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Carlos Alvarez, Esq. December 11, 2014 Page 4 w... In contrast to the City's lack of extra-territorial power to serve within the Town,the Town has been given broad powers to: "furnish any and all local public services, including electricity" to its inhabitants; contract "on behalf of the inhabitants of the Town" with other utilities for the provision of electricity; "purchase, construct, maintain, operate, lease or contract for any public utilities, including but not limited to, electric light systems and plants ... and distribution systems therefore"; and to grant public utility franchises of all kinds. Ch. 29163, §2(e) and (f), Laws of Fla. (1953) (Exhibit Q. The Franchise Agreement Pursuant to these broad statutory powers, the Town entered into the Franchise Agreement with the City in 1986. That Franchise Agreement will expire on November 6,2016. The Franchise Agreement has four fundamental features. First, it is based on the Town's statutory right and responsibility to see that its inhabitants are furnished with reliable and reasonably priced electric service. Second,it called for the Town to temporarily relinquish its right to furnish electric service to its inhabitants residing south of Old Winter Beach Road for a period of thirty years. Franchise Agreement, § 8. Third, it temporarily granted the City the exclusive franchise and permission to provide extra-territorial electric service within parts of the Town lying south of Old Winter Beach Road for a period of thirty years. Franchise Agreement, § 1. Fourth, it granted the City temporary permission to place its electric facilities in the Town's rights-of-way and other public areas for a period of thirty years. Id. The Franchise Agreement has no automatic or mandatory renewal provisions. """ By certified letter dated July 18, 2014, the Town formally advised the City in writing that it will not renew the City's Franchise, and that upon expiration of the Franchise Agreement the City will no longer have the Town's permission to furnish electricity to the Town's residents. The City's power to provide extra-territorial electric utility service within the Town is derived only by contract with the Town in the form of the Franchise Agreement, and the City has no legal power to provide such extra-territorial in the absence of a contractual agreement with the Town. The City has indicated that it intends to continue to provide extra-territorial electric service within the Town on a monopoly basis when the City's Franchise expires notwithstanding the complete absence of any statutory power for the City to provide such extra-territorial service. The City has also indicated that it will seek to prevent the Town from exercising its statutory rights to furnish its inhabitants with electric service. The City's attempts to exert extra-territorial monopoly powers and extract monopoly profits within the Town without the Town's consent are extremely rare in the municipal utility field. However, such attempts are not unprecedented and where they have occurred courts have been quick to reject them. For example, in City of Indian Harbour Beach v. City of Melbourne, 265 So. 2d 422 (Fla. 4th DCA 1972), the Fourth DCA was asked to resolve a similar inter-municipality dispute involving Melbourne's provision of extra-territorial utility service to the residents of Indian Harbour Beach at rates which Indian Harbour Beach asserted were unreasonable. The court resolved the dispute over Melbourne's extra-territorial powers by first finding that the two municipalities were "theoretically equally independent." The court then ruled that,unless there was a franchise agreement that gave Melbourne the right to serve within Indian Harbour Beach or unless the cities mutually agreed to resolve their dispute, Melbourne would have to exit the area and Indian Harbour Beach had the right to obtain d�