Sec. 128. - Inalienability of public property.

The ownership, right of control and use of the streets, highways, alleys, parks, public places and all other real property of the city is hereby declared to be inalienable by the city, except by ordinances passed by vote of a majority of the council as hereinafter provided; and no franchise or easement involving the right to use the same, either along, across, over or under the same, shall ever be valid, unless expressly granted and exercised in compliance with the terms hereof, and of the ordinances granting such use. No act or omission of the city, its council, officers or agents shall be construed to confer or extend by estoppel or indirection, any right, franchise or easement not expressly granted by ordinance.

Sec. 129. - Franchise power of the city.

The city shall have the power, subject to the terms and provisions hereof, by ordinance to confer upon any person, firm or corporation the franchise or right to use the property of the city, as defined in the preceding section, for the purpose of furnishing to the public any general public service, including, without limitation, however, heat, light, power, telephone service, refrigeration, steam, and the carrying of passengers for hire whether over designated routes or not within the city or its suburbs over the streets, highways and property of the city, or for any other purpose, whereby a general service is to be furnished to the public for compensation or hire, to be paid to the franchise holder, whereby a right to, in part, appropriate or use the streets, highways or other property of the city is necessary or proper. The provisions hereof with references to public utilities shall not apply to those owned by the city.

Sec. 130. - Limitations on franchises.

No exclusive franchise or privilege shall ever be granted, nor a franchise nor a privilege to commence at any time after six months subsequent to the taking effect of the ordinance granting the same. No franchise or privilege shall be extended directly or indirectly beyond the term originally fixed by the ordinance granting the same.

An application for the renewal of a franchise or the granting of a new one may be considered and acted upon prior to the expiration date of the current franchise so that the new franchise may take effect upon the expiration date of the other; provided, however, that the procedure prescribed herein for the original granting of such franchise is followed in all particulars.

Sec. 131. - Granting of franchises.

The city shall have the power by ordinance to grant any franchise or right mentioned in the preceding sections hereof, which ordinance shall not be passed finally until its third and final reading, which readings shall be at three separate regular meetings of the council, the last of which shall take place not less than thirty days from the first. After the passage of the ordinance on its first reading, it shall be published once in a newspaper of general circulation in the city, advising all persons that a public hearing will be held on this franchise on the date stated. No ordinance granting a franchise shall pass any reading except by a vote of the majority of the council and such ordinance shall not take effect until sixty days after its adoption on its third and final reading; provided, however, the ordinance shall be subject to referendum as provided by this Charter or now or as hereafter may be provided by the general laws of Texas.

Sec. 132. - Powers of city over franchise holders.

The city shall have the right and power, acting through the council, to determine, fix and regulate the charges, fares or rates of any person, firm or corporation enjoying or that may enjoy a franchise or exercise any other public privilege in said city and to prescribe the kind of service to be furnished by such person, firm or corporation, and the manner in which it shall be rendered, and from time to time to alter or change such rules, regulations and compensation. The city shall have the power and authority to require extensions, betterments and improvements of the service that may be rendered by the holder of a franchise and shall likewise have the power to prevent the making of unnecessary or unprofitable extensions.

Sec. 133. - Annual reports and statements required of franchise holders.

Every person, firm or corporation holding a franchise or enjoying an easement of any sort through, under or from the city shall be required to prepare and file annually with the council, within sixty days after the close of a fiscal year, a true, full and correct statement based upon the condition at the close of such fiscal year and the transactions for the current year which shall exhibit:

(a)

The amount of all stock issues of such corporation and the divisions thereof.

(b)

An itemized statement of indebtedness, its nature and division, whether floating or bonded, and the interest payable on each item thereof.

(c)

An itemized statement of income and the amounts derived from each source of income.

(d)

An itemized and detailed statement of expenditures.

(e)

An itemized statement of all property of every kind owned and used in rendering the public service, wherever situated and the location and fair market value of each item thereof.

Said annual statement shall be verified by oath of the person, a member of the firm or a duly authorized officer or agent of the corporation, and upon its filing shall become part of the permanent records of the city.

If any person, firm or corporation required to file such report shall fail to do so as herein provided, such failure shall be ground for forfeiture of the franchise and it shall be the duty of the city attorney, after due notice to the grantee of such intention, to bring suit within a reasonable time in the district court to forfeit the franchise granted and if it shall appear to the court that such person, firm or corporation has wilfully failed to make such report, it shall render judgment in the case decreeing a forfeiture of such franchise and of all rights accruing thereunder.

Sec. 134. - Conditions of franchises.

Each franchise granted by the council shall provide:

(1)

For the compensation to be paid to the city for the use and occupancy of the public property, which said compensation may be a fixed fee, or may be measured by gross receipts, or some other method mutually agreeable to the parties. Such compensation may be changed from time to time by mutual consent.

(2)

For the length of time that such franchise shall continue in effect; provided, however, that no franchise shall be granted for a period longer than twenty-five years.

(3)

That no franchise shall be assigned without the written consent of the council, which consent shall be evidenced by a resolution or an ordinance.

(4)

That the procedure to be followed in ordering the making of extensions, betterments or permanent improvements of the service by the city or considering applications by the grantee for permission to make extensions, enlargement or betterments, be prescribed.

(5)

That no rate of return shall exceed a fair return upon the fair value of the property used in rendering the public service.

(6)

Each franchise shall provide for a method of accounting applicable to the particular business conducted by the grantee.

(7)

Adequate provision shall be made in each franchise for the maintenance of sufficient depreciation reserves so that the integrity of the property used and useful in rendering the public service may be maintained. Each franchise shall specify the purposes for which the depreciation reserves may be used. In determining the amount and character of reserves required it shall be proper to resort to current common practices applicable to the particular utility concerned.

(8)

Each franchise shall provide for a recapture provision whereby the city shall have the right to cancel the franchise and purchase the property of the franchise holder at a price to be determined according to the formula or method agreed upon in the franchise when granted.

(9)

That the grantee may be required, at grantee's expense, to conform its installations in the streets, alleys, and public ways to any changes of grade made by the city.

Sec. 135. - Investigations and public hearings.

The council shall have full power to examine or cause to be examined at any time, and at all times the books, papers and records of franchise holders; to take testimony and compel the attendance of witnesses and the production of books, papers, and records and to examine witnesses under oath and under such rules and regulations as it may adopt and should any franchise holder refuse to permit the inspection of such books, papers or records by the council or by any one designated by it to make such inspection or fail to produce the same when notified to do so by the council, or should any officer, agent or employee of such franchise holder refuse to give testimony before the council, the council shall have the power by ordinance, to declare the franchise or privilege enjoyed by such person, firm or corporation in default, and terminated.

The council shall have the power to call a public hearing, giving reasonable notice to the holder of a franchise, to determine whether or not an application to increase rates shall be granted or to determine whether or not the rates currently charged by any holder of a franchise for the service rendered are excessive. In that connection the council shall have full power to examine the books, papers and records of the franchise holder, and to compel the attendance of all witnesses deemed necessary for the ascertainment of the facts in connection with said inquiry. Failure to obey any subpoena to appear as a witness shall be punishable by the council for contempt by any appropriate proceedings permitted by law.

Sec. 136. - Supervisor of public utilities.

There is hereby created the office of supervisor of public utilities, who shall be nominated by the city manager and confirmed by the council. He shall serve at the pleasure of the city manager and shall receive such compensation as may be fixed by the council. The supervisor of public utilities shall have such assistants as may be determined by the council in cooperation with the city manager.

The supervisor shall assemble the facts which are essential to proper determination of cost of service and the fixing of reasonable rates. He shall have and keep up to date an inventory of the property used in public service, the cost of such properties as actually and reasonably incurred or as fixed by appraisal, additions and retirements made each year, the depreciation and all matters that enter into the periodical readjustment of the rate base. He and his assistants under his direction shall have power to make and shall conduct all inspections and examinations of public utility properties, accounts and records. At the close of each calendar or fiscal year, he shall make a comprehensive report and recommendations to the council, which, after receiving them, may proceed with informal negotiations or with formal proceedings. Every public utility operating within the city shall furnish the supervisor regular reports as to capital outlay, property retirements, operating revenues, operating expenses, taxes and other accounting matters according to the standard accounting classifications for each utility. In addition the city may require reports regarding salaries, wages, employees, contracts, service performance and all other records of operation that pertain to proper rate adjustments on the basis of facts and regular administration.

In connection with any application for an increase in rates, fares or charges by a holder of a franchise, or an inquiry initiated by the council as to the reasonableness of the rates charged by any franchise holder, the council may refer the matter to the supervisor for the purpose of affording to the holder a hearing thereon. The supervisor may give such a rate hearing to any such person, firm or corporation provided for hereunder and report his findings and recommendations to the council for their adoption, revision or rejection.

The supervisor, while sitting for the purpose of giving such hearing shall have all the powers herein conferred on the council to inspect books and compel attendance of witnesses and may prescribe the penalties provided herein for failure or refusal to attend and testify or produce such books.

The council may certify any such hearing to the supervisor whenever it deems it advantageous to have the supervisor sit and give such hearing instead of the council; provided, however, that the evidence at any hearing so held and the findings of the supervisor shall be fully reported to the council for its approval, amendment, revision or rejection.

The supervisor shall perform such other duties and services affecting public utilities as are assigned to him or directed by the city manager or council.

Sec. 137. - Miscellaneous provisions.

The council shall have the right by resolution to grant a temporary use of a street, alley, public way or public property for a period not to exceed two years and by ordinance, in the nature of a franchise, for a period not to exceed twenty-five years, and charge therefor such compensation annually as may be proper. The grants contemplated by this section do not include utility franchises as that term is generally understood. In this connection the council shall have the right to grant to the owner of property abutting upon the streets, or other property of the city, the use thereof or to go under or over the same in any manner which may be necessary or proper to the better enjoyment of said abutting property by the owner; provided, however, that such use be not inconsistent with, or does not unreasonably impair the public use to which said street or other property may be dedicated.

The council shall fix the terms and conditions of any such grant and the time for which the same shall exist. The right is expressly reserved to the city, acting through the council to terminate such grant when deemed inconsistent with the public use of the property of the city, or when the same may become a nuisance.