9 of 2007

(Granting to Utah Transit Authority a Commuter Rail Franchise)

WHEREAS, Utah Transit Authority (“UTA”), is undertaking a project consisting of the acquisition, construction and operation of a commuter rail public transportation system, which shall provide public transportation to passengers through a corridor extending along the Wasatch Front (the “System”); and

WHEREAS, as part of the proposed System, UTA intends to construct and operate a double track rail line that will pass through the City generally parallel to the existing Union Pacific Railroad Company trackage, and intersect or otherwise utilize various City streets, rights-of-way and other City property described herein (collectively, and as more particularly described herein, the "Franchise Area"); and

WHEREAS, UTA has requested that the City grant UTA a franchise for the construction, operation, maintenance, repair and replacement of portions of the System over, upon and across the Franchise Area; and

WHEREAS, the City, in the exercise of its police power, ownership, use or rights over and in the public rights-of-way, and pursuant to its other regulatory authority, believes it is in the best interests of the public to provide to UTA a non-exclusive franchise for such purpose; and

WHEREAS, the City and UTA propose to enter into a Franchise Agreement, the substantially final form of which has been presented to the City Council at the meeting at which this Ordinance is being considered for adoption (the “Agreement”); and

WHEREAS, the City desires to approve the execution and delivery of such Agreement and to otherwise take all actions necessary to grant the referenced franchise to UTA; and

WHEREAS, the City believes this Ordinance to be in the best interests of the residents of the City,

NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, as follows:

SECTION 1. Short Title. This Ordinance shall be known as the “UTA Commuter Rail Franchise Ordinance.”

SECTION 2. Grant of Franchise. (a) There is hereby granted to UTA, in accordance with the terms and conditions of the Agreement, the right, privilege, and franchise (collectively, the “Franchise”), to locate, construct, operate, maintain, replace and repair the Rail Line (as such term is defined in the Agreement)(collectively, the "Use of the Franchise Area"), over, upon and through City streets, rights-of-way and other City property within the Franchise Area, subject to the provisions of this Agreement.

(b) UTA acknowledges that (i) the City may have previously granted franchises affecting the Franchise Area, (ii) various public and private utility facilities may be situated within the Franchise Area, and (iii) no right of action in favor of UTA and against the City relating in any way to the existence of utility lines or facilities, or for damages of any kind against the City relating to such utility lines and facilities or the existence of prior franchises, shall arise or be deemed to arise from this Ordinance or the Agreement.

(c) The rights granted UTA herein are non-exclusive. The City retains the right to locate, construct, operate, maintain, replace and repair other facilities in the Franchise Area, and to grant to third parties the right to locate, construct, operate, maintain, replace and repair other facilities in the Franchise Area, provided that each of the following conditions is satisfied:

(i) The location, construction, operation, maintenance, replacement and repair of the other facility does not unreasonably interfere with UTA’s Use of the Franchise Area;

(ii) The location, construction, operation, maintenance, replacement and repair of the other facility shall not commence without first obtaining a UTA Access Permit as required by Section 4 of the Agreement.

(iii) All costs associated with the installation of other facilities in the Franchise Area are borne by parties other than UTA.

(d) The rights granted to UTA herein and in the Agreement do not include the right to attach or locate any of UTA's facilities to or on, or otherwise utilize, any City-owned facilities or structures, including without limitation light poles, towers, buildings and trees.

(e) The City makes no warranties, either express or implied, regarding the nature, extent or status of its title to the property within the Franchise Area, or the existence or non-existence of rights in third parties that may be superior to the franchise rights granted to UTA hereunder and under the Agreement. In addition, UTA recognizes that certain property within the proposed System corridor belongs to the State of Utah or other third parties, and the City makes no representations or warranties whatsoever with respect to such property. In the event UTA finds it necessary to acquire additional rights from third parties, the City shall have no obligation to pay, or to reimburse UTA for the payment of, any costs related to such acquisition, or in connection with any litigation challenging UTA’s Use of the Franchise Area.

(f) The Franchise Area which UTA is authorized to use pursuant to this Ordinance and the Agreement shall be that area described on Exhibit A attached hereto.

(g) This Ordinance is adopted, and the Franchise is granted, subject to all of the terms and conditions of the Agreement, the substantially final form of which is attached hereto as Exhibit B, and which is incorporated herein and made a part hereof as fully and completely as if set forth herein. This Ordinance contains a summary of certain provisions of the Agreement. Reference is hereby made to the Agreement for a full and complete description of such terms and conditions. Any differences or discrepancies between this Ordinance and the Agreement shall be resolved in favor of the Agreement.

SECTION 4. Term. Subject to the provisions of Section 11 of the Agreement, the Franchise shall be operative for an initial term of fifty (50) years. Subject to the last sentence of this Section 4, the initial term shall be automatically renewed for one (1) additional term of fifty (50) years; provided, however, that if, at least 180 days prior to the expiration of the initial term, the City notifies UTA of one or more significant concerns regarding UTA's Use of the Franchise Area (whether or not the matters of concern are addressed by or constitute a default under this Ordinance or the Agreement), and such concerns are not corrected by UTA to the satisfaction of the City, or an appropriate amendment to this Ordinance or the Agreement is not executed within such 180 day period, the City shall not be obligated to renew the term of the Franchise, in which event the rights of UTA hereunder shall terminate at the end of the initial term. The parties do not intend that the term of the Franchise shall exceed any limitation imposed by law, including without limitation the Interlocal Cooperation Act, Title 11, Chapter 13, Utah Code Annotated 1953, as amended (the “Interlocal Act”), and agree to comply with any applicable requirements of the Interlocal Act in connection with any renewal of the term of the Franchise.

SECTION 5. Acceptance by UTA. Within thirty (30) days after the effective date of this Ordinance, UTA shall execute and deliver to the City Recorder of the City, a copy of the Agreement. Such execution and delivery of the Agreement shall constitute the unqualified acceptance by UTA of this Ordinance and the Franchise. Failure by UTA to execute and deliver the Agreement as provided herein shall render this Ordinance and the rights granted hereunder null and void.

SECTION 6. Consideration and Payment. (a) The fair market value of the Franchise Area is as calculated on Exhibit C attached hereto. In consideration for the rights for Use of the Franchise Area granted by the City to UTA, UTA agrees to issue to the City, without cost to the City, Eco Passes in the number, for the years, and on the conditions described in Exhibit D attached hereto (the “Eco Passes”). The City estimates that the Eco Passes have a net present value to the City of approximately $520,000. In addition to the Eco Passes, UTA (i) has incurred, at the request of the City, certain significant out-of-pocket engineering, survey, management and related costs to accommodate the City’s land use needs and requirements with respect to the Rail Line alignment in the Grant Tower area of the City, and (ii) will incur certain significant costs associated with the design and construction of the quiet zone improvements as provided in Section 7 of the Agreement. The City and UTA agree that the sum of the value of the Eco Passes, the value of the items specified in subparagraphs (i) and (ii) above, plus the value of the potential future bicycle corridor provided for in subparagraph (b), equals or exceeds the fair market value of the Franchise Area, as set forth in Exhibit C. Such consideration shall satisfy (i) all of UTA’s franchise fee payment obligations through the end of the initial 50-year term provided in Section 4 of this Ordinance, and (ii) any obligations of UTA with respect to replacing the South Temple Street right-of-way and 500 West Street right-of-way. The rights granted by the City to UTA for the use of South Temple Street and 500 West Street shall not be subject to Section 5(d) or Section 11 of the Agreement.

(b) Bicycle Corridor. UTA agrees to negotiate with the City in good faith for the grant of a license for a bicycle/pedestrian/recreational trail within UTA right of way on the terms and conditions generally available to local governments similar to those set forth in Exhibit H of the Agreement.

SECTION 7. Rights Reserved to the City. Without limitation upon the rights which the City might otherwise have, the City hereby expressly reserves the following rights, powers and authorities, except as modified by the Agreement or the Interlocal Agreement (as defined in the Agreement):

(a) To exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the City;

(b) To grant additional franchises within the City to other persons for the conduct of services under any conditions whatsoever acceptable to the City, notwithstanding the same might later be alleged to be more favorable than the rights granted herein;

(c) To exercise any other rights, powers, or duties required or authorized to be exercised by the City under the Constitution of the State of Utah, the laws of the State of Utah, or City ordinances; and

(d) To grant additional franchises through, upon, over, or under the subject Franchise Area, and to utilize the Franchise Area for its own purposes, including the construction, installation, operation, maintenance, repair, replacement and removal of City Utilities (as defined in the Agreement), on the conditions set forth in Section 2 of this Ordinance.

SECTION 8. Police Powers. UTA acknowledges the right vested in the City pursuant to general law to exercise its police powers for the protection of the health, safety and welfare of its citizens and their properties. Nothing in this Ordinance or the Agreement shall be construed as precluding the City from exercising such powers in connection with the System, except with respect to matters specifically addressed in this Ordinance, the Agreement or the Interlocal Agreement, and then only to the extent of the express terms of this Ordinance, the Agreement or the Interlocal Agreement.

SECTION 8. Early Termination or Revocation of Franchise. The City may terminate or revoke the Franchise and all rights and privileges herein provided in accordance with the terms of the Agreement.

SECTION 9. This Ordinance shall take effect immediately upon publication of a summary hereof, as certified by the City Recorder in accordance with Section 10-3-713, Utah Code Annotated.

Passed by the City Council of Salt Lake City, Utah, this 20^th day of March, 2007.

Bill No. 9 of 2007.

Published: April 16, 2007.