HomeMy WebLinkAboutVI (D) Franchise Agreement with Lake Apopka Natural Gas Agenda 11-21-2000
Item VI D
FOLEY & LARDNER
MEMORANDUM
CLIENT-MATTER NUMBER
020377-0223
TO: The Honorable Mayor and City Commissioners of the City of Ocoee
FROM: Scott A. Cookson, Esq., Assistant City Attorney
DATE: November 15, 2000
RE: Natural Gas Distribution Franchise Agreement
Attached please find the Natural Gas Distribution Franchise Agreement (the
"Agreement") with Lake Apopka Natural Gas District ("LANGD"). This Agreement is
essentially the same as the previous non-exclusive gas distribution franchise agreements the
City has had with the Lake Apopka Natural Gas District.
The following are the basic terms of the Agreement:
1. City grants to the LANGD the non-exclusive right to
manufacture, import, transport, distribute, and sell manufactured or
natural gas within the boundaries of the City.
2. In exchange for the granting of the franchise, the City
receives a franchise fee in the amount of six (6) percent of the gross
revenues derived from sales within the City. If at any time during the
term of the Agreement LANGD enters into a similar franchise agreement
with another governmental entity which has a higher franchise fee paid
by LANGD, the Agreement can be amended so that the City can receive
the more favorable franchise fee.
3. The term of this Agreement is ten (10) years with the
effective date dating hack to the termination of the prior franchise
agreement, September 4, 2000.
The LANGD Board meeting to ratify this Agreement is scheduled for November
27, 2000, subsequent to the date of the November 21, 2000 City Commission meeting. Once
this Agreement is approved and executed by the City, it will go before the LANGD Board for
ratification and execution by LANGD.
006200348.2 ��/
NATURAL GAS DISTRIBUTION FRANCHISE AGREEMENT
THIS NATURAL GAS DISTRIBUTION FRANCHISE AGREEMENT (hereinafter
the "Franchise Agreement") is made and entered into this 4th day of September, 2000, by and
between the City of Ocoee, a Florida municipal corporation, (hereinafter referred to as"City"),
and the LAKE APOPKA NATURAL GAS DISTRICT, an independent special district
organized and existing under the laws of the State of Florida, (hereinafter referred to as the
"Franchisee"), for the purposes of granting a non-exclusive franchise for the right, privilege or
franchise to manufacture, import, transport, distribute and sell manufactured or natural gas within
the City, or the portion thereof hereinafter described, all subject to the terms and conditions set
forth herein.
Section 1: Grant of Non-Exclusive Franchise.
In consideration of the agreement of the Franchisee to (i) pay to the City the franchise fee
set forth in Section 8 hereof, and (ii) otherwise comply with the terms and conditions of this
Franchise Agreement, the City does hereby grant to Franchisee, for a period of ten (10) years
from the date of this Franchise Agreement, the non-exclusive right, privilege and franchise to
manufacture, import, transport, distribute, and sell manufactured or natural gas (hereinafter
referred to generally as"Gas") within the boundaries of the City as the same now exist or may
hereafter be extended or contracted (hereinafter referred to as"Franchise Area") and for that
purpose to establish the necessary facilities and equipment and to maintain a manufacturing plant,
gas mains, service pipes, and other appurtenances necessary to the manufacture, sale,
transportation, and distribution of Gas in, under, upon, across, and along the present and future
streets, alleys, avenues, bridges, easements, or other public places or ways of the City within the
Franchise Area, and to do all things which are reasonable, necessary, or customary in the
accomplishment of this objective; subject, however, to the further provisions of this Franchise
Agreement. Notwithstanding the foregoing, before Franchisee shall establish any plant in the City
for the manufacture of gas, the Franchisee shall first obtain the approval of the City as to the
location thereof and shall comply with all applicable statutes, laws, ordinances, rules, and
regulations. No such plant shall be constructed or operated in violation of the zoning and building
ordinances of the City.
Section 2: Obstructing Streets.
The Franchisee shall exercise its privileges herein subject at all times to the police power
of the City and shall not unnecessarily or unreasonably obstruct the use of, or injure, any street,
avenue, alley, or other public place in any way, and shall, upon completion of any construction or
repair, restore all streets, avenues, alleys, or other public places or ways of the City which shall be
opened by it or its agents or employees for the purpose of laying, placing, or repairing its gas
mains or service pipes to as nearly the same order and condition as they were before the
excavation was made as is reasonably possible and to preserve them in this condition for twelve
months. Any obstruction of any street, avenue, alley, or other public place or way or any failure
to properly fill and maintain a street, avenue, alley, or other public place after excavation, after
proper notice of ten days from the City to Franchisee demanding removal or repair, may be taken
care of by the City and the costs thereof, plus ten percent for administering and engineering
expense, shall be charged against the Franchisee. Except in cases of emergency, Franchisee shall
give the City three days notice prior to conducting any excavation or work within any public right
of way.
Section 3: Plats.
Prior to the laying or relaying of any gas mains pursuant to this Franchise Agreement, the
Franchisee shall present to the City a complete plat showing the location and size of all proposed
mains. The construction, location, or relocation of all facilities or any other construction or
installation made and effected by the Franchisee by virtue of this Franchise Agreement shall be
made under the supervision of, and with the approval of, such representatives as the City may
designate for such purpose, but not so as to unreasonably interfere with the proper operation of
the Franchisee's facilities and service.
Section 4: Indemnification.
Franchisee shall indemnify, defend, and hold completely harmless the City and its elected
representatives, officers, employees, and agents from and against any and all liabilities, losses,
suits, claims, demands,judgments, fines, damages, costs, and expenses (including, but not limited
to, all costs for investigation and defense thereof, court costs, expert fees, reasonable attorney
fees and paralegal fees, and reasonable attorney fees and paralegal fees on appeal) which may be
incurred by, charged to, or recovered from any of the foregoing:
(i) by reason or on account of damage to or destruction of any property of the City, or any
property of, injury to, or death of any person resulting from or arising out of the performance
under this Franchise Agreement, or the acts or omissions of Franchisee's officers, agents,
employees, subcontractors, licensees, or invitees regardless of where the damage, destruction,
injury, or death occurred unless such liability, loss, suit, claim, demand,judgment, fine, damage,
cost, or expense was proximately caused solely by the City's negligence or by the joint negligence
of the City and any person other than the Franchisee or Franchisee's officers, agents, employees,
subcontractors, licensees, invitees, or
(ii) arising out of the failure of Franchisee to keep, observe, or perform any of the
covenants or agreements herein to be kept, observed, or performed by Franchisee, or
(iii) by reason or on account of death, injury, or damage to persons or property arising out
of the construction, maintenance, repair, or operation of Franchisee's property or due to the
negligence of the Franchisee or its agents or employees in operating its property.
City agrees to give Franchisee reasonable notice of any suit or claim for which indemnification
will be sought hereunder, to allow Franchisee or its insurer to compromise and defend the same to
the extent of its interests and to reasonably cooperate with the defense of any such suit or claim.
The provisions of this Section shall survive the expiration or earlier termination of the term of this
Franchise Agreement with respect to any acts or omissions occurring during the term of the
Franchise Agreement.
Section 5: Insurance.
(A) Franchisee shall, without expense to the City, obtain and maintain throuehout the
term of this Franchise Agreement.
(i) Comprehensive automobile insurance covering any motor vehicle operated by or on
behalf of the Franchisee including owned autos, non-owned autos and hired autos; and
(ii) Comprehensive general liability insurance (including but not limited to contractual,
independent contractors, broad form property damage, and personal injury, as applicable, and
such other coverage as may from time to time be generally issued by insurance companies for
businesses similar to that engaged in by the Franchisee in the performance of this Franchise
Agreement which the City may reasonably require) protecting Franchisee, the City, and the City's
elected representatives, members of the Commission, officers, agents, and employees from and
against any and all liabilities arising out of or relating to Franchisee's performance of this
Franchise Agreement whether such operations be by itself or by any subcontractor or by anyone
directly or indirectly employed by any of them or by anyone for whose acts any of them may be
liable; and
(iii) Workers compensation or similar insurance affording the required statutory coverage
and limits.
(B) Such policies shall be in such form and with such company or companies as the City
shall approve and (except for the coverage limits of Workmen's Compensation insurance) shall be
in an amount no less than ONE MILLION AND NO/100 DOLLARS, combined single limit, or
its equivalent, or such greater amount of such insurance as shall be maintained by Franchisee, with
no deductible, with cross liability endorsement and with contractual liability coverage for
Franchisee's covenants to and indemnification of the City. Franchisee's insurance shall provide
that it is primary insurance as respects any other valid and collectible insurance City may possess,
including any self-insured retention or deductible City may have, and that any other insurance City
does possess shall be considered excess insurance only. Franchisee's insurance shall also provide
that it shall act for each insured and each additional insured as though a separate policy has been
written for each; provided, however, that this provision shall not operate to increase the policy
limits.
(C)Franchisee shall provide, prior to the effective date of this Franchise Agreement, and
at least thirty days prior to the expiration of an insurance policy or policies theretofore provided
to the City by Franchisee hereunder, a certificate of insurance evidencing all coverage required
under this Section. Such certificate(s) shall name the City and its elected representatives, officers,
employees, and agents as additional insureds and shall provide that the policy or policies may not
be canceled or modified nor the limits thereunder decreased without thirty days' prior written
notice thereof to the City. Franchisee agrees that the City shall have the right, exercisable on
ninety days' prior written notice to Franchisee, to require Franchisee, from time to time,
reasonably to alter the monetary limits or coverage provided by such policy or policies.
Section 6: Standards of Service.
(A) The Franchisee shall at all times furnish a safe and reliable supply of Gas to its
customers within the City; subject, however, to the further provisions of this section. The
Franchisee will sell and distribute Gas through its distribution system which is located in Orange
and Lake Counties and in a number of cities and towns located therein and in the territory
adjacent to and near said cities and towns. The Gas distributed by the Franchisee will be
transported to Franchisee by the pipeline system owned and operated by Florida Gas Transmission
Company, (or by some other company which holds a certificate of public convenience and
necessity from the Federal Energy Regulatory Commission to transport Gas in the State of
Florida). That company is a "Natural Gas Company" under the Federal Natural Gas Act, which
subjects said Florida Gas Transmission Company (or its successors or assigns) to the jurisdiction
of the Federal Energy Regulatory Commission.
(B). Any expansion of the system subject to this Franchise will be determined by the
Franchisee in accordance with the terms and conditions of its Tariff pertaining to system
expansion. The Franchisee, by entering into this Franchise Agreement, makes no representation
or assurance, and assumes no obligation beyond the terms of its Tariff, that it will expand the
distribution system beyond what currently exist.
(C) The Franchisee shall not he liable to the City or its inhabitants by reason of the failure
of the Franchisee to deliver Gas as a result of force majeure, or failure, inability or refusal of the
pipeline supplier to transport an adequate supply, or an order or decision of a public regulatory
body, or other acts beyond the control of the Franchisee. The Franchisee shall have the right and
authority, and it shall be its duty, to adopt reasonable rules and regulations in connection with the
limiting, curtailing or allocating service or supplying Gas to any customer or prospective
customer, and withholding the supply of Gas to new customers, whenever any of the occurrences
named in the foregoing sentence take place; provided, however, that such rules and regulations
shall be uniform as applied to each class of customers, and shall be non-discriminatory as between
communities receiving natural gas service from the Franchisee.
(D) Subject to the limitations contained in the foregoing subparagraphs A, B, and C, the
Franchisee shall make gas sales service available to customers within the Franchise Area pursuant
to a Tariff which shall be uniform as to each class of service customer, provided, however, the
Tariff shall be determined by the Board of Directors of the Franchisee and may classify its Gas
services in any manner allowed by law.
(E) The rates charged by the Franchisee for its Gas and Gas services furnished within the
City shall be in accordance with the Tariff determined by the Board of Commissioners of the
Franchisee which shall be uniform as applied to each class of customers, and shall be non-
discriminatory as between communities receiving natural gas service from the Franchisee.
(F) The quality of the Gas sold in the City shall be the same as that sold to the
Franchisee's other customers in its service area in the counties in which the Franchisee operates.
(G) If service is suspended because of any of the reasons set forth above, occurring
through no fault or negligent act on the part of the Franchisee, such suspension shall not be made
the basis of any action or proceeding to terminate this Franchise.
Section 7: Accounting Reports.
(A) Franchisee agrees to file with the City Clerk, on or before April] of each year, a copy
of its annual audit report for the preceding fiscal year of the Franchisee, together with an income
statement for the City, on an allocated basis.
(B) The City or any certified public accountant selected by the City, shall have the right at
all reasonable hours to examine the Franchisee's books and records for the purpose of verifying
the statement of revenues furnished by the Franchisee to the City. In the event City elects to have
said books and records reviewed by an accountant, the City shall bear the cost of the services of
such accountant, unless the audit discloses that the accountings rendered by the Franchisee
reported less than ninety percent of the moneys due to the City, in which case the audit costs shall
be paid by the Franchisee. The Franchisee's books and records shall be kept in accordance with
good business procedures and generally-accepted accounting principles and shall be in such form
that they shall contain all information reasonably necessary to the City.
(C) The City shall promptly famish Franchisee accurate information regarding any
expansion, contraction or other modification of the corporate boundaries of the City and
Franchisee shall be entitled to rely on information so furnished in order to identify customers and
accounts within the corporate limits of the City.
Section 8. Payments to the City.
The Franchisee agrees that subsequent to the commencement date of this Franchise
Agreement, it will, in consideration of the granting of this franchise, pay to the City, at least
quarterly, out of revenues derived from the sale of Gas to customers of its gas system or systems,
such sums of money as shall be allocated to the City by virtue of the computation made pursuant
to the following formula (sometimes referred to as "the Franchise Fee"):
(A) All rates, fees, rentals, or other charges or income derived by the Franchisee from the
operation of its gas system or systems shall first be used by the Franchisee to pay all costs of
operation and maintenance of such gas system or systems, to pay the principal of and interest on
any revenue bond or other obligation issued by the Franchisee to finance the cost of construction,
extension, expansion, improvement, or acquisition of gas systems, to establish appropriate
reserves for any such revenue bonds, to establish an extension, removal, and replacement fund for
such gas system or systems, and to make all other proceedings authorizing any such revenue
bonds. The payments to the City by the Franchisee as set forth in Section 8(B) of this Franchisee
Agreement are hereby construed to be a part of the operation cost and maintenance of the gas
system or systems, and shall be paid to the City as an expense falling in that category and liable
for payment by the Franchisee as such.
(B) The Franchisee shall pay to the City a sum representing six percent of the gross
revenues derived from the sale of Gas to all customers within the corporate limits of the City
during the year in which such payment is due, after deduction therefrom the gross revenues
derived from sale of Gas to interruptible gas customers and from furnishing transportation
services to customers within the corporate limits of said City. The phrase "Gross Revenues" shall
be deemed to include a flat-rate customer charge or a minimum bill charge, if any, made by the
Franchisee regardless of the amount of Gas consumed.
(C) If at any time during the term of this Franchise Agreement, the Franchisee and
another governmental authority shall enter into a similar franchise which provides for a more
favorable franchise fee to be paid by the Franchisee than that provided for in this Franchise, the
Franchisee shall so notify the City in writing immediately thereafter and shall extend a similar fee
agreement to the City and, at the City's option, this Franchise will be deemed amended to
incorporate such more favorable franchise fee.
Section 9: Preliminary Engineering Plans.
Upon request of the City, the Franchisee shall review the preliminary engineering plans for
all commercial developments within the City and provide the City in a timely manner with written
comments concerning the providing of gas to such development.
Section 10: Approval of Transfer.
No sale, assignment, or lease of this Franchise Agreement or franchise shall be effective
until it is approved by the City, and until the vendee, assignee, or lessee, has filed in the office of
the City Clerk an instrument duly executed reciting the facts of such a sale, assignment, or lease,
accepting the terms of the Franchise, and agreeing to perform all of the conditions thereof The
City may require that any proposed assignee submit similar documentation to that provided by the
Franchisee at the time of award of the Franchise.
Section 11: Default and Termination.
(A) In the event that:
(i) the Franchisee shall fail to keep, perform, and observe each and every promise,
covenant, and agreement set forth in this Franchise Agreement, and such failure shall continue for
a period of more than sixty days after delivery to the Franchisee of a written notice of such breach
or default; or
(ii) the Franchisee shall become insolvent, or shall take the benefit of any present or future
insolvency statute, or shall make a general assignment for the benefit of creditors, or file a
voluntary petition in bankruptcy or a petition or answer seeking an arrangement for its
reorganization, or the readjustment of its indebtedness under the Federal Bankruptcy laws, or
under any other law or statute of the United States or any State thereof, or shall consent to the
appointment of a receiver or trustee or liquidation of all or substantially all of its property; or
(iii) the Franchisee shall have a petition under any part of the Federal Bankruptcy laws, or
an action under any present or future insolvency laws or statute, filed against it, which petition is
not dismissed within thirty days after the filing thereof
then in any of such events, the City, in its discretion, shall have the right to:
(i) seek specific performance of this Franchise Agreement,
(ii) terminate this Franchise Agreement for default, which termination shall be effective
twenty-four hours after written notice of such termination is given to the Franchisee, or
(iii) pursue such other actions and remedies as may be permitted by law. In the event the
City elects to terminate this Franchise Agreement, then the City may, at its option, delay the
effective date of termination for default until the first day of the month following the date on
which written notice of such termination is given to the Franchisee. The City shall specify the
termination date on the written notice of termination.
(B) In the event that a dispute arises between the City and the Franchisee, or any
interested party, in any way relating to this Franchise Agreement, the Franchisee shall continue to
render service in full compliance with all terms and conditions of this Franchise Agreement
regardless of the nature of the dispute.
Section 12: Pledge of Revenues Authorized.
The Franchisee shall have the right and power, and is hereby authorized to, hypothecate or
pledge the rates, fees, rentals, or other charges or income derived by it from users of the services
and facilities of its gas system or systems operated by the Franchisee wholly or partially within the
City, pursuant to this Franchise Agreement, to the payment of the principal of and interest on any
revenue bonds or other obligations hereafter issued by the Franchisee to finance the costs of
construction, acquisition, or extension of its gas system or systems within the Counties of Orange
and Lake, known as the Lake Apopka Natural Gas District, and appropriate reserves therefor. It
is the express intention hereof that this Franchise is made for the benefit of the City, the
Franchisee, and the holders of any such revenue bonds or other obligations of the Franchisee, and
shall be binding upon and inure to the benefit of, and be enforceable by, the holders of any such
revenue bonds or other obligations of the Franchisee, the City and the Franchisee, and the
successors and assigns of the City and Franchisee, and except for the holders of any such revenue
bonds or other obligations of the Franchisee, the City and Franchisee, and their successors and
assigns, is not intended to and shall not confer any rights upon any other person, firm, or
corporation, public or private.
Section 13: Change of Government.
Any change in the form of government of the City as authorized by the State of Florida
shall not affect the validity of this franchise. Any municipal corporation succeeding the City shall,
without the consent of the Franchisee, succeed to all the rights and obligation of the City provided
in this Franchise Agreement.
Section 14: Attorneys' Fees.
In the event that either party finds it necessary to commence an action against the other
party to enforce any provision of this Franchise Agreement, or because of a breach by the other
party of any of the terms hereof, each party shall bear its own attorney's fees, paralegal fees and
costs in connection therewith.
Section 15: Notices.
All notices and approvals which any party shall be requested or shall desire to make or
give under this Franchise Agreement shall be in writing, and shall be made or given (i) by certified
mail, postage prepaid, return receipt requested, (ii) by hand delivery to named individuals
representing the party to be notified, or (iii) by private parcel (next day) delivery service. Notices,
including notice of a change of address or phone number, shall be addressed or transmitted to the
addressees as set forth below, or that address which party may otherwise designate in the manner
prescribed herein:
As to the City:
City of Ocoee
150 N. Lakeshore Drive
Ocoee, Florida 34761-2258
Allen. City Manager
As to Franchisee:
Lake Apopka Natural Gas District
1320 S. Winter Garden-Vineland Road (CR535)
P.O. Box 783007
Winter Garden, FL 34778-3007
Atten: General Manager
Notices and approvals given or made as aforesaid shall be deemed to have been given and
received on the date of actual receipt.
Section 16: Miscellaneous.
(A) Time is of the essence with respect to all matters set forth in this Franchise
Agreement.
(B) The Franchisee is not, and shall not for any purpose be, the agent of the City, and
shall have no power or authority to bind the City in any manner whatsoever.
(C) This Franchise Agreement embodies and constitutes the entire understandings of the
parties with respect to the matters contemplated herein, and all prior or contemporaneous
agreements, understandings, or representations and statements, oral or written, are merged into
this Franchise Agreement. Neither this Franchise Agreement nor any provisions hereof may be
waived, modified, amended, discharged, or terminated, except by an instrument in writing signed
by the party against whom the enforcement of such waiver, modification, amendment, discharge,
or termination is sought, and then only to the extent set forth in such instrument.
(D) It is stipulated and agreed between the parties that this Franchise Agreement shall be
interpreted and construed in accordance with the laws of the State of Florida, and any trial or
other proceeding with respect to this Franchise Agreement shall take place in the State of Florida.
(E) Captions of the sections and subsections of this Franchise Agreement are for
convenience and reference only, and the words contained therein shall in no way be held to
explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of
this Franchise Agreement.
(F) The Franchisee agrees to promptly reimburse the City for all of its costs and expenses,
including attorney's fees and advertising costs, incurred in connection with the negotiation,
preparation and award of this Franchise.
(G) The City is entering into this Franchise Agreement pursuant to the authority vested in
the City Commission by Article VIII of the Constitution of the State of Florida, Chapter 166 of
the Florida Statutes, and its Charter.
(H) The City hereby represents that this Franchise Agreement has been approved in
accordance with all legal requirements.
Section 17: Severability.
If any part, section, subsection, or other portion of this Franchise Agreement, except for
the provisions of Section 8 hereof is declared void, unconstitutional, or invalid for any reason,
such part, section, subsection, or other portion, or the prescribed application thereof, shall be
severable, and the remaining provisions of this Franchise Agreement, in all applications thereof
not having been declared void, unconstitutional, or invalid shall remain in full force and effect.
The City and Franchisee declare that no invalid or prescribed provision or application was an
inducement at the execution of this Franchise Agreement, and that they would have executed this
Franchise Agreement, regardless of the invalid or prescribed provision or application. In the
event any part, subsection, or other portion of Section 8 hereof is declared void, unconstitutional,
or invalid for any reason, then either party may terminate this Franchise Agreement upon notice to
the other party.
IN WITNESS WHEREOF, the CITY OF OCOEE and the LAKE APOPKA
NATURAL GAS DISTRICT have caused this Franchise Agreement to be executed as of the
day and year first above written.
Signed, sealed, and delivered CITY OF OCOEE,
in the presence of a Florida municipal corporation
By:
Mayor, City of Ocoee
As to City ATTEST:
By:
City Clerk
(Seal)
LAKE APOPKA NATURAL GAS DISTRICT
By:
John N Sargent, President
As to Franchisee
Attest:
Alonzo Williams, Secretary
Seal
Copy of Public Hearing Advertisement
Date Published
K14 Orlando Sentinel SUNDAY, October 22,2000 OBI
Advertisement
1 NOBICESEAPING
NOTICE OF PUBLIC HEARING AND
NOTICE OF INTENT TO AWARD
NON-EXCLUSIVE FRANCHISE
BY THE OCOEE CnT COMMISSION
NOTICE IB HEREBY GIVEN.pursuant
to Section L.B.N.of Article II of the
Charter of City Commission
Gry eI Ocoee lhet the
PPUBLIC°HEARINGnon Tuesday.
No-
vember 21.2000 et]30 p.m.at ,or as
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City of Ocoee
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NOVEMBER 5,12,2000